Tony Hayward Out At BP: Will It Matter?
Nearly 100 days after the Deepwater Horizon explosion and oil spill (April 20th, to be exact), BP will likely replace its PR-challenged CEO Tony Hayward. (My favorite of his gaffes was: "There's no one who wants this thing over more than I do, I'd like my life back.")
The company just posted this denial of the change, but it stands to reason that Hayward probably should have been axed a while ago. Will Hayward's ouster matter? The short answer is YES.
The company must move into the post-spill era with a new tone from the top. Of course Hayward wasn't the sole cause of the disaster, but he is the embodment of it. In many ways, it's reminiscent of some Wall Street executives--Merrill Lynch's Stan O'Neal or Bank of America's Ken Lewis come to mind. While the Board of Directors and senior management of every embattled company is responsible for the steering the company through a crisis, only the CEO can take the fall.
It's expected that Managing Director Robert Dudley will replace Hayward as CEO and the announcement will likely come when the company releases its earnings tomorrow. If so, Dudley would be the first American to run the company. Currently, Dudley, is charged with managing the company's cleanup in the Gulf and more importantly, to repair the firm's shaky reputation. Dudley ran Amoco Corp.'s Russian operations from 1994 to 1997, before its 1998 acquisition by BP.
From the individual investor's perspective, the lessons from BP are clear. Now we have a management lesson to boot: when a crisis emerges, the CEO must articulate the facts clearly; accept responsibility on behalf of the company; and provide solutions for how the company plans to address the crisis. Hayward failed on all three, which is why he should lose his job.
Image by Flickr User Deepwater Horizon Response, CC 2.0