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Bousso: The board of ROI-BP snatches victory from the jaws.

The abrupt ouster?of BP chairman Albert Manifold based on allegations of misconduct, less than eight month after he assumed office?throws the British energy company into its second scandal in leadership in less than three year. These repeated leadership failures indicate that BP's Board is?quickly turning into a liability.

Sources close to the board claim that his departure was due to 'aggressive conduct towards BP employees, which became public after a 'whistleblower report. Manifold was hired by the board to oversee the strategic transformation of the company and restore investor confidence after a disastrous venture into renewables in 2020 under the former CEO Bernard Looney, and Manifold’s predecessor Helge Lund. Looney was terminated in 2023 when it was discovered that he was having affairs with his colleagues. Lund departed after shareholder support plummeted.

Former head of construction company expected to bring hard-nosed business approach - and did so.

Manifold made his presence known immediately.

The first was a change in leadership. Auchincloss, who had joined BP two months earlier, was replaced in December by Meg O'Neill. She was an outsider, and the first female to head a major oil firm. In February, a few weeks before O’Neill's appointment, BP suspended their share buyback program, giving them the breathing space they needed to reduce their debt.

Investors viewed the two actions as proof that BP - and 'Manifold' - had clear intentions. The rise in oil prices following the'start of the Iran War' has further boosted BP. Its profits for the first three-month period of this year have more than doubled from a year ago, reaching $3.2 billion – the highest level since 2023.

BP today is in a much better position from an operational perspective than it was a couple of years ago. Manifold's sudden departure will not change BP's strategy or its executive leadership.

The board of directors will be the focus now.

DIFFICULT QUESTIONS

Manifold, who has only been at the company for a little over a year now, is still being questioned about the board culture. This was brought to light by Looney's abrupt departure and the strategic mistakes made by the firm. In recent months, Manifold restructured and trimmed the board and brought in oil and gas executives with experience to address these concerns. Manifold stated in March that the changes would allow for "faster decision-making and a sharper oversight, both of which will be critical to driving long term shareholder value."

Today, the words are hollow.

The board announced Manifold’s appointment in July after a "rigorous and comprehensive global search."

Amanda Blanc, a senior independent director on the board at the time, said that Albert's relentless focus is well-suited to the needs of bp now and in the future.

In BP’s statement of Tuesday,?Blanc acknowledged that Manifold helped bring "a welcomed focus" to BP’s transformation. However, he said the board was "surprised" and "disappointed" to hear about?Manifold’s "governance and conduct issues which it deems acceptable and has taken definite action."

BP's shareholders and staff are right to ask questions about prior due diligence, and any assurances regarding the selection process for the future chair and other senior appointments.

BP is transforming its culture and strategy. Unreliable boards could make an already difficult challenge near impossible.

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(source: Reuters)