Who should succeed Peter Sutherland as chairman of the oil giant? Russell Hotten assesses the potential candidates
One of the biggest jobs in British business will be filled this year when the white smoke goes up to signal who will replace Peter Sutherland as chairman of British Petroleum. Headhunters were appointed last September, but it is only now that some front-runners are starting to emerge.
Suggestions that British Petroleum non-executive Sir William Castell is a potential favourite are being perceived in the City as the start of a campaign to win over the board and key shareholders. He remains the bookies' favourite, but a shortlist of serious alternatives is emerging.
Big beasts including National Grid's Sir John Parker, former HBOS chairman Sir James Crosby and Sir Phillip Hampton of Sainsbury's and BT fame, are leading candidates. But you don't have to have a knighthood to be in the running, and according to insiders former BHP Billiton chief executive Chip Goodyear is regarded by some British Petroleum shareholders as their preferred choice. Paul Skinner, chairman of Rio Tinto, may be a viable candidate if he eventually succumbs to the advances of BHP Billiton.
One of the biggest jobs in British business will be filled this year when the white smoke goes up to signal who will replace Peter Sutherland as chairman of British Petroleum. Headhunters were appointed last September, but it is only now that some front-runners are starting to emerge.
Suggestions that British Petroleum non-executive Sir William Castell is a potential favourite are being perceived in the City as the start of a campaign to win over the board and key shareholders. He remains the bookies' favourite, but a shortlist of serious alternatives is emerging.
Big beasts including National Grid's Sir John Parker, former HBOS chairman Sir James Crosby and Sir Phillip Hampton of Sainsbury's and BT fame, are leading candidates. But you don't have to have a knighthood to be in the running, and according to insiders former BHP Billiton chief executive Chip Goodyear is regarded by some British Petroleum shareholders as their preferred choice. Paul Skinner, chairman of Rio Tinto, may be a viable candidate if he eventually succumbs to the advances of BHP Billiton.
Meanwhile, the City grandee Sir Nigel Rudd, now at the helm of airports group BAA and deputy chairman of Barclays, has been mentioned in connection with the job but already has his hands full. There have also been a couple of curious rumours that the initial list included ENI boss Paolo Scaroni and BAE Systems' chairman and ex-BP man Dick Olver. "About as much chance as Vladimir Putin," said one person this weekend.
One challenge facing Sir Ian Prosser, the BP deputy chairman who heads the board nominations committee running the selection process, is that there are not many people big enough to fill Sutherland's shoes. And those who are capable of doing the job are not necessarily available. In June 2006, British Petroleum's rival Royal Dutch Shell secured Jorma Ollila, ex-chief executive of Nokia, as its chairman. It was a coup, and BP will be hoping for someone of similar stature.
The role is of huge strategic importance for BP's global strategy, as well as key to the company's rehabilitation in the eyes of investors. "The chairman would be talking to middle managers one day, fund managers the next, and presidents and prime ministers of dodgy regimes the day after that," says a manager at Shell.
Luckily for British Petroleum, there is no desperate rush to find someone. Sutherland, who last year delayed his departure in order to maintain a semblance of stability during the disintegration of Lord Browne's tenure as chief executive, will now go early next year. The successful candidate might have a vested interest in starting later rather than sooner.
Disasters like the Texas City explosion in 2005 and oil spills have done immense damage to BP's reputation. Operationally, BP is, as its chief executive has admitted, "lagging its peers". A painful restructuring is under way. Such problems won't be solved overnight and a new chairman will play his part in repairing the damage. But why jump in at the deep end now?
Nevertheless, if, unlike Castell, the new chairman comes from outside the company he (and it will also certainly be a he) would still need time to wind up existing commitments, and to join the BP board for a couple of months as a non-executive in order to acclimatise and get to know chief executive Tony Hayward.
This is why Castell, 59, is many people's first choice. Indeed, he has been tipped as the heir-apparent ever since joining BP's board in July 2006. The formidable former chief executive of Amersham (one of the most successful government privatisations) is now chairman of Wellcome Trust and became a top director of General Electric, a rare thing for a non-American.
There is no other internal candidate to touch him. The others are likely to be too committed elsewhere, be too lightweight, or just not be interested. The only blot on Castell's landscape is that he is already a British Petroleum insider. It is not his fault that BP's image and profitability have suffered badly these past couple of years. But when a company turns bad, there is a tendency to look outside for new people.
A fund manager at one of the company's institutional shareholders says: "I am not saying that William would not be a good chairman. But, given the company's recent history, there will always be an argument that the job should go to a fresh face."
Another investor adds: "I hope the whole executive search process is not being done for corporate governance appearances, and that Castell is a shoo-in. I know the position requires someone of enormous talent, and the right people don't grow on trees. But there is a whole world of business out there to look at. I think you people are being a bit parochial in concentrating so much on UK names."
That is why there were raised eyebrows when the job of finding Sutherland's successor was given to Mann's search agency MWM Consulting. She is reportedly close to British Petroleum and Sutherland, and so in that respect may have greater clarity about what is needed. But an executive at a rival headhunter remarks: "MWM has no real international network, and there is a danger Mann will just turn up the same old names."
He says that choosing a new British Petroleum chairman is like choosing a secretary-general for the United Nations. It is a delicate process. The candidate must be seen as independent.
According to the recruitment executive: "These are the sort of sensitivities you have to take into account. Oil and gas companies negotiate contracts with governments and the political/ambassadorial role takes on a big significance. Unless the firm looking for the executive has a reach into many countries and contacts, there is a danger you miss the best candidate."
And even the headhunter believes that a British executive is the most likely choice. He says UK executives are renowned internationally for being able to negotiate through the political minefield of running a global business. "That's why John Parker is the best man," he adds. "He ticks all the boxes. He's highly credible. Strong on corporate governance. Knows how to handle politicians and bureaucrats."
Besides, you won't find the calibre of someone needed to be British Petroleum chairman in some backwater. They will be high profile and on any headhunter's radar screen, wherever they live or do business. This is why Chip Goodyear is said to be fast emerging as the leading contender from overseas. An American, who did a great job running an Anglo-Australian company, Goodyear has the benefit of being available.
He retired from mining giant BHP (which has a sizeable oil and gas division) last autumn and is said to be "cleansing" him of corporate life for a while to spend time with his family. He certainly knows how to run an international company and what it takes to manage long term investments of scale made by energy giants.
However, someone who knows him says: "He doesn't need the money, doesn't need the status, and probably doesn't want to live in London. Get around these, and you've got an ideal candidate."
ANNA GETS GET HER MANDATE
Headhunting mandates do not come much bigger than the chairmanship of BritishPetroleum, and headhunting names do not come much bigger than Anna Mann.
Much to the annoyance of her rivals, Mann has scooped the brief to replace Sir Peter Sutherland at the helm of Britain’s largest company by market value. The appointment is not short on intrigue. Almost four years ago, Mann left her eponymous headhunting firm Whitehead Mann soon after her nomination for the chairman’s post at J Sainsbury, Sir Ian Prosser, was rejected by angry investors in the supermarket group.
Now Mann finds herself leading the BritishPetroleum search under the watchful eye of the energy giant’s deputy chairman – none other than Sir Ian.
Mann has worked for BritishPetroleum for years, first when she was at the helm of Whitehead Mann, and continuing the relationship after 2004 when she established recruitment firm MWM Consulting. She helped assess contenders to replace Lord Browne of Madingley as BP’s chief executive, a job that went to internal candidate Tony Hayward.
Other clients have included Marks & Spencer and BT, and Mann is thought to have one-third of the FTSE 100’s biggest 50 companies on her books.
Besides, perhaps the critics are a little jealous. Not only will the appointment further cement Mann’s reputation as the queen of city headhunters, there will also be a fat fee of one-third of the candidate’s total first-year remuneration.
One challenge facing Sir Ian Prosser, the BP deputy chairman who heads the board nominations committee running the selection process, is that there are not many people big enough to fill Sutherland's shoes. And those who are capable of doing the job are not necessarily available. In June 2006, British Petroleum's rival Royal Dutch Shell secured Jorma Ollila, ex-chief executive of Nokia, as its chairman. It was a coup, and BP will be hoping for someone of similar stature.
The role is of huge strategic importance for BP's global strategy, as well as key to the company's rehabilitation in the eyes of investors. "The chairman would be talking to middle managers one day, fund managers the next, and presidents and prime ministers of dodgy regimes the day after that," says a manager at Shell.
Luckily for British Petroleum, there is no desperate rush to find someone. Sutherland, who last year delayed his departure in order to maintain a semblance of stability during the disintegration of Lord Browne's tenure as chief executive, will now go early next year. The successful candidate might have a vested interest in starting later rather than sooner.
Disasters like the Texas City explosion in 2005 and oil spills have done immense damage to BP's reputation. Operationally, BP is, as its chief executive has admitted, "lagging its peers". A painful restructuring is under way. Such problems won't be solved overnight and a new chairman will play his part in repairing the damage. But why jump in at the deep end now?
Nevertheless, if, unlike Castell, the new chairman comes from outside the company he (and it will also certainly be a he) would still need time to wind up existing commitments, and to join the BP board for a couple of months as a non-executive in order to acclimatise and get to know chief executive Tony Hayward.
This is why Castell, 59, is many people's first choice. Indeed, he has been tipped as the heir-apparent ever since joining BP's board in July 2006. The formidable former chief executive of Amersham (one of the most successful government privatisations) is now chairman of Wellcome Trust and became a top director of General Electric, a rare thing for a non-American.
There is no other internal candidate to touch him. The others are likely to be too committed elsewhere, be too lightweight, or just not be interested. The only blot on Castell's landscape is that he is already a British Petroleum insider. It is not his fault that BP's image and profitability have suffered badly these past couple of years. But when a company turns bad, there is a tendency to look outside for new people.
A fund manager at one of the company's institutional shareholders says: "I am not saying that William would not be a good chairman. But, given the company's recent history, there will always be an argument that the job should go to a fresh face."
Another investor adds: "I hope the whole executive search process is not being done for corporate governance appearances, and that Castell is a shoo-in. I know the position requires someone of enormous talent, and the right people don't grow on trees. But there is a whole world of business out there to look at. I think you people are being a bit parochial in concentrating so much on UK names."
That is why there were raised eyebrows when the job of finding Sutherland's successor was given to Mann's search agency MWM Consulting. She is reportedly close to British Petroleum and Sutherland, and so in that respect may have greater clarity about what is needed. But an executive at a rival headhunter remarks: "MWM has no real international network, and there is a danger Mann will just turn up the same old names."
He says that choosing a new British Petroleum chairman is like choosing a secretary-general for the United Nations. It is a delicate process. The candidate must be seen as independent.
According to the recruitment executive: "These are the sort of sensitivities you have to take into account. Oil and gas companies negotiate contracts with governments and the political/ambassadorial role takes on a big significance. Unless the firm looking for the executive has a reach into many countries and contacts, there is a danger you miss the best candidate."
And even the headhunter believes that a British executive is the most likely choice. He says UK executives are renowned internationally for being able to negotiate through the political minefield of running a global business. "That's why John Parker is the best man," he adds. "He ticks all the boxes. He's highly credible. Strong on corporate governance. Knows how to handle politicians and bureaucrats."
Besides, you won't find the calibre of someone needed to be British Petroleum chairman in some backwater. They will be high profile and on any headhunter's radar screen, wherever they live or do business. This is why Chip Goodyear is said to be fast emerging as the leading contender from overseas. An American, who did a great job running an Anglo-Australian company, Goodyear has the benefit of being available.
He retired from mining giant BHP (which has a sizeable oil and gas division) last autumn and is said to be "cleansing" him of corporate life for a while to spend time with his family. He certainly knows how to run an international company and what it takes to manage long term investments of scale made by energy giants.
However, someone who knows him says: "He doesn't need the money, doesn't need the status, and probably doesn't want to live in London. Get around these, and you've got an ideal candidate."
ANNA GETS GET HER MANDATE
Headhunting mandates do not come much bigger than the chairmanship of BritishPetroleum, and headhunting names do not come much bigger than Anna Mann.
Much to the annoyance of her rivals, Mann has scooped the brief to replace Sir Peter Sutherland at the helm of Britain’s largest company by market value. The appointment is not short on intrigue. Almost four years ago, Mann left her eponymous headhunting firm Whitehead Mann soon after her nomination for the chairman’s post at J Sainsbury, Sir Ian Prosser, was rejected by angry investors in the supermarket group.
Now Mann finds herself leading the BritishPetroleum search under the watchful eye of the energy giant’s deputy chairman – none other than Sir Ian.
Mann has worked for BritishPetroleum for years, first when she was at the helm of Whitehead Mann, and continuing the relationship after 2004 when she established recruitment firm MWM Consulting. She helped assess contenders to replace Lord Browne of Madingley as BP’s chief executive, a job that went to internal candidate Tony Hayward.
Other clients have included Marks & Spencer and BT, and Mann is thought to have one-third of the FTSE 100’s biggest 50 companies on her books.
Besides, perhaps the critics are a little jealous. Not only will the appointment further cement Mann’s reputation as the queen of city headhunters, there will also be a fat fee of one-third of the candidate’s total first-year remuneration.
Via: Telegraph | By EMMA THELWELL
Tags: fotolog|UK|BP|
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