Browne, Haywood and the BP Leadership Transition


Lord Browne’s resignation as head of BP on May 1st 2007 gets the Tabloidification treatment. Browne, credited with the rise of BP as a global oil company, and an exceptional businessman, has been brought down ultimately after admitting to lying in a court case. But the transition at BP to Tony Hayward as CEO is an equally instructive leadership story.

May 1st 2007

The Mail on Sunday has won the right to publish details of Lord Browne’s homosexual lifestyle. In his attempt to prevent publication, Lord Browne fabricated evidence to support the story he told in court. When this came to light, his resignation from BP followed.

The Economist this week called it the sad downfall of a Business Gernius.

A more interesting business story

A more interesting business story can be found accompanying Lord Browne’s decline and fall at BP. In his forty years with the company, his rise to CEO was hailed as a model of a self-made leader. He earned numerous honours for his significant part in BP’s transformation into one of the seven sisters, the billion dollar global oil giants.

Increasingly, the exploration game became less profitable. Efforts were made to cut back on expenses. A major disaster at the company’s Houston refinery, and a pipeline maintenance crisis in Alaska brought BP’s leadership under scrutiny. At a time when executive remuneration packages were increasingly challenged by investor pressure groups, Lord B’s arrangements were drawn to more public attention.

In January, 2007, Lord Browne who had planned to retire at the end of 2008, announced plans to bring forward his retirement to July. His chairman, Peter Sutherland described the out-going chief executive as

“the greatest British businessman of his generation .. his vision, intellect, leadership and skill have been a wonder to behold and he will be a difficult act to follow.”

A few weeks before he resigned, it was reported that Lord Browne would be leaving the company with a £5.3m pay-off, £21.7m pension, and millions of pounds in shares from his incentive arrangements. This was itself a controversial story, and opposition from individual shareholders was only resisted by support from institutional investors at the company’s AGM.


As BP’s problems accumulated, another senior executive at BP critically reviewed the company’s leadership in light of the Alaska and Texas City issues. A speech to company employees found its way on to the internet.

Head of exploration Tony Hayward made the comments at a town hall meeting in Houston, BP confirmed to the BBC.
Mr Hayward said leadership does not listen enough to what “the bottom” says and that safety needed more work.
The remarks, put on the intranet by staff, comes with BP in the firing line over recent incidents affecting safety.
A blast in March 2005 at BP’s Texas City refinery near Houston killed 15 people and injured 180.
And in the past year it had to close half its Alaskan oil field due to severe corrosion along its pipeline there.

Within weeks

Within weeks, Tony Hayward was appointed CEO designate, to take over when Lord Browne stepped done. This came to pass on 1st May 2007 on Browne’s resignation.


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