Jonathan Leake
Fri, 15 September 2023
Bernard Looney, 53, was forced to resign this week after admitting he had misled the board about the extent of his relationships with colleagues - Prakash Singh/Bloomberg
BP was aware of Bernard Looney’s relationships with colleagues before he became chief executive in 2020, it has emerged.
Board members quizzed Mr Looney about the relationships in the autumn of 2019 during the recruitment process that led to his appointment.
Mr Looney, 53, was forced to resign this week after admitting he had misled the board about the extent of his relationships with colleagues.
BP issued a statement saying Mr Looney had failed to fully disclose the extent of his relationships during an internal inquiry conducted in 2022. The investigation was opened following an anonymous complaint that was made internally.
However, it has now emerged that Mr Looney was also quizzed about his workplace relationships in autumn 2019 during the recruitment process that led to his appointment.
That process was led by Helge Lund, BP’s chairman.
The revelation will raise new questions about the board’s judgment in appointing Mr Looney and about the company’s processes for appointing senior executives.
It came as the Guardian reported that BP was now reviewing all personal relationships between staff, with a particular focus on senior leaders.
Ann Francke, chief executive of the Chartered Management Institute, said: “Reports that BP’s board knew about these serious allegations before appointing Looney as CEO is a classic example of what goes wrong when companies prioritise technical competence at the expense of behaviour.”
BP’s code of conduct does not forbid workplace relationships. However, it does state that relationships must be declared if there is any risk of a conflict of interest.
For a chief executive, any past or present relationship with a colleague could risk such a conflict and so should be declared.
The fact that Mr Looney had disclosed at least some of his pre-2020 relationships to board members emerged during a series of meetings with investors held by Mr Lund and Murray Auchincloss, BP’s interim chief executive.
Mr Auchincloss has been at BP for over two decades and was a close ally of Mr Looney. Mr Auchincloss is also in a relationship with a colleague at BP. The company has said the relationship was properly disclosed and does not breach any rules.
Ms Francke, who has held senior executive positions at companies including Mars and Boots, said: “As [BP] addresses this situation, and hopefully their corporate culture more broadly, they must ensure they’re not over reliant on insiders to fix this crisis.”
The board has appointed law firm Freshfields to conduct an investigation into Mr Looney’s conduct. The inquiry will also examine BP’s broader culture.
A BP spokesman said: “The recruitment of Mr Looney was done with full due diligence in the autumn of 2019.
“The board would have carried out a thorough process which would have included talking to him about personal issues. This would have included talking to him about previous relationships. There was also an extensive review of open source data.”
Some rival UK oil and gas producers have welcomed Mr Looney’s departure, blaming him for the imposition of the windfall tax in 2022.
It follows remarks he made in late 2021 comparing BP to a cash machine because of its then surging oil and gas income. In 2022 at a shareholders meeting he also said a windfall tax would make no difference to BP’s investment plans.
Robin Allan, chair of Brindex, the Association of British Independent Exploration Companies, said Mr Looney’s actions “left No 10 with nowhere to go in resisting the calls for a tax”.
Mr Allan said: “We hold him responsible for the windfall tax or energy profits levy.
“That tax has had a really bad impact on the UK’s independent oil and gas operators and we told the Government that in advance.”
The windfall tax has seen overall levies on UK oil and gas production rising from 40pc to 75pc.
It applies only to oil and gas produced in UK waters so it has hit the smaller North Sea operators particularly hard.
Multinationals such as BP and Shell, by contrast, make more than 90pc of their profits in other countries and so have are relatively unaffected by the windfall tax.
BP to review personal relationships between staff to root out ‘problematic’ conduct
Anna Isaac and Jillian Ambrose
Fri, 15 September 2023
Photograph: Daniel Leal/AFP/Getty Images
BP has launched a review of all personal relationships between its staff, particularly at senior levels, to root out any “problematic” conduct, the Guardian can reveal.
The oil and gas company’s chief executive, Bernard Looney, quit on Tuesday night after an investigation into his personal relationships with colleagues. His departure left the company facing questions over its governance and culture.
BP said this week that an anonymous whistleblower in May 2022 had triggered an investigation into Looney’s conduct, during which he admitted to a “small number of historical relationships” before he became chief executive in 2020. At the time he gave the board assurances about his past relationships and future behaviour. Since then, further allegations had recently come to light, BP said, and Looney admitted he was “not fully transparent in his previous disclosures”.
It is understood that BP’s review is particularly focused on relationships involving senior managers. “The issue is bigger than Bernard,” one source familiar with the review said. More broadly there were concerns about a “male-dominated, macho, problematic culture” in that some staff had failed to realise the governance issues that undisclosed relationships could cause and simply regarded it as senior men being “players”, the same source said.
BP has more than 67,600 staff and spans 62 countries. Looney resigned after less than four years at the helm, and more than two decades with the company.
Sources also claim that there have been “problematic” relationships involving senior staff.
“BP is a huge company, where people often stay for decades. It becomes its own universe, and the lines between work life and personal life become very blurry. This can obviously cause problems,” an industry source said.
BP said it had found no breach of its code of conduct after its review into Looney’s relationships last year. The code warns employees that conflicts of interest may arise if their “interests or activities affect, or appear to affect, your ability to make objective decisions for BP”. This includes “having an intimate relationship with someone whose pay, advancement or management you can influence”.
Prior to Looney’s shock exit he had won praise for championing workplace diversity, particularly in encouraging better gender representation in its graduate intake as well as its senior leadership team.
Looney also spearheaded campaigns to improve mental health awareness at the company. Women make up almost 40% of BP’s staff while the senior leadership team and the board are evenly split between men and women.
Looney’s abrupt departure left the oil company reeling, with concerns that it may not stick to its plan to clean up its carbon emissions. Its chair, Helge Lund, who appointed Looney to the job, has insisted its decarbonisation strategy, which involves shifting away from hydrocarbons to renewables, is unchanged.
Some investors have also questioned whether the board should have disclosed the 2022 review into Looney’s relationships with staff to the market.
Multiple sources have claimed that Looney’s relationships were an “open secret” within the oil and gas industry, and that his reputation for conducting personal relationships with colleagues predated his appointment as chief executive.Interactive
One senior oil industry source told the Guardian earlier this week: “It has been an open secret for some time, and the BP board must have known about his reputation before he was appointed as chief executive. It’s absolute nonsense to suggest that this came to light last year.”
Lund has begun the hunt for a new chief executive and will consider hiring an outsider to the role for the first time in more than 30 years. Internal candidates for the job include the interim chief executive, Murray Auchincloss, the former chief financial officer. Lund has reportedly ruled himself out of the race to fill the top job.
The son of Irish dairy farmers, Looney joined the company as a 21-year-old graduate from University College Dublin in 1991. As a drilling engineer, he worked in the North Sea and the Gulf of Mexico before attending the Stanford Graduate School of Business in 2004. He returned to BP with a masters of science in management.
BP declined to comment on the internal review. Looney was approached for comment.
Anna Isaac and Jillian Ambrose
Fri, 15 September 2023
Photograph: Daniel Leal/AFP/Getty Images
BP has launched a review of all personal relationships between its staff, particularly at senior levels, to root out any “problematic” conduct, the Guardian can reveal.
The oil and gas company’s chief executive, Bernard Looney, quit on Tuesday night after an investigation into his personal relationships with colleagues. His departure left the company facing questions over its governance and culture.
BP said this week that an anonymous whistleblower in May 2022 had triggered an investigation into Looney’s conduct, during which he admitted to a “small number of historical relationships” before he became chief executive in 2020. At the time he gave the board assurances about his past relationships and future behaviour. Since then, further allegations had recently come to light, BP said, and Looney admitted he was “not fully transparent in his previous disclosures”.
It is understood that BP’s review is particularly focused on relationships involving senior managers. “The issue is bigger than Bernard,” one source familiar with the review said. More broadly there were concerns about a “male-dominated, macho, problematic culture” in that some staff had failed to realise the governance issues that undisclosed relationships could cause and simply regarded it as senior men being “players”, the same source said.
BP has more than 67,600 staff and spans 62 countries. Looney resigned after less than four years at the helm, and more than two decades with the company.
Sources also claim that there have been “problematic” relationships involving senior staff.
“BP is a huge company, where people often stay for decades. It becomes its own universe, and the lines between work life and personal life become very blurry. This can obviously cause problems,” an industry source said.
BP said it had found no breach of its code of conduct after its review into Looney’s relationships last year. The code warns employees that conflicts of interest may arise if their “interests or activities affect, or appear to affect, your ability to make objective decisions for BP”. This includes “having an intimate relationship with someone whose pay, advancement or management you can influence”.
Prior to Looney’s shock exit he had won praise for championing workplace diversity, particularly in encouraging better gender representation in its graduate intake as well as its senior leadership team.
Looney also spearheaded campaigns to improve mental health awareness at the company. Women make up almost 40% of BP’s staff while the senior leadership team and the board are evenly split between men and women.
Looney’s abrupt departure left the oil company reeling, with concerns that it may not stick to its plan to clean up its carbon emissions. Its chair, Helge Lund, who appointed Looney to the job, has insisted its decarbonisation strategy, which involves shifting away from hydrocarbons to renewables, is unchanged.
Some investors have also questioned whether the board should have disclosed the 2022 review into Looney’s relationships with staff to the market.
Multiple sources have claimed that Looney’s relationships were an “open secret” within the oil and gas industry, and that his reputation for conducting personal relationships with colleagues predated his appointment as chief executive.Interactive
One senior oil industry source told the Guardian earlier this week: “It has been an open secret for some time, and the BP board must have known about his reputation before he was appointed as chief executive. It’s absolute nonsense to suggest that this came to light last year.”
Lund has begun the hunt for a new chief executive and will consider hiring an outsider to the role for the first time in more than 30 years. Internal candidates for the job include the interim chief executive, Murray Auchincloss, the former chief financial officer. Lund has reportedly ruled himself out of the race to fill the top job.
The son of Irish dairy farmers, Looney joined the company as a 21-year-old graduate from University College Dublin in 1991. As a drilling engineer, he worked in the North Sea and the Gulf of Mexico before attending the Stanford Graduate School of Business in 2004. He returned to BP with a masters of science in management.
BP declined to comment on the internal review. Looney was approached for comment.
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