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Can A Boss Really Know Everything That is Going on in their Business?

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Speak No Evil, Hear No Evil, See No EvilSo Tony Hayward, gaffe-prone CEO of BP is to stand down as head of the company and be sent to its gulag operation in Siberia for re-education to manage other projects. There’s no doubt that the Deepwater Horizon oil spill was a unparalleled catastrophe for the Gulf region, one whose full implications may not be known for decades. People’s livelihoods had been destroyed, possibly permanently. Somebody had to take responsibility. But did it have to be the CEO?

Hayward didn’t help his case with his insensitive “I want my life back” comments in the early days of the disaster, or with his truculent, lacklustre performance in front of a congressional committee. Watching the coverage, I could see the frustration amongst senators as he repeatedly said that he didn’t know the answer to their questions, couldn’t provide details about a particular rig, was unsure whether a particular assertion was correct. But to be quite frank, in his position, I don’t think I could either.

BP is a global business with thousands of employees scattered across hundreds of sites. Projects initiated by BP are subcontracted to a number of other companies (where are Transocean and Halliburton in this blame-fest?). To expect the head of the company to be familiar with the workings of a certain rig is completely unrealistic. Once a company gets as big and as diffuse as BP, certain functions are delegated down from the board to various levels of management. That’s who should have been called before the congressional hearing. The managers responsible for the region, for rig safety and for emergency response would have made far better witnesses than the man who they report to. Tony Hayward’s job long ago stopped being concerned with oil drilling; as a board member he was now very much a numbers man, responsible for maintaining and enhancing the company’s share price.

Sadly, it is election season in the United States, so the politicians seem to be more concerned with looking good for prospective voters than actually doing any good. Somebody was to blame for the Deepwater Horizon oil spill, and they chose to go after the biggest scalp they could find in their amateur dramatics performance of the Two Minutes Hate. While their anger made good TV, and Hayward’s non-responses may have seemed evasive, what will have been lost on the majority of viewers would have been the honesty. Hayward didn’t know, and he honestly couldn’t answer, because those areas had not been his responsibility for a long time.

When looking for who to hold accountable in the face of a disaster, it’s easy to look at the head of a company and to insist that the buck stops with them. However, it’s important to think about how a company is structured before calling for it’s figurehead to walk the plank. Corporate structure in large companies delegates responsibility for different functions to certain levels of management, who may in turn delegate other responsibilities further downward, or even outsource them to a different party. The person or people whose decisions caused the Deepwater Horizon spill could still very well be employed gainfully employed. Claiming a corporate scalp may make some people feel better, but they picked the wrong target.

[Image by Alicakes*]


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