Friday, 18 June 2010

BP CEO is a liability

Yesterday Tony Hayward, CEO of BP, testified before a Congressional committee, and it was a most uninspiring sight to behold.

Tony Hayward: Out of his depth

Clearly the BP CEO doesn't understand American PR and he hasn't bothered to take advice. The august congressmen were rightly angry. BP has threatened their gulf coastline with the world's largest ever oil spill and they wanted answers, and contrition, and believable assurances that it would never happen again. Instead they got stonewalled. Hayward played a dead bat. He admitted nothing, he explained nothing, he just claimed that investigations were ongoing. He completely failed to understand that he was there to account for his company. Congressmen are representatives of the American people, and the people are entitled to an explanation.

The spill is now two months old. Hayward should have some answers by now. Even if he had to qualify his statements as provisional he should know how the accident happened and be prepared to explain.

Instead, looking a picture of misery, he crawled into a corner and gave nothing. How such an inadequate individual ever got be CEO of a large company is a complete mystery.

Not only did Hayward fail to prevent to accident in the first place, he has also compounded BP's problems after the accident. US law [Oil Pollution Act, 1990] limited BP's liability to $75 million. Hayward went to see the US president and actually signed a document accepting unlimited liability! The chances are he has voided any insurance policies the company might have, and BP shareholders will certainly sue to recover money they didn't have to pay out.

He also failed to rope in the CEOs of the other responsible corporations. When summoned to see the president he should have taken the CEOs of Transocean, Haliburton, Anadarko and Matsui, and if they were reluctant to visit the White House he should have told them not to expect any business from BP ever again.

Hayward should have played the PR game properly. He should have provided a proper explanation, shown proper contrition to the Congressmen and media, but never should he have done anything to queer BP's legal position. He may have bankrupted the company by his actions after the accident.


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