The Permanent Expatriate: A Comeback?

In Hong Kong, where I lived for nearly seven years before settling in Malaysia, I met representatives from the previous era, when communication methods were far removed from today's.

I was told that at an institution like the Hong Kong & Shanghai Bank (since renamed HSBC), a client of mine at the time, that each executive’s allowance consisted of three lines of a collective telex per week in which they were expected to summarise their concerns to share with the London headquarters. The rest of the communication took place by mail ie at the time by boat. It took several weeks to receive a response, time for reflection, and it took several weeks for the headquarters to be informed of the outcome.

The reality has changed, but some lessons from this way of working remain.

The cornerstone of the system, notwithstanding technology, is Trust.

Trust in the judgment of the person on the ground, trust in his or her honesty. In the new global economic order, the free movement of people seems irremediably compromised. Not in the sense of freedom of establishment and work in another country as understood within the European Union. It is temporary, short-term, "fleeting" trips that are compromised.

"Spot" business travel remains possible to meet imperative or unforeseen demands.

Senior sales or general management executives continue to travel for crucial negotiations where face-to-face meetings are necessary to conclude. High-level technical experts with unique skills continue to be sent to local sites.

But everything else will, in a sense, "fall back" to the ground.

Travel on fixed dates is becoming rarer, while statutory meetings such as Board meetings are increasingly held virtually.

However, directors' liability is not virtual, and does not distinguish between resident and non-resident directors, nor between in-person and virtual meetings.

The company's legal behaviour must be adapted. The challenge is to adapt command structures to this new fragmentation.

Paradoxically, and before any analysis of the legal consequences, which will not be addressed here, this fundamental change could lead to the revival of the permanent expatriate, as it existed before the temporary expatriate on two- or three-year rotations.

This concept must be detached from its historical context to describe a reality as it existed as a technique for managing a company's interests in a distant land with limited or even nonexistent means of communication.

The method could apply to a Japanese executive in South America as well as a French executive in ASEAN; that is not the point. Or, of course, a French or other European man or woman in Indo-Pacific , it does not matter. We are talking here about a model that has disappeared, but whose logic is once again becoming relevant enough to be examined.

In the most "authentic" version of the British system in Asia, the expatriate is a young man of good, or at least decent, social background who comes to settle with his family for an indefinite number of years. This may be in finance, as in Hong Kong, but it may also be on a plantation in Malaysia, several dozen kilometres from the nearest neighbour.

This expatriate is not expected to be intelligent—it may even be seen as a handicap (pragmatism is better), but rather to be reliable, strong-willed, and honest.

If one is willing to consider, and more enlightened minds than mine suggest, that the invisible borders linked to the constraints on the movement of people have recreated a world of "blockades" like in the 17th and 19th centuries, then an old model may deserve consideration.

This reflection includes a more legal variation in terms of remote governance, the permanent expatriate being able to play a pillar role, to be addressed in one of our next Newsletters.