BP resignation story: how has the board fared

And, crucially, what are its priorities now that CEO Bernard Looney has left with immediate effect? 

It’s a delicate situation that those in governance need to get right to avoid further headaches.

The BP resignation story kicked off when Looney announced he would immediately leave the company – after less than four years at the top of one of the world’s biggest oil giants. 

In a statement, the company said that his departure comes in response to misleading the board of directors about his personal relationships with BP colleagues. 

Looney had not been “fully transparent” about these relationships until the days leading up to his resignation, the statement said.

Officially, only as much as their investigations told them. 

There were two in total. The first came in May 2022 – prompted by allegations from an anonymous source. It found no breach of BP’s code of conduct, and the board then “sought and received written confirmation” that there were no further relationships to be disclosed. 

The second in September 2023 evidently disproved that confirmation. Once again prompted by an anonymous source, it found that further relationships breached the code of conduct. Looney’s resignation quickly followed.

The board’s speed during the second investigation warrants praise. According to the Financial Times, the allegations prompting this second investigation were made barely a week before Looney’s departure. 

It shows the board acted fast on accusations and sought swift answers. It’s the kind of behaviour we should expect from directors – especially in the context of reputational risk and company culture, which the board has a lot of control over.

This was the second investigation into the same issue. 

We can’t fault the board too much on this. It received written confirmation that Looney had no further relationships to divulge. His apparent lie is what’s landed the organisation in hot water again.

There’s no getting away from the public headache that comes with taking two investigations to arrive at one conclusion. However much the board tried to avoid this moment, the moment has happened anyway, leaving questions about how they got to this point.

It’s not a good situation for BP, but it could have been much worse. For example, the company’s reputation is slightly shakier, but its share price has recovered since tumbling the day after Looney’s resignation. 

The key is replacing Looney. He may have been under fire for taking a £10 million paycheque in the same year that many struggling British families couldn’t afford heat and electricity, but Looney has left a mark on the company. 

He arrived with ambitious net-zero goals, only to be pushed into a balancing act between activist investors who wanted more green policies and others who wanted more short-term profits. 

Looney’s successor will have to continue this policy and ensure the company can adapt through the endless scrutiny of oil giants. It’s the board’s responsibility to ensure they have the right person for that job.

That’s the question we must keep asking as the hiring process begins. BP’s Chair, Helge Lund, has indicated that the company will also consider external candidates. It’s an unusual move for the company but realistically necessary for successful succession planning. 

How well they fare in finding a replacement depends on how closely they analyse candidates’ skill sets and compare them with their own corporate strategy. 

And make no mistake: for BP – an oil giant in the middle of a global drive for sustainability – the right corporate strategy is a challenge in itself.