More trouble for BP’s board; courtesy of RBS

Can things get any worse for BP’s board? Having already lost Sir Tom McKillop, it is again under pressure because of connections with the Royal Bank of Scotland.

Corporate governance advisers Pirc are recommending shareholders vote against Peter Sutherland’s re-election as chairman due to his presence on the RBS board, and in particular on its remuneration committee. That committee approved former RBS chief Sir Fred Goodwin’s controversial £703,000-a-year pension plan.

Sutherland only agreed to stay on until the 2010 AGM when finding a replacement in time for this year’s meeting – which takes place next week – proved difficult.

Pirc said:

“His actions as a non-executive director of Royal Bank of Scotland and as a member of its remuneration committee bring into question his suitability as BP’s chairman,” PIRC said in a statement.

BP replied:

“Peter Sutherland has proved to be a deeply able and highly respected
chairman of bp for the past decade. Pirc made it clear that they would
support hi reelection based on his record at BP. So it is a great pity that
they have chosen to oppose him on grounds that have nothing to do with the
company, all the more so because he is retiring anyhow and has only agreed
to stay on until a successor is found. Pirc’s view is not shared by other
shareholders.”

Pirc’s recommendation is unlikely to prevent Sutherland’s re-election, but it’s still unfortunate timing for BP.

To recap:

- Sir Tom announced last week he would step down from BP, his last remaining mainstream board position, amid shareholder criticism because of his role as chairman at RBS

- Sir Ian Prosser, deputy chairman, has been on the board since 1997, and Erroll Davis has been a director since 1998 – both exceeding the 10 year limit, and are unlikely to seek re-election in 2010

- Replacing Peter Sutherland is proving far from easy; Rio TInto chairman Paul Skinner was identified as a likely successor but in February he withdrew amid opposition from shareholders wary of his association with the controversial Chinalco deal

In fact with Brian Groat, the CFO, coming up for retirement, there is only one board member at all likely to be around after next year’s AGM: Cynthia Carroll, chief executive of Anglo American.

Click the thumbnail for a pictorial guide to the woes of BP’s board – published prior to the Sir Tom McKillop announcement.

Related links:

Pirc urges investors to vote against BP chairman (Reuters)
McKillop steps down as BP non-executive
(FT)
Skinner is hit by a dizzying reversal of fortune
(FT)

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

Read our farewell note

About the blog

Archive

« Mar May »April 2009
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930