LONDON, July 25 (Reuters Breakingviews) – BP’s (BP.L) (BP.N) chief executive looks set to pay the appropriate price for mishandling the Gulf of Mexico disaster. But Tony Hayward’s impending departure should not be seen as providing redemption for the rest of the UK oil major’s board, let alone for its chairman, Carl-Henric Svanberg.
Whether through tiredness, bad luck or poor media experience, Hayward said the wrong thing on too many occasions after BP’s well blew out on April 20. One such slip, saying he “wanted his life back” just weeks after the fatal accident, has now become prophetic. Hayward became a global hate figure. It has for weeks been evident that his continuing presence at the helm of BP would obstruct the group’s rehabilitation in the United States, potentially saddling the shares with a discount. While going would be the right thing, it would have been better to say weeks ago that he would step down once the well was capped and when a successor could be found.
Some will see Hayward’s anticipated exit as evidence that Svanberg is belatedly showing strong leadership. But it is questionable whether the chairman’s own weakened authority can be restored. He should have publicly helped Hayward fight the fallout from the disaster sooner than he did. Worse, Svanberg allowed the board to dither over the dividend even when it was clear that continuing with the payout was both politically foolish and financially irresponsible. Ideally, Svanberg would have been the first to leave, with his successor finding a new CEO.
Hayward’s short tenure at the top — he has lasted less than four years — carries lessons for all bosses. The ability to handle a hostile media in a crisis is clearly as vital a skill in a boss as management or technical capability. A constructive relationship with a supportive and weighty chairman is also critical. And the episode has shown that new brooms cannot help but inherit some of the baggage of previous management. Hayward was vulnerable largely because of BP’s safety failings under his predecessor John Browne — even though he was appointed on a manifesto to fix them. It may now be for Bob Dudley, the U.S. BP executive tipped to succeed Hayward, to grapple with these challenges.
– BP has decided chief executive Tony Hayward should step down over his handling of the Gulf of Mexico oil spill and his departure could be announced in the coming days, Reuters reported on July 25. [ID:nN25157641]
– For previous columns by the author, Reuters customers can click on [HUGHES/]
(Editing by Hugo Dixon and David Evans)