ETHIC AND GOVERNANCE

Ethic and Governance

Ethic and Governance

Task 1

Under the last days of Lord John Browne, BP lost its moral compass; it became a little too arrogant and big for its boots.

They allowed their marketers to go just a step too far and when they changed their name from British Petroleum to Beyond Petroleum. People just did not believe them; their green credentials simply did not stack up. The culture meant that people on the inside were too scared to speak out whilst the business' values moved further and further away from those of their customers(www.bp.com).

In short, nobody knew what BP stood for anymore. When Tony Hayward took over he put BP back on the path they used to tread and went back to where they came from. He positioned the business to take advantage of its strengths and made no hiding of the fact that BP is a petroleum company. Investment in new technology such as wind farms and solar energy was no longer seen as proof of BP's green credentials but as a necessary eye on the future to ensure its survival and competitiveness. Behind the scenes and BP is inexorably returning to an "academy" business once more(www.bp.com).

Safety, people and performance, and these remain their priorities. Their number one priority was to do everything possible to achieve safe, compliant and reliable operations.

Good policies and processes are essential but, ultimately, safety is about how people think and act. That's critical at the front line but it is also true for the entire group. Safety must inform every decision and every action. The BP operating management system (OMS) turns the principle of safe and reliable operations into reality by governing how every BP project, site, operation and facility is managed(www.tt.com).

Their work on safety has been acknowledged inside and outside the group. For instance, the board's independent expert, L Duane Wilson, continues to report on their progress in implementing the improvements recommended by the BP US Refineries Independent Safety Review Panel and identify areas that need more focused attention. Their most recent employee survey indicated employees are also seeing the results of their work to enhance safety. Clearly, there is more to do and safety remains at the front of their minds. Beyond safety, they are also committed to high ethical standards and legal compliance in all aspects of their business. They have continued to enhance and improve compliance programs in areas such as their integrated supply and trading function.

In last year's Annual Review I described the forward agenda they were pursuing to close the competitive gap by making BP a simpler and more efficient organization. Throughout 2008 they maintained their focus on reducing cost and complexity, and embedding a strong performance culture throughout the group. They achieved success on both counts. Layers of management have been removed, there is accountability for performance at all levels and they have created a strong focus on leadership behaviours. Hayward described the forward agenda as a way of simplifying BP and fundamentally changing the company culture ...