The Browne legacy

Revelations about his private life led Lord Browne to resign early from his job as CEO of BP. But sad as it is that personal matters should impact so dramatically the CEO's career, one should not forget that Browne still has a lot to answer for at BP.

by The Independent; The Financial Times
Last Updated: 13 May 2016

Until 2005, Browne's track record was pretty faultless. From apprentice in 1966 to CEO in 1995, his progression had been patient but determined. The first 10 years of his 12-year tenure as chief exec paint a remarkable achievement: in just a decade, the stock market value of BP quadrupled from £24.4 billion in 1995 to £108 billion today, a feat achieved through a series of daring acquisitions: Amoco, Atlantic Richfield, Burmah Castrol, TNK.

But the last couple of years have been marred by a series of disasters: first, the explosion of BP's Texas City refinery which killed 15 people and injured 170; then oil leaks at Prudhoe Bay in Alaska; and finally the damage of the Thunder Horse platform in the Gulf of Mexico after Hurricane Dennis. The latter cost BP billions in lost production, but the Texan and Alaskan disasters cost BP its reputation, something more intangible to evaluate yet infinitely more costly.

BP faces a number of criminal charges for both the Prudhoe Bay spillage and the Texas City disaster. Lord Browne may not be directly responsible for either of these accidents but US courts found that at least in the case of Texas City, BP had grossly neglected safety on the site and led a deliberate policy of underinvestment. Browne could still be called to give evidence over the course of the trials.

In the end, it is because of a lie that Lord Browne had to go. The chief executive was trying to prevent the publication of a story about his relationship with Jeff Chevalier with an injunction. Browne says he'd done so because he was embarrassed and shocked by the revelations. This he has since admitted and apologised for - but the judge was not impressed and said he would not make allowances for a ‘white lie' from a man such as Browne who relied on his reputation in his work.

Lord Browne may have left 18 months early and £15m short of compensation, but this is not what he should be remembered for. For good or bad, his legacy at BP will outlive him for many years to come. That is what he should be judged on.

Sources:
Did Lord Browne deserve to be the world's most admired businessman?
The Independent, Thurs 3 May 2007

A shabby end to a brilliant career
Ed Crooks
Financial Times, Wed 2 May 2007

Review by Emilie Filou

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