I am still reading news on the departure of Tony Hayward as CEO of BP.  I know a lot has been and will no doubt continue to be written on this issue.  I have discussed the points made below with numerous colleagues both in the UK and elsewhere.  I therefore thought the least I should do was put down a brief note of the views we reached on one specific point which relates to the application of a couple of the rules on corporate governance.  I am sure others may have many other points to raise. Our discussion has been around the key question, who should depart, the Chairman, the CEO, both or neither? We have raised several further questions but have no answers.
 
We hadn't really appreciated until now what good corporate governance is all about.  We thought among other things it dealt particularly with issues of protecting and advancing shareholders’ interests through someone (we now wonder who, exactly) setting the strategic direction of a company and appointing competent management to do so. We also thought, after Sir David Walker's epic report last year, the key focus/focal point was to be the Chairman.  I would suggest perhaps this is even more necessary and indeed appropriate in time of crisis.
 
BP apparently has (according to numerous media reports over quite a long period) a somewhat  unknown and rather uncommunicative chairman, fairly recently appointed.  Certainly he hasn't appeared much  on UK television or radio, or indeed print  media over the last few months.  BP also has a board of directors, which appears, again from media reports or, in this case, lack of such reports, to be silent and generally unsupportive of their own CEO, as shown by that general silence. 
 
We did note in The Times fairly recently a comment which stated that the CEO still had the full support of the board---we generally know how to interpret that type of statement.  Indeed I am not quite sure how it ties in with him leaving his current position.  Reports have also noted that the Chairman suggested he would respond to the wishes of the Board as to his stepping down. We have had no further reports on this, one way or the other.  More recently he has said, apparently, he saw no reason to step down.  We wonder how this ties in with the Walker Report.
 
Whether it is the board, or the Company, someone needed  to produce, as we have read and heard over the last few weeks, what can only be descried as a scapegoat to satisfy  we suggest Congress, the media and the American public, particularly in the current business climate. Tony Hayward is apparently that man.  Is that what is meant by "protecting and advancing shareholders' interests?"  Perhaps most shareholders agree with this decision. It might be the only solution in this particular case, we don't know.  We would be interested to find out.
 
On a more general point and as noted above, is this process what is meant by corporate governance ? We had thought it also involved the Chairman leading from the front and representing the firm to the world at large--indeed the core of the Walker Report focuses on the Chairman, not on other board members.  I don't know whether or not Tony Hayward should stay or go.  The feedback I have had from those people I have asked both here and abroad is that the person who should take ultimate responsibility within BP is the Chairman--but we understand he seems to be reluctant to do so.  Is this because he was previously involved with telecoms related  businesses and therefore, could not be assumed to have any operational control or knowledge of  an oil major?  Does that mean it would be wrong to make him responsible on the basis he was only the figurehead, as just mentioned. Is that what Walker intended?
 
Is it the case that when there needs to be a choice between CEO and Chairman for a “scapegoat”, the CEO is often the easier to remove, or do we have to look at this on a case by case basis? To try and replace both men was probably unrealistic for a company of this nature  and in this position.  Is the point that the CEO was the public face of the company in this instance? He was the technical "hands on" expert.  We wonder if the board of Prudential plc are going through the same debate. That discussion has gone very quiet.
 
I am left once again with the feeling that the numerous reports on governance are always one step behind the practical and commercial, never mind the political and economic realities.  In this case it looks as if  US politics won hands down over UK corporate governance.  I wonder what Sir David Walker and indeed the FRC think about this one.  Great case study for someone.  End result perhaps, White House: one--corporate governance: nil.