BP Chairman’s Shock Sacking Sparks Turmoil and Billions in Losses
The City’s typically serene summer was dramatically disrupted last week with the public dismissal of Albert Manifold, the chairman of energy giant BP. The move, which caught the financial district and seemingly Manifold himself completely off guard, has sent shockwaves through the market, wiping billions off BP’s share price and raising concerns about the company’s stability during a critical period of transformation.
This abrupt departure marks the fourth high-profile executive exit at BP in under three years, fueling anxieties that the esteemed British firm could be derailed at a pivotal moment in its strategic turnaround.
A Secure Position, Suddenly Undone
Just days before his sacking, Albert Manifold appeared to be in a secure position. Since assuming the chairmanship last October, BP’s share value had seen a notable increase of over 20 per cent. This growth was largely attributed to the company’s strategic pivot back towards its core oil and gas production, a decisive shift away from a previous, less successful, foray into green energy initiatives. The successful integration of Meg O’Neill, a seasoned US energy executive, as BP’s chief executive last month further cemented the impression that the company’s restructuring was nearing completion.
Therefore, the announcement on Tuesday that Manifold, 63, had been “removed” due to “serious concerns” about his conduct, which had “surprised and disappointed” the board, blindsided many observers. The immediate aftermath saw BP’s share price plummet, failing to recover throughout the week and leaving investors, including numerous small shareholders and pension funds, facing substantial losses estimated at £4.6 billion.
Allegations of Aggression and Bullying Emerge
Following the initial announcement, reports began to surface detailing accusations against Manifold. He was reportedly described as “aggressive” and a “bully” towards both junior and senior staff. Whispers of him being “shouty” and dismissive of colleagues circulated, prompting the board, through its senior independent director Amanda Blanc, to take what was described as “decisive action.”
Manifold’s Fierce Retaliation and Legal Threats
However, Manifold’s unceremonious dismissal ignited a fierce public dispute. He swiftly countered BP’s claims, asserting on Wednesday that he had been sacked “without warning and without explanation.” This strong reaction fuelled speculation that Manifold was preparing to take legal action against BP, potentially to contest any severance package that might be withheld. The businessman is reportedly exploring his legal avenues and has engaged the services of the well-regarded City law firm Mishcon de Reya.
Escalating his public stance on Thursday, Manifold issued a lengthy 773-word statement vehemently denying any wrongdoing. He declared that “at no point” during his eight months at BP had any concerns about his conduct been raised. He expressed his dismay at what he perceived as falsehoods being spread about him, stating, “What I do not accept is that lies can be told about me, nor that anyone should be allowed to hide behind anonymity when commenting on my time at BP.”
Furthermore, Manifold directed sharp criticism at what he termed a “culture of entitlement” within BP. He claimed to have deliberately eschewed certain perks of his position, such as chauffeur-driven limousines, private jets, and premium tickets to events like Wimbledon. His intention, he explained, was to “set an example” as the company underwent streamlining and significant staff layoffs to reduce costs.
Counterclaims of a Boardroom Coup and Questionable Spending
Sources close to Manifold, however, suggested that his cost-cutting initiatives were not universally embraced by some senior BP staff. One source implied that his ousting was part of a boardroom manoeuvre orchestrated by Amanda Blanc, the chief executive of insurer Aviva and a prominent figure in the City. BP, for its part, has denied these allegations.
Manifold also reportedly experienced friction with BP company secretary Ben Mathews, who is understood to have been instrumental in advocating for his dismissal. However, Manifold’s public ire appears to be primarily directed at BP’s non-executive directors rather than the operational management team.
Adding another layer to the controversy, Manifold’s claims of leading a crusade against wasteful spending were called into question when it emerged he had stayed 13 times at the upscale Haymarket Hotel, where rooms typically cost around £480 per night. A spokesperson for Manifold defended these stays, explaining that the hotel was chosen for its proximity to BP’s London headquarters and noting, “It is not Claridge’s. It is not the Ritz.”
Shared Blame and a History of Instability
Those with insight into BP’s operations and Manifold’s leadership style suggest that blame may be shared between both parties. Manifold might have approached his task with excessive zeal, while BP could have opted for a more private discussion of concerns rather than resorting to a surprise dismissal.
Questions also linger regarding Amanda Blanc’s decision to appoint Manifold in the first place. Concerns have been raised about the thoroughness of BP’s headhunting process, potentially leading to an avoidable misstep for a company already grappling with a history of abrupt executive departures. This includes the ousting of Bernard Looney as chief executive less than three years ago for failing to disclose past relationships with staff, followed by Helge Lund, Manifold’s predecessor. Even Looney’s successor, Murray Auchincloss, departed the firm late last year.
While BP might find some solace in the fact that a segment of its investor base did not fully embrace Manifold’s management style, many others are likely to be disheartened. The company, which appeared to be moving past years of instability, now seems poised to re-enter a period of turmoil, particularly concerning during one of the most significant global energy crises in history.
The ongoing conflict shows little sign of abating. Industry insiders suggest Manifold has strong grounds for legal action, with one commenting that BP’s actions have “damaged his reputation and given him no opportunity to respond. What it did was extremely inept.”
