BP and workplace relationships: new rules need follow through

BP and workplace relationships: a corporate governance education analysis into workplace relationships and how to handle them.

BP, the oil and gas corporation and one of the world’s largest companies has decided to take a far stricter stance on senior staff engaging in any kind of intimate relationships likely to cause conflicts of interest or similar concerns.

The stricter policy follows the high-profile resignation of former CEO Bernard Looney in September 2023 after four years in the top job. 

Looney’s reputation was thrown into the spotlight after he was found to have lied about intimate relationships he had within the company. The story made big corporate headlines when he departed the role. 

Now, it’s apparent that the company seeks to avoid another similarly embarrassing situation. 

Here are the details:

• In May 2022, an anonymous source within BP claimed about Looney’s relationships with colleagues. No breaches of the company’s code of conduct were found, and the company “sought and received written confirmation” that there was nothing further to be discussed.
• In September 2023, a second investigation prompted by a second anonymous source found that Looney did pursue relationships that breached the code of conduct. Looney resigned immediately after the conclusions were made public.

The company has given an ultimatum to all 4,500 of its top managers worldwide: you have three months to disclose all intimate relationships from the past three years or face penalties up to and including dismissal. 

Further additions to the code of conduct include:

• All managers must disclose “familiar or intimate” internal relationships whether or not they create a conflict of interest. Previously, employees only needed to disclose such relationships if they believed a conflict of interest existed.  
• Managers cannot – under any circumstances – manage employees with whom they have a familial or intimate relationship.

It’s an expected and sensible move by BP’s corporate leaders. 

BP is a huge company, with thousands of managers worldwide, each with personal and familial relationships, some of which could easily straddle the boundary between personal and professional lives. 

In that scenario—and following a high-profile and embarrassing CEO resignation—it makes sense to adopt a tough line from the top. It makes the company policy clear, bold enough that the media will pick it up and spread the word, and it demonstrates to employees that no matter where they are, they are part of the same group subject to the new rules.

It’s a sign that the BP is eager to end this saga as quickly as possible. Corporate leaders will always attempt this after top-level reputational damage. How well they do this depends on a few key factors:

• Whether serious governance flaws have been exposed that require a foundational re-vamp of structures
• Whether multiple instances of the same problem have been found
• Whether stakeholders are happy with directors’ and executives’ responses to the crisis

BP appear to be on the right side of these factors for now. The scandal involved Looney alone; the internal investigations (eventually) arrived at a sold conclusion, after which he left his post immediately. No similar revelations about other executives have arisen since, and the company has now changed its code of conduct. 

Easy out, right? Perhaps, but there’s one thing the company must pay attention to:

Cases like the Looney saga—or, rather, the company’s response to it—will accurately measure the company’s culture in the months and years ahead. 

It will test the on-the-ground impact of the code of conduct and whether the new rules will make a positive difference. 

Most directors and executives will know that culture is everything in governance. You can strategise and make all the new rules you want, but if the behaviour on the ground doesn’t match up, your company could suffer the same problems over and over again. 

That’s why BP’s leaders need to follow through on the new rules they’ve set. Intimate relationships, nepotism, and conflicts of interest are serious flaws that can steer a company away from its strategic goals, so the company needs to ensure that its tough approach has a lasting impact. 

Its leaders must ensure that they have the expertise needed to handle sensitive disclosures, to address them with relevant managers, and to ensure that the rules requiring honesty aren’t just followed now, on a once-off, when they should be company standards long into the future.

BP’s Looney saga brought the company some reputational risk, but a number of positive factors have ensured that the company has avoided a huge fallout. 

That said, the company has not brought in tough new rules, mirroring other big organisations that want to get serious about intimate internal relationships. The key to making sure those rules work is coming through on follow-up. That requires a top-down initiative, ready to address cultural flaws if necessary so the company can genuinely say that past standards are confined to history.