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Looney performing in London


Bernard Looney, 53, quits as head of BP, from one day to the next. When a company boss resigns "with immediate effect", especially at such a large corporation – with around 67,000 employees and a turnover of 241 billion US dollars, BP is among the largest 30 companies on the planet – then it is always a bang: Why doesn't it have time until the next contract negotiations? So far, however, not too much is known about the case.

What did the Group communicate?

BP's press release states that Looney himself had notified the company of his resignation after accepting that he had not been sufficiently transparent with BP on certain disclosures. It is about Looney's personal relationships with colleagues. The communication is not clearer on this point.

It is described that there were already initial allegations in this direction in May last year, which the company had investigated. They are therefore based on an anonymous tip. However, the investigation did not reveal any evidence of violations of the rules of conduct. At BP's request, Looney had made a statement about the disclosure of previous relationships and that he would behave in accordance with the rules in the future.

Recently, there have been new indications that external legal advice has been called in to investigate the allegations. This process is ongoing, so it is not over with Looney's resignation.

Looney has now stated that he has not been "completely transparent" in his previous disclosures. He acknowledged that he should have informed BP more extensively.

Can someone please translate this?

This all reads very cloudy. Specifically, it could apparently be about affairs. However, as long as you don't have a personal statement from Looney, even that is not certain. Looney could not be reached for inquiries from SPIEGEL, and BP also let a 24-hour deadline for answering inquiries pass unused.

On the subject of affairs, you have to know: in many Anglo-Saxon corporations, the rules are very strict. Management personnel in particular usually have to contractually assure that they will not have any sexual relations with colleagues or will not allow them in the future; if this does happen, the employer must be informed. Such clauses can also be about excluding relationships that have existed in the past.

In this way, the companies want to protect themselves against cases of abuse of power. As a rule, it does not matter whether the relationships are described as consensual. Often, this can hardly be verified by outsiders, and court cases in such cases quickly turn into mudslinging. That's what corporations want to avoid. The #MeToo movement has certainly made companies more sensitive, and such cases were already problematic before.

It can therefore be read from the BP announcement: Yes, according to BP's account, Looney has violated information obligations towards the company with relationships in the workplace. On the other hand, nothing is known for sure about the surrounding circumstances. And because the rules in such corporations are so strict, this level of knowledge prohibits any conclusions about the possible nature of the relationships.

The British newspaper »Guardian« writes that details will certainly come to light in the near future, they have sources who are not surprised by the allegations. However, none of the investigations in May last year, which BP mentioned, got through to the media. Even in the British gossip press there is nothing.

Are there comparable examples at other companies?

Relationships in the company have often become a career killer for prominent managers. The classic example is McDonald's. In 2019, the fast food company fired its CEO Steve Easterbrook because he had "a consensual relationship with an employee". Former Intel CEO Brian Krzanich resigned in 2018 after the company found out he had "a previous relationship with an Intel employee."

Is this also handled so strictly in Germany?

Overall, the rules for good corporate governance in Germany are not as strict as in the USA. Freedom and personal rights also count for managers. With the #MeToo movement at the latest, however, questions about possible abuse of power are being asked more frequently than in the past. In their own corporate governance rules, many German companies now also exclude relationships with direct subordinates or their family members.

Are there any examples from Germany?

Yes, but usually not with such radical consequences. For example, when it became known at the Daimler car company that Wilfried Porth, then Chief Human Resources Officer, was in a relationship with digital manager Sabine Scheunert – as her superior. Dieter Zetsche, CEO at the time, took over parts of Porth's duties, but the couple remained with the company. Porth only left in 2021 after twelve years on the board, Scheunert in April of this year. The couple is now married. In the case of some other DAX companies, there are said to have been rumours of love affairs between board members and subordinates, but without consequences.

The former editor-in-chief of the »Bild« newspaper, Julian Reichelt, also lost his post due to alleged misconduct towards interns, volunteers and employees – he has always vigorously denied the allegations. However, the fact that Springer is currently strongly expanding its US business and is being measured by the standards there apparently also played a role in the assessment of the case by the management of the Springer publishing house.

Can Looney's retirement also be related to his achievements?

There is nothing about this in the company's announcement, the specific trigger is the investigation into its relationships. However, it may be that parts of the board of directors – which is responsible for the decision on the filling of the chief post – were not satisfied with Looney recently: BP's profit collapsed by 70 percent in the previous quarter; nevertheless, the dividend for shareholders was increased. Looney was also criticized for his own salary of twelve million pounds. Above all, however, his strategy of restructuring the oil and gas company BP in a climate-friendly way and investing in renewable energies was controversial.

Whether any of this played a role in the board of directors cannot be judged from the outside, it is not particularly likely. It remains to be seen whether the group's strategy will change dramatically after the change in leadership.

What's next for BP?

As the company announced on Tuesday, Chief Financial Officer Murray Auchincloss will lead BP temporarily until a new CEO is found. Together with Looney, the 52-year-old Canadian had led the group through the turmoil of recent years – from the corona pandemic and a quick exit from Russia to the energy price shock and global inflation. At least with him, there will be no fundamental turn. The experts of the US financial analyst Bernstein do not expect a radical change in strategy.

BP's board of directors will have to face the uncomfortable question of whether it may have known about Looney's rule violations for some time, writes the Guardian. And indeed, what is striking about BP's presentation is that no wrongdoing was found in last year's investigation: But why did the company demand an explanation from Looney?

And what will become of Bernard Looney?

The BP announcement states that the investigation is still ongoing. In doing so, the company is leaving all options open, depending on what else may still be found. Legal proceedings or claims for compensation are also conceivable. BP explicitly writes: "No decisions have yet been made regarding the remuneration payments to Mr. Looney."

Looney is a BP man through and through. The Irishman, who grew up on a dairy farm in County Kerry, started working for the energy giant at the age of 21 after studying electrical engineering in Dublin and earning a master's degree in management at Stanford – that was in 1991. When he recovers from the fiasco, he will have to start all over again.

With material from Reuters