BP has launched a search for a new chairman in a move that will draw a line under the turmoil that has engulfed the British oil giant for two years.
BP, which has a market value of £107 billion, has appointed a headhunter to find a replacement for Peter Sutherland, who has chaired the company for the past decade. Anna Mann, doyenne of British headhunting, will conduct the international search.
The company has been rocked by a series of disasters. It faces lawsuits over an explosion at a Texas oil refinery in 2005 which killed 15 people. It has been attacked for lax safety standards in Alaska and for missing production targets. On top of this, its former chief executive, Lord Browne, was forced out earlier this year after admitting he lied in a court case. He has been succeeded by Tony Hayward.
These events severely damaged the reputation of the company, once seen as a model of British corporate governance.
Company sources insist Sutherland will not step down until his retirement date of 2009. However, others say the handover could happen within a year if a suitable candidate is identified.
The appointment of headhunters at this stage will be seen by many as a move to satisfy the appetite among some shareholders for a fresh start at the top. They also want a chairman who has a close knowledge of the day-to-day workings of a global oil giant.
One analyst said: “What they need is someone who can provide air cover to Hayward while he reshapes the structure of the company and tackles the opera-tional shortcomings.”
The search is being conducted internally by BP’s deputy chairman, Sir Ian Prosser. The internal frontrunner is thought to be Sir William Castell, one of Britain’s most senior industrialists.
Castell made his name in the City by transforming Amersham, a diagnostics firm, which he sold three years ago to America’s General Electric for almost £6 billion.
He then became one of the top directors at General Electric, a rare feat for a British businessman. He was appointed a nonexecutive director of BP in July last year.
Possible outsiders to take over from Sutherland include Sir John Parker, who is chairman of National Grid, and Sir Nigel Rudd, former chairman of Alliance Boots.
Sutherland, 61, originally joined BP’s board as a nonexecutive in 1990 and served for three years. He rejoined in 1995 and was appointed chairman two years later.
During Sutherland’s tenure, BP’s market value has soared from £20 billion to more than £100 billion. The seemingly unbeatable combination of Sutherland and Browne not only changed the nature of BP, then reliant on the North Sea and Alaska, but was also credited with modernising both the culture of the company and the image of the industry. But the two clashed last year when Browne, who at the time was dubbed the Sun King, carried out a public campaign to secure an extension to his contract beyond his 60th birthday.
The move backfired and split the BP board. Browne was later forced to accept a compromise deal.
Following his resignation, some leading shareholders suggested that it was time for a clean sweep of BP’s management, but agreed that it would be too desta-bilising for the company to lose both Sutherland and Browne.
Last week BP faced fresh embarrassment when a memo prepared for staff by Hayward was leaked. It included a blunt warning to staff that third-quarter revenues would be “dreadful”.
Hayward said that BP’s financial performance was at its lowest since 1992-93.
Mann, who has had a long relationship with BP, founded Whitehead Mann with her husband more than 30 years ago.
They built it into one of Britain’s biggest headhunters, but she left three years ago. One of her last searches for the company led to the ill-fated nomination of BP’s Prosser as chairman of J Sainsbury. Institutional pressure led to Prosser’s humiliating withdrawal. It has emerged that Browne has signed a deal with Ed Victor, a London literary agent, to write a book. With a working title, The Nobility of Business, it is understood to be a wide-ranging look at the history of business and “a celebration of capitalism”, said Victor.
Via: The Sunday Times |by
