Inside London

July 6, 2012 8:28 pm

BP’s man should follow Agius and vanish

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BP oil spill anniversary

Compare and contrast, as they say in all the best exams, styles of crisis management. Here’s Marcus Agius, resigning the chair at Barclays: “I am the ultimate guardian of the bank’s reputation. Accordingly . . . I must acknowledge responsibility by standing aside.” Here’s Carl-Henric Svanberg, not resigning the chair at BP: “It will be a different company going forward, requiring fresh leadership supported by robust provenance and a very engaged board.” It seemed that the ultimate guardian of BP’s reputation was not the chairman, but the chief executive.

Two years on, BP’s chairman is still there, and the company has yet to extricate itself from the hole it dug in the Gulf of Mexico. In two years’ time, Barclays’ Libor lies will surely be a distant nightmare.

By then, the signal should have penetrated the seven layers of the bank’s bureaucracy that tax fiddles, PPI, wheezes like Protium, and massive bonuses that come with the rations are no longer acceptable. Who knows, the board might even persuade the rowdy troops that honesty, fair dealing and respect for the customer may be in their interests as well as the bank’s.

A pledge to make Barclays socially useful may not turn the shares into a racy investment, but shareholders have had quite enough excitement watching the price fall from nearly £8 in 2007 to under 170p today. The house that Bob built stands at 40 per cent of the book value of its net assets – hardly a ringing endorsement for his swashbuckling expansion.

Mr Agius’s last task, having unresigned temporarily, will be to see in his successor. The safe selection would be Mike Rake, the senior non-exec, but such choices are not safe when the corporate culture is rotten. A better one would be Martin Taylor, hounded out as Barclays chief executive in 1998, although not before starting BGI, the fund management business subsequently sold to BlackRock for $15bn (Bob cleaned up there, too). As a member of the Vickers commission, Taylor would be a credible chairman behind a chief executive determined to force cultural change.

Like Barclays, BP is a serial offender. The Texas City oil refinery explosion should have been a cultural shock, but the Macondo blowout showed that it wasn’t. Today, BP looks like a business without a clear purpose. It’s been outmanoeuvred in Russia, while the Gulf of Mexico is more of a PR disaster than an environmental one. After such a failure of leadership, it’s time for BP’s invisible man to follow the Agius example, and disappear.

Neil Collins is a disillusioned BP shareholder.

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