British Petroleum : UK Governance at Play

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Pic 01: Outgoing CEO (Forefront) with Incoming CEO (Background)

Watch the video on "Media Pressure" on BP.

United Kingdom’s strong governance at play with such effectiveness that USA President Obama has turned from anger to emotional appeal that British Petroleum giant oil company should stay and demonstrate repentance by cleaning up Mexico Gulf and contributing to American economy. Note the articles below on:

1. Governance tool: Transparency principle in that BP reveals action to shut the spill soonest within a week
2. Chairman’s tool: Through Nomination committee replaced the ineffective CEO
3. Chairman’s tool: As spokesperson for BP, met and appease USA President
4. Remuneration Committee: Set the severance pay for outgoing CEO
5. Media pressure a form of governance: Attention on the new CEO’s actions. Praises and encouragement for him
6. iNEDS tool: Have a succession plan in place. Deputy CEO considered the best choice for No.1 position.

RESULT: Share prices rebound by 37% since the departure of outgoing CEO. A neat piece of governance work safeguarding BP Shareholders’ interests!

Enjoy the following articles:
Article 01:
President Obama spoke yesterday with the chairman of the board of BP about their change in leadership, but BP CEO Tony Hayward's departure is "immaterial" to the company's obligations to the Gulf Coast in the wake of the oil spill, a White House spokesperson said today.
"The key is that BP can't leave and should not leave the Gulf," White House Press Secretary Robert Gibbs said at a briefing. "I think that's the viewpoint of everyone that's involved here, that they have obligations and responsibilities as the responsible party in this instance that have to be met, regardless of who the CEO is or who the chair of the company is."
BP announced Tuesday that embattled CEO Tony Hayward would step down from his position on October 1, and his American deputy, Bob Dudley, would take his job.
When asked by the British press whether his ouster was fair, Hayward replied, "Life's not fair," and said he was forced to leave because he was demonized by the American media. He also said he may be "too busy" to attend American hearings on the oil spill.
"What's not fair is what's happened on the Gulf," Gibbs responded today to the remarks. "What's not fair is that the actions of some have caused the greatest environmental disaster that our country's ever seen."
He added, " don't think that a lot of people in any country are feeling overly sorry for the former CEO of BP."

ARTICLE 02
British oil giant BP announced Tuesday morning that embattled CEO Tony Hayward would step down from his position on October 1, and his American deputy, Bob Dudley, would assume to top job.

In a statement accompanying its earnings update on Tuesday, BP said the decision was made by "mutual agreement."

The company said Dudley would be based in London when he takes up his appointment and will hand over his present duties in the United States to Lamar McKay, the chairman and president of BP America.

The newly named CEO said Tuesday his top priority would be sealing the company's blown oil well for good, and cleaning and restoring the Gulf of Mexico.

Hayward has been slammed by U.S. officials - including President Obama - for his handling of the Gulf oil spill.

Hayward is the bone being thrown to the angry dog of public opinion, reports CBS News correspondent Mark Phillips.

And as sacrificial lambs go, Hayward is an expensive one. Phillips reports the golden handshake from BP will involve a year's salary of $1.6 million, a pension worth roughly another million dollars every year, and BP shares that could be worth many more millions -- if the company's stock price recovers.

BP said Tuesday the company was allocating $32.2 billion to cover the costs of cleaning up after the spill and compensating the thousands of Gulf Coast residents put out of work by the waves of crude oil. The company said it would sell $30 billion worth of assets over 18 months to help foot the bill.

The cost figures were released along with BP's quarterly earnings report -- a record loss of $17 billion for the second quarter.

SOURCES:
Stephanie Condon, 2010, Obama Talks to BP Chairman About Hayward's Ouster,
http://www.cbsnews.com/8300-503544_162-503544.html?keyword=Tony+Hayward&tag=contentMain;contentBody, July 27

CBS NEWS BUSINESS, 2010,BP Confirms Tony Hayward Out, Bob Dudley In,http://www.cbsnews.com/stories/2010/07/27/business/main6716254.shtml?tag=contentMain;contentBody, July 27