Another entry into the category of PR and public perception not quite equalling actual performance.
WSJ.com - BP's Accidents Put Its Celebrated CEO On the Hot Seat : For years, John Browne has been lionized for turning BP PLC into an oil powerhouse while embracing the green movement years before it was cool in the executive suite. Business groups showered him with management awards; Vanity Fair featured him in its recent environmental issue alongside such green darlings as Al Gore and Julia Roberts.Now, though, a different group of image makers is taking aim at BP and its cigar-puffing, opera fan of a chief executive: American regulators and activist investors who say BP isn't living up to its environmental and safety promises.
An investigative agency looking into a deadly blast at a BP refinery in Texas last year is considering questioning Lord Browne in its probe of the accident. Federal officials in Alaska have opened a criminal investigation related to a BP oil spill at Prudhoe Bay, and a top Labor Department official lashed out recently at the company after inspectors found serious safety problems at another refinery in Ohio.Meanwhile, so-called socially responsible investors -- a growing group who makes investment decisions by gauging a company's track record on everything from environmental to social issues, like inclusive hiring -- are starting to ask tough questions of a chief executive officer they have long admired.
“Is this a systemic problem or a series of one-offs? The jury is still out,” says Robert Barrington, London-based director of governance and socially responsible investments at F&C Asset Management PLC, which has about £112 billion ($206 billion) under management.
..
But perhaps as important for a company that packages itself as “Beyond Petroleum,” BP's corporate reputation -- and Lord Browne's personal one -- is taking a hit. The bashing comes as Big Oil finds itself under attack from politicians in Washington and Europe over high oil prices....Lord Browne, who won a peerage from Queen Elizabeth II, has taken a personal rap on the knuckles as well. At its annual shareholder meeting earlier this year, Peter Sutherland, BP's nonexecutive chairman, said the board fully backed Lord Browne. But the compensation committee, made up of independent directors, doled out a smaller bonus for 2005 compared with the year before, partly because of the problems. Lord Browne took home a pay package valued at £6.5 million, 14% more than in 2004. But his bonus was reduced to £1.8 million from £2.3 million.
...Meanwhile, Don Holmstrom, an investigator for the U.S. Chemical Safety and Hazard Investigation Board, says he doesn't rule out calling in Lord Browne for questioning in his continuing Texas City review. Mr. Holmstrom says that because the refinery had a history of accidents before the explosion, “we want to know specifically what was done, what was put into place, what action was taken” on the corporate level to improve safety beforehand.
A federal agency that probes chemical-industry accidents, the board doesn't have the power to levy fines. It typically delves into the technical causes of accidents, so an interview with Lord Browne would be unusual. Still, Mr. Holmstrom says he has already interviewed other corporate brass and has yet to decide about Lord Browne.
Tags: Business, /Energy, /environment
