As Day 52 passes in the aftermath of the nation’s worst-ever environmental crisis, it’s time to reflect on how leadership failures like this can spiral into full-blown disasters.
This piece won’t attempt to summarize the event in detail, as countless others have already done that. Nor will it place blame on individuals, demand heads to roll, or chase down endless investigations. Instead, we’ll ask a few simple questions and attempt to offer a deeper perspective on what’s gone wrong, based on known facts and insights from people who work closely with corporate boards—not just academics in think tanks.
Where Was BP’s Board When the Crisis First Happened?
First, let’s be clear: BP’s crisis response is just as revealing as the crisis itself. When evaluating how a company handles a crisis, it’s often less about the event and more about what happens after. For instance, Three Mile Island remains the worst domestic non-response case, where phones went unanswered for days. On the flip side, Tylenol’s response to its 1982 crisis is often hailed as one of the most effective.
So, where does BP’s crisis management fit in? While the outcome is still to be determined, one glaring question remains: Where was the BP board when the explosion happened? Looking at BP’s communications since April 20th, at least 50 press releases have been issued. Yet, aside from a joint statement from the Chairman and CEO on June 4th, no official board position has emerged. It’s unclear how many board meetings were held or what discussions took place behind closed doors, and BP is unwilling to confirm details.
This is typical behavior for many boards—speaking as one voice through the CEO, meeting quarterly, and addressing crises as needed. However, the BP situation is far from typical. The reality is that if the board had taken a more proactive stance from the start, especially by questioning management’s initial actions, they could have reduced the leadership criticism the company faces now.
The Governance Failures: A Look Back
The BP board, like many corporate boards in crises, appears to be sleepwalking through this disaster. The situation is reminiscent of what happened at Lehman Brothers and Merrill Lynch during the 1998 market collapse—where board members failed to ask hard questions or, if they did, failed to speak up publicly. Instead, these boards watched as their companies’ reputations and value crumbled. It’s the same pattern: lawyers and consultants manage board members’ personal interests as closely as they manage their corporate affairs.
In BP’s case, even if CEO Tony Hayward were a saint, the governance system that got us here is broken. Replacing him now won’t fix anything without full transparency. The damage to BP’s reputation and a third of its equity value can’t be undone with a simple change in leadership. The real issue is the system of governance that allowed this crisis to escalate in the first place.
Reputation and the Amnesia of Corporate Governance
It’s ironic that while most Fortune 500 board members say that reputation is a top priority, when things go wrong, they seem to forget their own rhetoric. This isn’t just a BP issue—it’s a broader governance failure in corporate America. During crises, companies too often shift to defensive posturing and blame games rather than genuine problem-solving.
In BP’s case, the situation has only gotten worse: As rescue workers scrub oil off pelicans, tourism officials scramble to reassure potential visitors, and the oil keeps gushing, there’s a glaring absence of proactive leadership from the board.
Where Are BP’s Competitors?
At this point, ExxonMobil, Texaco, and Chevron should be looking at BP not as a competitor, but as a fellow industry player facing a crisis. These companies need to recognize that public opinion will never swing in their favor again, no matter what they do. BP’s crisis is now everyone’s crisis, and the industry as a whole stands to lose a generation of trust.
The real problem here isn’t just BP’s corporate leadership; it’s the systemic mismanagement of enterprise-wide risk, a key board competency that BP—and many others—are failing to address.
Final Thoughts: A Call for Change
Reputation can vanish overnight, but it’s usually the result of a slow build-up of leadership incompetency. There’s often a raft of capable individuals who could step forward, demand better, and make meaningful changes. But corporate governance systems remain mired in outdated, group-think behavior that only exacerbates crises.
A simple solution? Maybe BP could start by offering free gas to the Gulf’s fishermen. It’s not a grand strategy, but as a wise friend once suggested, it’s common sensical. In the end, it’s a small step that might show the world that BP is trying to make amends in some small but tangible way.