Score one for the Louisiana legal system. BP has gained a notable, and rather unexpected, victory in the US appeals court in New Orleans over Patrick Juneau, the administrator of claims for damages relating to the 2010 Deepwater Horizon disaster.
BP went to court over the way Mr Juneau interpreted its settlement with businesses claiming compensation. It argued that he was allowing loose claims by businesses that happened to suffer a dip in revenues after the spill simply because of cashflow anomalies. Read more
Not since Barings financed the Louisiana Purchase on behalf of Thomas Jefferson in 1803 has a UK enterprise had so much money riding on the Gulf of Mexico state. It isn’t working out as well for BP as for the former merchant bank.
In the list of phrases that should be scratched from the management lexicon, “safe pair of hands” comes pretty high.
The man named to be chief executive of BG, Chris Finlayson, is the latest to be awarded this dubious accolade. He meets two of the requirements for the safe-hands epithet: he’s an insider – though he’s only worked for the UK oil and gas producer since August 2010 – yet he is also “seasoned” (another term that should be banned – executives aren’t sauces, for goodness’ sake).
There are four main reasons why the phrase is more curse than compliment:
1) It has a damned-with-faint-praise tone, sometimes implying that the company couldn’t find a really exciting candidate, so they played safe.
2) It is often an indication that people don’t know as much about the corporate insider as they would know about a high-profile outside candidate.
3) Safety may be a virtue in some cases but an overcautious leader is not always what companies need.
4) “Safe” is often the last thing a safe pair of hands turns out to be. In fact, the record of leaders in the safe-hands hall of fame is as spotty as that of any other executive or politician. Read more
The likely end of BP’s tempestuous, yet profitable, partnership with a group of Russian oligarchs in TNK-BP is a moment to tot up the costs and benefits. Financially, it came out on top, but it certainly suffered along the way.
I’ve kept an interested eye on TNK-BP since writing about the energy venture in 2003, when it was formed. I judged then that it was worth it for BP to risk being stitched up by its new partners (the article is not online): Read more
If the US Department of Justice does push its accusations of gross negligence against BP to trial, disinterested observers can look forward to a detailed exploration of the oil company’s culture and management.
As I wrote in my first column as FT management editor in 2011, the report issued by Barack Obama’s national commission into the Deepwater Horizon disaster reads like a guide to the challenges of implementing cultural change, fighting complacency, running a collaborative “extended enterprise”, and managing risk. BP’s own 2010 accident investigation report, based on an investigation by Mark Bly, the group’s head of safety and operations, took a far narrower view. There are 69 references to culture in the national commission report, for instance; there are none in BP’s, and the only discussion of management is focused on specific operational issues. Read more
The latest tussle between BP and the billionaire oligarchs with whom it owns BP-TNK, its Russian oil joint venture – this time over BP’s wish finally to sell out – reminds me of the controversial way in which it started.
I wrote a column in 2003 arguing that, despite all of the risks of becoming partners with AAR in Russia, BP probably ought to do it. The rewards were worth the obvious prospect of being double-crossed. Read more
Old habits die hard in US corporate governance: Pfizer has just announced it will hand chief executive Ian Read the chairmanship. That re-creates the dual chair-CEO role and goes against the slow US trend towards splitting the two top board jobs.
According to Spencer Stuart, the headhunter, 41 per cent of top US companies now separate the roles (though the chairmanship is too often held by the ex-CEO), compared with 26 per cent in 2001. So, as governance expert Lucy Marcus tweeted on Tuesday, Pfizer’s decision is an “astonishing step backward“. Read more
One common public perception of business – as I blogged earlier this week – is that the bigger it is, the worse it is. I was interested, therefore, to read in The Times on Friday that Britain’s top 50 businesses are to get a “hotline” to senior ministers. The paper writes (subscription required):
Bosses of companies, including BP and GlaxoSmithKline, will be able to telephone directly to the top of Whitehall departments in new individually tailored relationships with senior ministers who will act as their “buddies”.