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By Newsweek Editors
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It would be tempting to attribute the fall of Lord John Browne, who resigned this week from British oil firm BP after 41 years, the last 11 as chief executive, to a lack of acceptance of gay men in the European boardroom. Browne had kept his homosexuality under wraps until a 27-year-old former male escort outed him after a four-year-long affair. Browne sought an injunction to quash the story from a British tabloid, but a High Court judge on Tuesday ruled against him and found that Browne had lied to the court about how the men met each other.
The sex-and-lies scandal was merely the final straw, however. Both inside the company and out, concerns have been mounting about Browne's aptitude as a leader for the last two years, ever since the explosion of BP's Texas City oil refinery, which killed 15 employees in 2005. The proof is in the stock price. As soon as Browne handed the reigns to Tony Hayward, who has been the de facto leader of BP since the annual general meeting last month, BP shares edged upward from $67 on Tuesday before the announcement to just under $69 on Thursday's close. Analysts say that Browne's exit bodes well for BP in the immediate future, even as it struggles with falling oil prices and rising production costs.
Browne's legacy to the company he spent his life building will be a management style against which his successor can clearly define himself. Under Browne, BP had a reputation for having an all-powerful celebrity chief executive. According to company employees quoted in former U.S. secretary of State James Baker's damning report on the Texas City explosion, BP under Browne habitually put "profit before safety." Hayward, by contrast, seems to have a more egalitarian management style. "The top of the organization doesn't listen hard enough to what the bottom of the organization is saying," wrote Hayward last December on BP's internal Web site. Many analysts interpret the statement as a direct criticism of Browne. "Hayward wants to make sure all the employees at the company feel free to voice their opinions, and he wants those opinions to be heard [by management]," says one company insider who did not wish to be quoted talking about BP. "Some people might say that this is very different from the atmosphere under Browne."
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Hayward is also adopting a lower profile at BP than his predecessor. He says he'll only speak publicly on the company's performance twice a year--half as often as Browne did. Hayward is also expected to avoid the high-profile political circles in which Browne, who was made a life peer ("Lord") by Prime Minister Tony Blair in 2001, was so comfortable. Browne and Blair were so close that political analysts attribute the importance Blair put on improving relations with Russia down to Browne's influence. BP, goes the joke, actually stands for "Blair Petroleum."
Of course, Browne has long been considered one of Britain's most respected business leaders. His role in transforming BP from a relatively small European oil firm into one of the biggest power companies in the world stands as a remarkable achievement. Had Browne retired two years ago, his exit would probably have been accompanied by laudatory talk about his place among the best business leaders of his generation. In recent years, however, Browne made a number of risky decisions--both personally and professionally--that ultimately resulted in his downfall. Within the industry, Browne was known for cutting safety dangerously close to the wire. As BP and other oil companies were driven to look for oil in more dangerous places, Browne was known for keeping a tight rein on safety spending. The results were dire, and included the partial shutdown of one of the company's Alaskan oil fields due to corrosion on pipes, and the deadly Texas explosion.
Browne took his big personal gamble in 2002, when he went on a gay escort Web site, Suited and Booted, and struck up an affair with a young Canadian student, Jeff Chevalier, which lasted for four years. After an acrimonious break-up early last year, Chevalier asked Browne for $600,000 to help him adjust from the multimillionaire lifestyle to which he'd become accustomed. Browne refused, and Chevalier sold his story to the British tabloid newspaper, The Mail on Sunday. Browne, who has never been public about his sexual orientation, tried to stop the story from going to press by filing an injunction on the basis that Chevalier's claims were a breach of privacy and confidence.
Browne lost his suit earlier this week. Much more damningly, however, the courts revealed that Browne lied to them. He told the High Court on three separate occasions that he had met Chevalier while exercising in a park rather than on the Web site. Browne asked the court to "prefer his [own] account of what took place" over Chevalier's (truthful) narrative because his "various honors" showed him to be of very high standing in the community. Even worse, Browne attempted to "trash" Chevalier's reputation by accusing him in court of being a drug user and an alcoholic. Ultimately, Browne has forced to admit to the court that he had lied about having met in a park.
How many other people are there who, like Browne, work in Europe's top corporations and are desperate to keep their sexual orientation a secret from the public eye? It's difficult to know. Secrecy is the rule among gays in high-level businesses. In Britain, there isn't a single openly gay person running a FTSE 100 company. In a recent survey by Stonewall, a gay lobbying group, of the country's top 100 most influential gay men and lesbians, only three CEOs were willing to have their names published. And what would have happened had Browne, rather than lie in court about the affair, openly admitted to meeting Chevalier on a Web site? We'll never know.
The tragedy is that after four decades of exemplary service, Browne's final gift to his company has turned out to be his own departure.
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