06.10.10 7:12 PM ET
Why Is BP's Former Boss a U.K. Hero?
The “British” part of British Petroleum is giving expat Brits like me extra reasons to loathe the company. I can understand why the fiasco in the Gulf of Mexico is provoking xenophobic reactions about “foreign” oil companies, even though any major oil company today is, in truth, a global corporation, with all the supranational tentacles of political influence that implies.
Nonetheless, this is a peculiarly British mess that reflects not just on the company but on the country.
The search for culpability begins with the corporate culture of BP. This is, after all, a company with a truly egregious record on operational safety. In the last three years, BP racked up 760 safety violations while the two other closest offenders among oil companies each had only eight. How did BP become an unprincipled bottom-line operator ready to cut any corners for profit?
Click Below to Watch Browne’s Farewell Speech
It’s all about the man who preceded the clueless present CEO, Tony Hayward—John Browne, who, as Lord Browne of Madingley, ran BP for 12 years.
In that time, Browne became a British national hero, pursuing and enjoying a cult of personality that reduced normally hard-nosed journalists to fanzine banalities: Browne, said The Guardian in an editorial, was “the nearest thing British business has to a rock star.” In 2002, he was memorialized in a now-infamous profile in the Financial Times as the Sun King, and voted “Britain’s most impressive businessman” for six consecutive years.
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• Shocking photos of oil-soaked animals in the Gulf
• Eric Dezenhall: Why BP Didn’t Plan for This CrisisAll the time, as Browne re-branded BP with its green sunburst as “Beyond Petroleum,” he was ruthlessly slashing any costs that seemed inessential, which included rules of operational safety and levels of redundancy that other oil companies thought essential. The most spectacular exposure of this regime came with the 2005 explosion at BP’s Texas oil refinery that killed 15 people and injured 170 others, some with horrendous burns, for which it paid $50 million in criminal fines and $87.4 million to the Occupational Safety and Health Administration for a single violation of willful negligence.
Even that did very little to dim the glow of the Sun King among his British fanbase. That is because he had become the definitive beneficiary of what I would call Vicarious Tycoon Syndrome.
In the absence of more traditional heroes from the age of empire, the Brits had become unguarded and swooning fans of anyone from the one group of people left who, in Tony Blair’s words, enabled Britain to “punch above its weight”—those who could turn a business into an “international champion.” This included suspending all normal laws of ethical behavior, as in the case of British Aerospace, a defense contractor that had institutionalized bribery as a way of selling weapons to Saudi Arabia (a scandal ended only after the intervention of U.S. authorities).
Vicarious Tycoon Syndrome was self-perpetuating: Given such an uncritical audience, Browne believed in his own propaganda, and people continued to swallow his brilliant sleight of hand, that BP really was a new kind of oil company with a heightened sensitivity to environmental fragility.
In the end it wasn’t this confidence trick, nor BP’s laxity in safety, that got Browne fired by the board of BP in January 2007. It was the exposure of lies he had told about his arrangement with his boyfriend. The fact that he was gay was, of course, immaterial to his record as CEO. Bidding him farewell, John Sutherland, BP’s chairman, continued the personality cult: “John Browne is the greatest British businessman of his generation.”
Enter Tony Hayward, the chosen apprentice to the sorcerer.
It was probably not realistic to expect that Hayward, a geologist, inheriting the mantle of such a worshipped figure, would be able quickly to reverse the damage done to BP’s safety regime, nor that he would be able to insist upon the heightened safeguards needed when going into such high-risk areas as the deep water of the Gulf of Mexico. In companies that large, it can take a generation to alter the mind-set even if you set out seriously to do so. But Browne had done something even more permanently fatal to the corporate culture: Its executives believed that high-powered public relations will always prevail over truth.
The fact that almost-daily gaffes from CEO Hayward have continued, despite the hiring of Dick Cheney’s former aide Anne Womack Kolton as U.S. head of media relations and the spending of $50 million on image-massaging TV ads, is part of the company’s continuing failure to understand the depth of its offenses to both the people of the U.S. and the planet. They keep low-balling the estimates of the spill’s size and even now they are splitting hairs over when a plume is not a plume, even though, whatever you call it, scientists are sure there is something nasty floating down in the deep.
And when BP meets a really dogged and unyielding reporter like Anderson Cooper, they won’t talk to him. Every night, Cooper makes repeated offers to receive them, whatever the hour they choose, and every night they ignore him.
Incredibly, in Britain, they are only slowly waking up to the daily travesty that is BP’s handling of the crisis. And then only because the company lost nearly half its value on the London stock market. Indeed, British business leaders appear to resent the way BP is being treated in the U.S. Richard Lambert, the director-general of the Confederation of British Industries (and a former editor of the Financial Times), suggested to the FT that White House strategy (presumably including President Obama’s statement that he would have fired Hayward had he worked for him) was misplaced. “The U.S.” said Lambert, “has an interest in the welfare of BP, as much as the rest of the world does.”
This is as egregious case of “it’s happening over there” as I can recall. I wonder if Lambert and his body of aggrieved tycoons would feel as composed if, instead of the Gulf of Mexico, the torrent of oil and toxins was lapping the shores of Cornwall. Their idea of welfare and who needs it would be very different then, I suspect. Lambert should dip a foot into the Gulf of Mexico before putting it in his mouth.
Meanwhile, the Sun King, removed from his throne, has remained unflinchingly smug. This year, he published a memoir, Beyond Business, in which he conceded having made a few mistakes, including an ungrateful regret over having accepted the FT’s Sun King sobriquet. But since the book was promoted as “an inspirational memoir from a visionary leader,” any passages of modesty were buried in the atmosphere of mutual adoration between the author and his nation, where he seemed secure in the pantheon of empire builders. He told one FT columnist that during his reign at BP he had never lost a minute of sleep.
Only last week, amazingly, Browne was again enjoying renewed power. He was chosen by Britain’s new prime minister, David Cameron, to lead a team of businessmen who will scrutinize the performance of government departments—to “introduce ruthless business methods.” That’s a bit like appointing Bernie Madoff to head the SEC. Cameron was an early convert to Vicarious Tycoon Syndrome. Long before taking office, he declared that “politicians should take their lead from supermarket bosses.”