BP chair rules himself out as next chief executive

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Helge Lund, the chair of BP, has ruled himself out as the oil giant’s next chief executive, as he rushed to reassure shareholders it was “business as usual” following the abrupt departure of boss Bernard Looney.

Lund, a Norwegian former chief executive of Equinor, has told investors in a series of emergency meetings that he will remain chair and will not replace Looney, BP confirmed on Thursday.

Looney quit BP on Tuesday after admitting he had failed to disclose the extent of past relationships with staff. Lund, who is also chair of Danish drugmaker Novo Nordisk — which this month became Europe’s biggest company by market capitalisation — was mooted as a possible replacement CEO.

In the meetings with investors, Lund stressed that the company’s strategy will remain unchanged and presented himself as a “safe pair of hands”, according to one major shareholder who spoke with him this week. “He said it was business as usual and strategy unchanged.” 

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But Lund offered no further information on the number or nature of Looney’s personal relationships with staff, including those the departing CEO allegedly failed to disclose, the investor added.

A second major shareholder questioned whether the board had conducted sufficient due diligence when selecting Looney to run the company in the second half of 2019. 

The nature of Looney’s resignation “raises questions around BP’s ethics and culture . . . we are left wondering how it could still happen in companies of that size,” the shareholder said. “The real question we have is . . . how come the board was not stricter”.

Looney is not the first BP chief executive to resign under strained circumstances over personal relationships. Lord John Browne resigned in 2007 after lying to a court over how he met his partner.

BP said there was a “rigorous and thorough appointment process” when Looney was selected to be chief executive in 2019. That included “a thorough due diligence process pre-appointment, vetting of open-source data and interviews with Bernard”.

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When new information about past relationships with colleagues surfaced from an anonymous source in May 2022, BP’s board opened an external review, after which Looney assured the board he had nothing further to disclose.

The Irish executive then resigned on Tuesday after the board received a second set of allegations as recently as last week. BP’s chief financial officer, Murray Auchincloss, was appointed interim chief executive after Looney’s resignation.

The first major shareholder said he understood that Looney had disclosed information about some past relationships to the board in 2019. “As long as the board was happy he made full disclosure. They did all that they could do,” the investor said. “He was a good CEO for the business so I wouldn’t give the board a hard time for putting him in that position.”

One person familiar with the CEO selection process said in the years prior to Looney’s appointment, the board and top BP executives viewed his romantic life and relationships as private and not the domain of the company. He married in 2017 and was divorced by the time he became chief executive in February 2020.

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Three people familiar with Looney’s appointment said any misgivings about him because of his personal relationships with colleagues were outweighed by his record at the company.

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Source: https://www.ft.com/content/992252d3-768d-4a0a-8b29-da875e4ed8ae