BP, one of the world's leading oil giants, is exploring the possibility of appointing an external candidate as its next Chief Executive Officer (CEO).
This revelation comes in the wake of the abrupt departure of Bernard Looney, who had led the company since February 2020.
BP's decision to potentially hire an outsider for the top leadership role marks a departure from its longstanding tradition of promoting CEOs from within its ranks. The company has not brought an external candidate into its top executive position for at least three decades.
The announcement was made by BP Chairman, Helge Lund, who also did not provide a specific timeline for the search for a permanent CEO.
Currently, BP's Chief Financial Officer, Murray Auchincloss, is serving as interim CEO, a role he assumed in the wake of Looney's sudden departure.
Lund emphasised that Looney's exit was prompted by his acknowledgment of not being "fully transparent in his previous disclosures." She stated that Looney "accepts he was obligated to make more complete disclosure."
These revelations have raised questions about BP's governance, with industry insiders claiming that concerns about Looney's workplace relationships were well-known before he took over as CEO.
BP's nomination committee had previously identified Looney as the best-suited candidate for the role in a ‘thorough and transparent process’, as stated in the company's 2019 annual report.
The committee also conducted a review of the executive succession pipeline, considering factors such as the process, emerging talent, and key-person risks.
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This marks the third time in recent years that BP has seen an abrupt departure of its CEO.
John Browne left the company in 2007 after it was revealed that he had lied to a court about his relationship with another man.
His successor, Tony Hayward, stepped down three years later following the Deepwater Horizon oil rig explosion and environmental disaster.
Only Bob Dudley, who preceded Looney, retired from the company without controversy.
While the appointment of Auchincloss as interim CEO suggests a level of continuity in BP's strategy, industry experts believe that the possibility of an external hire cannot be ruled out.
Giacomo Romeo, an oil industry equities analyst, stated, "An external hire, while not traditionally an option chosen by BP, can't be ruled out."
Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown, emphasised the need for a swift decision, saying, "A clear path forward needs to be forged sooner rather than later to limit negative sentiment."