Sky News has learnt that Paul Walsh, the former chief executive of Diageo (LSE: DGE.L - news) , has decided not to seek re-election at the bank's annual general meeting next week despite encouragement from boardroom colleagues to remain in place.
City sources said that proxy voting agencies including ISS (LSE: 0QRS.L - news) and Glass Lewis had circulated reports recommending that shareholders oppose Mr Walsh's re-election because of the scale of his business commitments.
He is chairman of Compass Group (Other OTC: CMPGF - news) , the FTSE 100 contract caterer, and the AIM-listed satellite group Avanti Communications (LSE: AVN.L - news) , as well as serving on the boards of London-listed RM2 and New York-listed FedEx (Swiss: FDX-USD.SW - news) .
The agencies' reports are understood not to make any judgements about Mr Walsh's competence, and may spark a renewed debate about the quality of voting advisers' judgements.
A person close to HSBC said there was no doubt that Mr Walsh would have easily secured sufficient backing to retain his seat on the board, but that he had decided to step down to save the bank from any embarrassment resulting from a substantial vote against him.
HSBC is expected to confirm Mr Walsh's decision in a stock exchange statement which could come as soon as Friday afternoon.
The issue of 'over-boarding', where an individual is deemed to have too many directorships to fulfil their duties properly, is understood to be becoming a greater concern for proxy advisers.
ISS is also recommending that investors oppose the re-election of Irene Lee, another HSBC non-executive whose other roles include directorships of companies such as Cathay Pacific Airways.
One independent shareholder described the recommendation regarding Mr Walsh as "a scandal".
"Are they really suggesting that someone of the calibre of Paul Walsh doesn't have the capacity to make a judgement about whether he has sufficient time to devote to his duties," said the investor, who did not want to be named.
Mr Walsh only joined the board of HSBC at the beginning of last year, and played a role in two key decisions made by Europe's biggest lender, since then: the retention of its headquarters in London following a lengthy review; and the choice of former Prudential (SES: K6S.SI - news) chief executive Mark Tucker as the bank's next chairman.
Since stepping down from Diageo in 2013, he has joined a number of boards, and was close to taking both the chairmanship of Formula One motor racing and the presidency of the CBI, the employers' group.
HSBC has seen a strong recovery in its share price over the last year, with its market value up by almost one-third to £125bn during that period.
Mr Tucker's most pressing task when he takes on the chairmanship from Douglas Flint will be to identify a successor to Stuart Gulliver, who has said that he will step down as HSBC's chief executive next year.
HSBC declined to comment on Mr Walsh's decision not to seek re-election next week.