- Helge Lund to step down
- Succession process underway
- CEO Auchincloss feeling the heat
BP (BP.) shares cheapened 2.9% to 389p in early dealings after the oil major said chair Helge Lund will step down ‘in due course’, news that arrived just weeks after the FTSE 100 group announced a pivot away from green energy.
London-headquartered BP has kick-started a succession process to select a new chair to replace Lund, who has been in post since 2019.
This will be led by BP’s senior independent director Dame Amanda Blanc, the CEO of Aviva (AV.).
‘It is intended that the successful candidate will join the board and work together with Helge to ensure an orderly transition ahead of taking on the role of chair, at which point Helge will step down from the board, most likely during 2026,’ explained BP.
While the succession process progresses, the board’s focus will remain on overseeing management’s delivery of the ‘new strategy and this will continue to be their key priority under the new chair’, added BP.
Lund commented: ‘Having fundamentally reset our strategy, BP’s focus now is on delivering the strategy at pace, improving performance and growing shareholder value. Now is the right time to start the process to find my successor and enable an orderly and seamless handover.’
ON BORROWED TIME
If any major executive was on borrowed time, it was Lund, co-architect of the ‘performing while transforming’ plan alongside BP’s former CEO Bernard Looney, who left more than 18 months ago.
The chair is often the first to carry the can for corporate failures. Having presided over BP’s recently abandoned energy transition strategy it’s a surprise it has taken this long for Lund to announce he is stepping down.
AUCHINCLOSS UNDER PRESSURE
BP will hope Lund falling on his sword helps satisfy frustrated shareholders, in particular the feared US activist Elliott.
However, the company’s current CEO Murray Auchincloss will still be feeling the heat as the market looks for meaningful improvements in the group’s operational and financial showing.
Russ Mould, investment director at AJ Bell, observed: ‘So far investors, including Elliott, do not seem overly impressed with Auchincloss’ new vision for the business outlined at a strategy day in February. He will need to do more than just row back on the company’s green push to truly convince the doubters.
‘A big gap has opened up in terms of financial and share price performance not only with BP’s rivals across the Atlantic but also with fellow UK-listed oil giant Shell (SHEL). Closing that gap is going to be a big challenge for BP and may mean taking more radical action than has been proposed thus far.’
Mould continued: ‘BP could do with bringing in a chair with real heft and credibility with the industry and the market. It has some time to find the right person given Lund is sticking around until next year.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Martin Gamble) own shares in AJ Bell.
