BP BP.L is keen to move on. Interim CEO Murray Auchincloss on Wednesday stressed that the $110 billion oil giant would stick to its strategy and that Chair Helge Lund and other non-executive directors supported that approach. But the surprise departure of former leader Bernard Looney the previous day reflects poorly on the company’s board. It should start by looking hard in the mirror.

Looney’s resignation, after failing to fully disclose details of past relationships with colleagues, appears to have caught BP by surprise. That’s embarrassing for the board, whose responsibilities include planning for succession in case something happens to the CEO. The gold standard is represented by companies like $88 billion drinks giant Diageo DGE.L, which smoothly lined up Chief Operating Officer Debra Crew to replace CEO Ivan Menezes earlier this year. The fact that BP appears to be only just starting an internal and external search for a new boss suggests it was less alert.

Granted, it’s hard for companies to have a ready-made CEO on standby. But questions over Looney’s conduct were hardly a surprise. BP launched a probe into his conduct in May 2022, after which the Irish executive conceded that he had been in relationships with colleagues before taking the top job. The board decided Looney had not broken BP’s company code of conduct, which at the time stated managers could not have a relationship with an immediate subordinate. But even though the CEO provided assurances that he had disclosed all past personal relationships, the board should have planned for the possibility of further details emerging.

The lack of preparation is more striking considering that only one of the previous three BP CEOs left of his own accord. Indeed, there are some parallels with John Browne’s 2007 departure. Browne, who like Looney championed a shift towards renewable energy, left after misleading a British judge while trying to prevent a newspaper publishing revelations about his private life. Browne’s exit accelerated his planned departure, allowing BP to install Tony Hayward as his permanent replacement. Hayward quit three years later following the Deepwater Horizon oil spill.

BP’s succession missteps aren’t occurring in a vacuum. Lund is likely to face searching questions from shareholders about BP’s strategy. Those investors keeping faith need to have confidence the board can recruit the best available CEO. Right now, that’s open to question.
Source: Reuters (Editing by Peter Thal Larsen and Oliver Taslic)