Let’s get this straight first. I don’t know any personal secrets about Bernard Looney, and in an ideal world none of us would want to know.
The BP chief executive resigned this week after admitting he failed to fully disclose past relationships with colleagues. His resignation comes after the oil company received the second anonymous complaint about Rooney in the past two years.
His departure comes as turnover at the top levels of the world’s largest companies has exceeded 10% for the second year in a row. In the UK, 18 FTSE 100 companies will have new chief executives this year. That’s already the second-highest total since 2000 – with three months left to go.
Much of the change has been planned, but since the #MeToo protests over workplace harassment erupted in the late 2010s, individual behavior has played a greater role in forced departures. The first wave of firings stemming from the movement stemmed from serial rape or molestation accusations against Harvey Weinstein, Roger Ailes and others, but it also swept away alleged prosecutors such as Intel’s Brian Krzanich Leaders who have consensual relationships.
There are other tips for rethinking how companies approach workplace behavior. The pandemic also plays a role as more younger workers now advocate for greater alignment of personal and professional beliefs.
Many employers now have stricter rules about everything from sexual relationships to teasing and bullying, often extending to incidents outside the workplace. This shift recognizes the fact that poorly managed workplace relationships, whether sexual or non-sexual, can create a culture of favoritism that silences people and reduces productivity.
This goes all the way to the top. Fully half of CEOs at the 3,000 largest U.S. companies were forced out last year due to personal misconduct, up from 14% in 2017, according to The Conference Board.
This shift raises some concerns. “How much should your employer get involved in and control your personal life?” asks Alison Taylor, a professor at New York University who studies business ethics. “We’ve tolerated (bad behavior) for years, but corrective action creates a lot of problems.”
This week, two senior executives in different industries reached out to me to express their belief that Looney’s ouster was due to a new wave of Anglo-American puritanism that one day we will regret. They said a talented chief executive who has positioned BP as a leader in the energy transition should not be distracted by an active personal life.
This misses the point. Looney lost his job not because of sex, but because of lies. The investigation that prompted his departure marked at least the third time the company had spoken to him about relationships at work. Investors told the Financial Times that the topic was raised when he was appointed in 2019.
The first investigation was launched last year following a complaint. The board concluded that the CEO, who had spent his entire career with the oil group and was almost always single, had not violated company policy. Without knowing the details, it’s hard to tell whether this is the right decision. But BP’s board did a smart thing: It asked Rooney to provide written formal assurances that there would be no further relationships or other matters that would require him to disclose.
When another complaint came in with new details, Looney was lost in thought. The board has made it clear that this is a matter of trust and there will be no next time. “He acknowledges that his previous disclosures were not fully transparent,” the company said in a statement announcing his departure.
It’s hard to understand why anyone would sign a statement promising that everything has been revealed, only to have it quickly be called into question. But Rooney is not the first CEO to try the limited disclosure route. In 2019, McDonald’s CEO Steve Easterbrook walked away with a severance package worth up to $40 million after acknowledging a “recent consensual relationship” and calling for privacy.
A year later, the fast-food chain sued its former CEO, claiming he had three more sexual relationships and that he lied to the board about deleting explicit images from his work phone and approving the release of a video to one of the people involved Shares granted. He agreed to return more than $105 million in cash and stock and pay regulatory penalties for lying to investors.
Perhaps the nature of a CEO’s job makes it easy for some people to have magical ideas about what they have the power to do as well as what they can do. Driven and surrounded by those who follow their own judgment, it’s easy to start to believe that ordinary rules don’t apply.
“Good decision-making is a social activity, but the system deifies the CEO and aims to stifle dissent,” says corporate philosopher Roger Steare. He believes boards need to spend more time paying attention They promote the moral character of people and test how potential CEOs handle personal stress.
Boards and executives more accustomed to focusing on numbers and strategy may feel uncomfortable with this shift. But it’s better to talk about character before hiring than sex afterward.
brooke.masters@ft.com
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