'Tony Hayward is about to get his life back'

Oil spill victims find an outlet for anger about the crisis and resentment toward BP.

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By Jena McGregor
Monday, July 26, 2010; 11:37 AM

Tony Hayward is about to get his life back. According to multiple news reports, the embattled CEO is expected to step down after the board discusses and approves his exit in a meeting today. One of the biggest questions many will be asking: What took them so long?

After all, Hayward's departure has been practically inevitable for weeks now. First, of course, there was his seemingly unrivaled propensity, at least among corporate CEOs, for public relations gaffes. His comment that "I would like my life back" and his logic that the Gulf of Mexico's large size meant the spill was "relatively tiny" were nearly insurmountable amidst the politically charged atmosphere.

(Photos of oil spill cleanup and containment efforts)

Then, there was the overwhelming evidence that BP's safety culture left plenty to be desired. An academic advisory panel of scientists concluded earlier this month that the spill could be attributed to "an organizational culture and incentives that encourage cost-cutting and cutting of corners -- that reward workers for doing it faster and cheaper, but not better."

No matter, it seems, that this profit-at-whatever-cost culture was initially fostered under Hayward's predecessor, Lord John Browne, or that Hayward had vowed to reverse it. He had made inroads since he ascended to the CEO job in 2007 and earned the respect of analysts, who cheered his turnaround in progress. Still, BP continued to be fined for safety violations, including, in 2009, receiving more than 700 violations at its Texas City refinery that exploded in 2005 and led to a record $87.4 million in proposed fines.

In the end, three years may not be enough time to turn around the company's culture, but it is enough time, rightly or wrongly, to be blamed for it. That's especially the case for Hayward, who was hardly an outsider to Browne's culture. Rather, he was head of the company's exploration and drilling efforts before succeeding Browne, and therefore presumably played a big role in it.

(BP's next CEO: The joy of filling Tony Hayward's shoes)

Hayward's successor will be taking on troubles of extraordinary magnitude. On top of the billions of dollars in clean-up costs and claims to pay, there are asset sales and potential takeover bids to fend off. Long before the most recent public relations problems surfaced--BP has now come under fire for doctoring pictures of its command center--the board was under pressure to take some kind of action.

It had an opportunity to hit the reset button on BP's leadership more than a month ago, when it named Robert Dudley, the BP managing director who is expected to replace Hayward, to run its Gulf clean-up operations. Rather than simply starting fresh, the move made BP's CEO seem even further removed from the company's biggest and most important problem.

One argument goes that BP's board was waiting until the well was mostly contained to name the CEO for the future, so as not to associate the new chief with the current disaster's stigma. Given that repairing BP's reputation will be the biggest of all of Dudley's many challenges, making sure he doesn't start before the well was capped allows him to rebuild from the beginning rather than start with more repairs.

Still, waiting as long as the board did may have had the opposite, and unintended, effect. Every week that went by without action at the top may have only served to dig the hole deeper for Hayward's inevitable successor. He may start with a clean slate, but at what cost?

(How oil-damaged marsh grasses recover could affect gulf's rebound)


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