BP CEO Resigns Over Failure to Disclose Personal Relationships With Staff
Key takeaways
- BP’s CEO has resigned over non-disclosure of personal relationships with colleagues
- The oil and gas company has opened a second investigation over the incident
- BP’s share price was down 1.3% at Wednesday’s trading close
BP’s CEO has suffered a spectacular fall from grace this week, immediately resigning from the position after it was found he’d been less-than-truthful about disclosing past relationships with colleagues. A temporary CEO has been installed, but Looney has been in the job for less than four years.
The sudden black hole in leadership is a risk for BP’s share price but also presents BP’s board with an opportunity to find someone for the top position that could help match the stock growth pace with its U.S. rivals. Here’s everything you need to know about the CEO drama and what could happen next.
What’s happening at BP?
BP CEO, Bernard Looney, BP’s CEO, Bernard Looney, has resigned from the top job at the oil and gas giant after he admitted he hadn’t shared all of the details about “historical relationships with colleagues”. CFO Murray Auchincloss will act as CEO on an interim basis.
Allegations about personal relationships surfaced last year, with BP launching an investigation soon after. In May 2022, it concluded that no breach of the company’s code of conduct was found after Looney disclosed “a small number of historical relationships with colleagues prior to becoming CEO”.
But that wasn’t enough to quell the rumors, and BP had to open another investigation after more allegations were received. It was then found that Looney hadn’t been entirely as truthful as he’d made out to be — and he needed to resign as CEO immediately.
“Mr Looney has today informed the Company that he now accepts that he was not fully transparent in his previous disclosures,” said the BP statement. “He did not provide details of all relationships and accepts he was obligated to make more complete disclosure.”
What was the stock market reaction?
After the news of the abrupt exit, BP’s New York share price ended Wednesday trading 1.3% lower, while the company’s London stock dropped 2.8%.
The drama leaves BP in a vulnerable position but also presents an opportunity. The company’s share price had risen 7% under Looney’s leadership since he took up the mantle in 2020, but U.S. rivals have streaked ahead. Exxon’s stock has climbed 51%, and Exxon has increased by a massive 87% in the same period.
Why? Looney focused on renewable energy, whereas U.S. rivals like Exxon and Chevron doubled down on oil and gas. That bargain paid off when energy prices skyrocketed in the aftermath of the Ukraine-Russia conflict.
It’s therefore possible that BP will use this opportunity to focus back on oil and gas, with a new CEO driving the agenda to capitalize on stock market gains.
The bottom line
BP has embroiled itself in an unsavory business. Investors don’t like surprises, especially when it comes to CEOs suddenly resigning, but the potential for BP to install a new CEO that favors oil and gas over renewables is an option for the board to consider. Whatever the outcome, Wall Street will want to see a replacement on the cards — and soon.
