BP unexpectedly dismissed chairman Albert Manifold on Tuesday, citing “serious concerns” related to governance and oversight issues, which led to a decline in shares and increased uncertainty for the oil company.
Manifold had held the chair position for only eight months before the board unanimously decided he should be removed. In a statement, BP remarked, “This action follows serious concerns raised to the board regarding key governance standards,” but did not elaborate further.
The abrupt firing left investors rattled. BP’s shares dropped nearly 10% during trading in London, causing a temporary halt, although they later regained some losses. Comparatively, the broader energy sector in Europe fell by less than 1%.
The situation arises at a crucial time for BP, which has been grappling with dwindling investor confidence, falling stock prices, and questions surrounding its future strategy.
Manifold, who was appointed last October, was supposed to lead the company through its transition to increased oil and gas production. This shift came after years of advocating for renewable energy and climate change initiatives, which left some shareholders dissatisfied.
Interestingly, he had no background in the energy sector, but was endorsed by activist hedge fund Elliott Management, which owns about 5% of BP’s stock and has been pushing for improved financial results. He was also instrumental in the selection of Meg O’Neill as BP’s current CEO.
BP has been marked by instability in its leadership recently. Former CEO Bernard Looney was removed in early 2023 after admitting to misleading the board about his relationships with staff. His successor, Murray Auchincloss, retired unexpectedly in December.
This ongoing leadership upheaval has sparked speculation that BP might eventually become a target for takeover or face pressures that could lead to bankruptcy.
Moreover, this latest boardroom upheaval is occurring as major oil companies shift their focus towards enhancing shareholder returns and fossil fuel output, rather than investing heavily in expensive green energy initiatives, amid investor call for higher profits.
