Unlike Americans, the British have never been too eager to elevate their corporate leaders to godlike status, and for quite some time, that was just fine with John Browne, most formally known as Baron Browne of Madingley. Just 59 years old when the trouble started, Browne was a slight, acutely polite man with an elfin grin who also happened to be one of the most powerful businesspeople on the planet. He had devoted 41 years to turning BP, a once fusty national institution, into the world’s second-largest oil company and its fourth-largest company, period. And though he enjoyed being known as the Sun King by his legions of admirers, Browne was content to live quietly, spending time at his homes in London, Cambridge, and Venice. “Before all this happened,” says Peter Wright, editor of the Mail on Sunday, a London paper, “if you’d asked the man on the street about Lord Browne, he wouldn’t have heard of him.”

But then Wright’s newspaper got involved, and the result was the biggest boardroom crisis in the history of one of the world’s most buttoned-down companies. A former prostitute named Jeff Chevalier, after first attempting to force Browne to pay him to disappear, decided to sell a tell-all about his four-year relationship with Browne to the press. The result was a tabloid frenzy in the first week of May, which promptly obliterated the image of Browne as a new-age oil exec, savvier and smarter and more worldly than his peers. Over the course of just a few days, Browne would be chastised by a British judge for lying about the affair and would resign in shame, walking away from the company he spent most of his life building.

While much has been written in Britain about the seedier side of the scandal, the critical role that BP and its executives played in it has been largely overlooked. Company officials, for instance, reportedly encouraged the C.E.O. to out himself on one of the BBC’s most popular radio shows, a plan that fizzled when Browne lost his nerve in the studio. Before that, BP leaders were secretly enlisted to serve on the board of Chevalier’s company, which was underwritten by Browne. And in the end, the disclosure of corporate secrets was as much a concern to Browne as the revelation of his homosexuality. The threat that internal BP matters might be leaked led Browne to lie in a court statement, which in turn led to his humiliating resignation and public shaming. Among the secrets Browne wanted to protect: He was considering relocating BP overseas—a potential economic ­disaster that would have been a huge blow to Britain’s corporate psyche—and he placed a dollar value on the heads of his workers in the event that they were injured or killed in an accident. In one memo, company executives gamed out different disaster scenarios for BP, comparing them to the outcomes in The Three Little Pigs.

At the time, the disclosures would have made an already awkward management transition at BP even tougher. Now the company is trying to right ­itself under a new C.E.O., Tony Hayward, who has taken over amid a growing outcry over BP’s shoddy environmental and safety record, which Browne managed to keep as secret as his private life. Browne’s legacy, in the meantime, is being reconsidered in light of evidence that BP’s growth during his tenure came more from cost cutting and acquisitions than from strong management. As the company sorts itself out, Browne’s multimillion-dollar severance package is being withheld, while the inevitable flurry of lawsuits—filed by shareholders over Browne’s resignation and workers’ families over a deadly 2005 plant explosion in Texas—continues.

What has emerged in the wake of Browne’s departure is a picture of an executive who had begun to believe his own spin. Browne saw himself as the embodiment of his company, and he banked on the idea that what is ­basically a very grimy and combustible business could run on gloss and glitz. In the end, of course, it couldn’t. As Browne’s life grew ever more glamorous and then cratered, BP was left to flounder: Profits tumbled and the stock price flatlined. It’s telling that Hayward, a 25-year BP executive, has had to spend his first few months at the helm reconnecting the C.E.O.’s office to the business of oil and gas.