Why Did BP's Browne Resign?

In the September issue of Portfolio, Mimi Swartz has the definitive account of l'affaire John Browne. Swartz is no fan of Browne, the former CEO of BP, and accuses him of mismanagement, tight-fistedness, and an obsession with glossy corporate image over the gritty reality of the oil industry.

But Swartz also sees Browne's resignation as "a sacrificial act of love" for the company within which he lived almost his entire life.

In the end, Browne lied less to save his image than to save the image of his company. It’s notable, for instance, that there was no talk of resignation when word first emerged that the press had its hands on Chevalier’s story. Only after Browne learned that the corporate secrets could leak did he finally decide to step down.

And what were these corporate secrets which were so damaging?

The first was that BP, like many other companies, had set a value on human life in the event of a corporate disaster—in BP’s case, $20 million... The second revelation involved a possible relocation of the firm overseas, a move that would cost London a substantial number of jobs.

It's no secret that all multinational companies, especially those in the oil industry, are constantly thinking about where in the world it makes most sense to be based. Halliburton recently moved to Dubai, and although there's little chance of BP moving, it would have been irresponsible of a chief executive not to at least consider it.

But I really fail to see the shock value in the fact that BP put a value on human life; I'd be much more shocked if it didn't. Indeed, the $20 million figure seems quite generous to me, and it's much higher than the figure used for safety features on roads or cars.

So I'm not convinced that Browne resigned to save BP embarrassment from these far-from-revelatory revelations. In England, being caught lying to a court or to parliament is a very big deal indeed. Two high-profile Conservative MPs – Jeffrey Archer and Jonathan Aitken – even went to jail for it. Once Browne had admitted perjuring himself, he had to offer his resignation – and as Swartz details, the BP chairman, Peter Sutherland, was already minded to accept it in any event. Sutherland even went on the record as saying that allegations of impropriety at the corporate level were “unfounded or insubstantive.”

In other words, Browne resigned because the strictures of the closet led him to lie under oath – not because BP placed a $20 million value on human life. It was his sexuality which ultimately did him in, not his management style.