Why Did BP’s Browne Resign?

In the September issue of Portfolio, Mimi Swartz has the definitive

account of l’affaire John Browne. Swartz is no fan of Browne,

the former CEO of BP, and accuses him of mismanagement, tight-fistedness, and

an obsession with glossy corporate image over the gritty reality of the oil


But Swartz also sees Browne’s resignation as "a sacrificial act of love"

for the company within which he lived almost his entire life.

In the end, Browne lied less to save his image than to save the image of

his company. It’s notable, for instance, that there was no talk of resignation

when word first emerged that the press had its hands on Chevalier’s

story. Only after Browne learned that the corporate secrets could leak did

he finally decide to step down.

And what were these corporate secrets which were so damaging?

The first was that BP, like many other companies, had set a value on human

life in the event of a corporate disaster—in BP’s case, $20 million…

The second revelation involved a possible relocation of the firm overseas,

a move that would cost London a substantial number of jobs.

It’s no secret that all multinational companies, especially those in the oil

industry, are constantly thinking about where in the world it makes most sense

to be based. Halliburton recently moved to Dubai, and although there’s little

chance of BP moving, it would have been irresponsible of a chief executive not

to at least consider it.

But I really fail to see the shock value in the fact that BP put a

value on human life; I’d be much more shocked if it didn’t. Indeed,

the $20 million figure seems quite generous to me, and it’s much higher than

the figure used for safety features on roads or cars.

So I’m not convinced that Browne resigned to save BP embarrassment from these

far-from-revelatory revelations. In England, being caught lying to a court or

to parliament is a very big deal indeed. Two high-profile Conservative MPs –

Jeffrey Archer and Jonathan Aitken

even went to jail for it. Once Browne had admitted perjuring himself, he had

to offer his resignation – and as Swartz details, the BP chairman, Peter

Sutherland, was already minded to accept it in any event. Sutherland

even went on

the record as saying that allegations of impropriety at the corporate level

were “unfounded or insubstantive.”

In other words, Browne resigned because the strictures of the closet led him

to lie under oath – not because BP placed a $20 million value on human

life. It was his sexuality which ultimately did him in, not his management style.

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