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BP is deeply dysfunctional, but it could be worse

Investors should be concerned by Manifold’s ousting, but better to fire too many executives than too few

At some companies, getting rid of the boss is nigh impossible. Just look at US tech giants SpaceX and Meta Platforms, where leaders Elon Musk and Mark Zuckerberg are de facto unremovable. At other companies, defenestrations seem to happen all too often. UK oil major BP is an unhappy example of one where rapid change is becoming the norm.

The beleaguered oil major has removed chair Albert Manifold after less than a year in the job over “serious concerns” about “important governance standards, oversight and conduct”. This adds to a long list of senior departures. Since 2023, BP has parted ways with two chief executives, Murray Auchincloss and Bernard Looney, and one board chair, Helge Lund.

Companies can generally withstand high-level oustings even if they come as a nasty surprise; BP’s shares fell 4 per cent on Tuesday. In the end, single honchos have less sway than their salaries sometimes imply. At BP, there are outward indications that the underlying organisation has revved up, with resilient production and few outages on display at first-quarter results. Manifold had installed a well-respected new chief executive in Meg O’Neill, working alongside deputy Carol Howle and finance chief Kate Thomson.

Still, BP shareholders should be concerned by the merry-go-round. Manifold had been perceived as the architect of BP’s turnaround. His plan to refocus the company around its traditional oil and gas business, selling assets and cutting costs, had played well with activist investor Elliott Investment Management and investors. BP’s share price is up almost 30 per cent since Manifold took over as chair in October, outperforming rival Shell. There’s no suggestion the board objected to his strategy, but it’s now less clear how quickly it will become reality.

Manifold’s rapid-fire appointment and ejection also raise questions over BP’s selection process. The executive had never chaired a board, but he was a known quantity with a long career at cement maker CRH. Even if his management style may have been more suited to the role of chief executive than chair, it should still have been possible to get a feel for how he might interpret the role before giving him the job.

Helming BP is particularly challenging, even for the best of candidates, because the company is neither one thing nor another. It cannot be entirely straightforward to find candidates who are neither too devoted to green energy nor too enamoured with the oil patch. Add in the need for human skills — the ability to shake things up without overstepping the line of what is acceptable behaviour at work — and the list shrinks further.

Still, when a manager behaves in a way that is deemed unacceptable it is better for them to go than to stay. Shareholders can at least take up their gripes over the selection process with the board. That means that, in a sub-optimal world in which one has to choose between companies that fire their leaders too often and companies which can’t ever get shot of the people at the top, it might be safer to err on the side of BP.

BP chair’s departure turns spotlight on Meg O’Neill to deliver swift turnaround

Albert Manifold’s behaviour and use of personal devices cited as factors in his removal over conduct and governance concerns

Six months ago Albert Manifold played a critical role in convincing Meg O’Neill to become the next chief executive of BP, a position that had come to be viewed as a poisoned chalice in the industry after two departures in three years.

This week the board on which O’Neill now sits ousted the Irish businessman as chair, with the company saying there had been “serious concerns” about his behaviour. People familiar with the matter claimed there were “multiple” whistleblower complaints about alleged “bullying”.

Manifold told the FT the decision to remove him came “out of the blue” and he added via a spokesperson that he would contest the claims about his alleged behaviour, saying he had worked to “drive genuine change at BP — cutting costs, challenging excess, and holding the organisation to higher standards.

“I dispute entirely the characterisation of my conduct and I will not allow a false narrative to go unchallenged,” he added.

To critics Manifold’s ousting is a sign that BP has become almost ungovernable, having now replaced two CEOs and two chairs in the past three years after a mismanaged pivot towards renewable energy left it lagging its competitors. Its shares, which had risen faster than Shell this year on hopes of a turnaround, fell 4 per cent on Tuesday.

“This just creates another ridiculous level of uncertainty at a time when radical restructuring is called for,” said analyst Paul Sankey, founder of Sankey Research.

Others hope it is a sign that O’Neill might be getting a grip of a company that had threatened to become a takeover target, even if they accept that Manifold played an important role in fostering the turnaround that has helped BP’s shares rise more than 20 per cent since he joined in September.

When Manifold, the former chief executive of Irish building supplies group CRH, replaced outgoing chair Helge Lund, one person involved in the search process said that his low profile and lack of oil and gas experience were not an issue.

“A chair is not meant to be the high-profile person. The CEO is the leader of the business,” the person said.

Just months later people familiar with the matter described tensions between Manifold and BP’s board and O’Neill, with the chair allegedly overstepping his role and at times acting like an executive tasked with the day-to-day running of the company.

They accused him of a habit of talking down to employees at all levels and a “shouty” management style that was at odds with BP’s culture.

One of the people said many colleagues — junior and senior — found Manifold “impossible to work with” as he “wanted to control everything”, adding: “You can’t operate like that anymore.”

Two people said Manifold had also used personal accounts or devices for carrying out company business, in breach of BP’s policies.

A person close to Manifold disputed this claim, saying the company had willingly sent emails to Manifold’s personal email. Manifold was not aware of any whistleblower complaints before his dismissal and so had zero chance to respond, the person added.

O’Neill, whose no-nonsense reputation has helped her become the most senior woman in the energy industry and the first to run an oil major, is a member of the board which BP said made a “unanimous” decision to remove him rather than risk her authority being undermined.

Since starting in April she has already moved quickly by splitting BP into two main business units in a return to its traditional oil and gas structure before it attempted to transform into an energy transition leader under Bernard Looney.

The move to make BP greener was reversed by his successor Murray Auchincloss, who left last December after pressure from activist investor Elliott Management to accelerate the strategic overhaul and arrest the company’s poor financial performance.

Manifold’s departure will boost O’Neill’s power in the company, but may also leave her exposed as the sole person responsible in investors’ eyes for quickly delivering a turnaround.

She must also hold together a company that has been rocked by multiple senior departures in the past three years.

UBS analyst Joshua Stone said that while the manner of Manifold’s departure may initially weigh on BP’s share price, investors would be reassured by O’Neill’s presence, saying she had joined at a “critical turning point and can help reverse these years of weakness”.

BP has faced turmoil ever since Looney left in 2023 over his failure to disclose the full extent of his relationships with BP employees during his appointment process. His bold pivot towards renewables, which had alienated many investors, quickly unravelled.

Manifold’s departure will undoubtedly stoke renewed questions over the BP board’s decision-making, but some see O’Neill and a new chair — to be appointed later this year — as a chance for a fresh start.

“The problems at BP are rooted in the weakness of the board,” said one former BP executive.

The executive, who did not want to be named, said a new chair should be empowered to rebuild the board with professionals who know their role is to advise and oversee rather than try to run the company from the boardroom.

“Meg O’Neill and the entire team at BP deserve better,” said the executive.

Henry Tarr, co-head of energy and environment research at Berenberg, said most investors had backed Manifold’s vision for the company.

“There will be questions again as to whether that changes the strategic direction or the urgency with which the company will pursue its goals. The release seems to suggest that they’re very much sticking with Meg,” he said.

Interim chair Ian Tyler said BP’s board and executives still “have deep conviction in the strategic direction we have laid out”.

People close to BP told the FT the company is bracing for potential legal action by the ousted chair.

While BP’s board felt it had no choice but to remove Manifold, Sankey warned this was not guaranteed to deliver success in the eyes of international investors concerned about the group’s share price.

“To bring about change you need leaders to upset people and the constant leadership changes will make US investors question whether they really need to own BP stock.”

It is easier to fund maintenance and infrastructure upgrades when freed from the temptation to pay big dividends

Labour leader hopeful Andy Burnham wants “stronger public control” of utilities. He has yet to share much detail about what this would look like. But while the idea of nationalising companies conjures up images of disastrous capital misallocation, in rare cases, it might be the least bad option. Water is a prime example.

The battle to keep England hydrated has become a case study in the failure of for-profit control of essential services. Privatisation of the country’s water boards, beginning in the late 1980s, has resulted in debt-ridden entities and deteriorating quality — to the extent, in the case of Thames Water, of pumping effluent into rivers.

Thames Water’s miserable predicament is not an inevitable result of privatisation — there can be merits in harnessing the experience and entrepreneurship of the private sector. Southern Water also discharged sewage but its backers, led by Macquarie Asset Management, have since recapitalised the group, enabling it to carry out turnaround plans.

The problem comes when concomitant oversight is missing. Water watchdog Ofwat failed to call time on practices that prioritised dividends over investment, and was one of four regulators overseeing the sector. Hence the government is abolishing it and putting a single regulator in charge. Energy regulator Ofgem has often been a step behind too, allowing poorly financed suppliers to enter the market and failing to anticipate lengthy volatility in energy prices.

For now, Thames Water creditors remain locked in talks with the regulator and government to fend off renationalisation, forking out hefty fees to lawyers in the process. In this scenario, nationalisation looks to be the better option.

And it’s hardly a radical proposal. Most of the world keeps water work in some form of public control, be it at national, state or municipal level: England is the rarity, up there with Chile where water was privatised under dictator Augusto Pinochet. As such, England has plenty of templates to choose from — including across the border in Scotland where the average bill is about £100 cheaper.

A smart starting point, only slightly further afield, comes from the Netherlands. Responsibility lies at both national level, for major bodies of water, and at district level. Funding requirements are met by the public sector NWB Banks, or water bank.

It is easier to fund maintenance and infrastructure upgrades when freed from the temptation to pay big dividends. The water bank exudes stability: its capital ratios are twice those of commercial European counterparts and, as a government entity, it can raise funds cheaply while offering investors a pick-up over sovereign debt. There are no intermediaries, no labyrinthian corporate structures and no defaulting bonds. Water boards, and the councillors who take responsibility within their municipalities, ensure accountability.

Hybrid models can and do work — in Manchester’s transport system, for example, privately run buses and trams follow publicly set routes and fares. The Bee Network, as it is known, has been delivered on time and budget. By the same token, both purely public and entirely private utilities have racked up failures. There’s no guarantee that nationalisation would fix what ails England’s water sector — but it couldn’t be much worse.

Chinese territory enjoys surge of investment from mainland as wealthy spread assets across different jurisdictions

Hong Kong has overtaken Switzerland as the world’s biggest cross-border wealth hub for the first time, as an influx of investment from the Chinese mainland helped it eclipse the traditional haven.

Wealth managers in the Chinese territory booked $2.9tn of international assets in 2025, according to estimates from the Boston Consulting Group.

About 60 per cent of that came from mainland China, with BCG forecasting that the rapid increase in Asian fortunes would widen the gap between Hong Kong and Switzerland to almost $600bn by the end of the decade.

China’s growth has been bolstered by a return of equity capital markets activity in Hong Kong that has allowed companies to raise funds offshore, as well as the country’s manufacturing dominance in sectors such as electric vehicles.

But the rise of the Asian city as a cross-border hub also reflects broader shifts in global wealth flows, with clients seeking to spread their assets across multiple jurisdictions to hedge against geopolitical tensions, sanctions risks and political instability.

“This is a completely new phenomenon. I haven’t seen anything like it,” said Michael Pellman Rowland at Baseline Wealth Management, a Swiss-based independent manager with global clients.

Wealthy clients moving money offshore had traditionally been motivated by tax planning or corporate structuring, Rowland said, but since the coronavirus pandemic they had increasingly sought “jurisdictional diversification” — spreading assets across countries to protect against geopolitical and political risks.

Diversification had helped reinforce the dominance of the world’s largest “booking centres” — the hubs where banks manage and safeguard offshore wealth for international clients — according to BCG partner Michael Kahlich.

“We see two different hubs emerging,” Kahlich said, with Hong Kong and Singapore anchoring one network in Asia, and Switzerland, the UAE and the US forming a rival axis to the west.

Although Switzerland is more heavily tied to mature western European fortunes and less exposed to the fast-growing Asian wealth flows reshaping the industry, bankers said that many wealthy Asian clients still wanted assets ultimately booked in Switzerland.

Most large international banks, including Swiss private lenders, now have major booking operations in Hong Kong and Singapore to serve Asia’s growing fortunes.

But financiers question whether the country is doing enough to stay competitive, with its biggest bank, UBS, at loggerheads with regulators over new capital rules.

“The question is whether Switzerland is doing enough to actively defend its position in wealth management, or just relying on its stability. I think it is the latter,” said one UBS banker based in Zurich.

Other centres such as Dubai have also grown rapidly since the pandemic as a bridge between rival eastern and western pools of capital.

Banks including UBS, JPMorgan and Deutsche Bank have expanded aggressively in the emirate in recent years, drawn by zero income tax, relative political stability and an influx of wealthy individuals, hedge funds and family offices from across Russia, India, China, Europe and the Gulf.

But cross-border wealth booked in the UAE remains much smaller than either Switzerland or Hong Kong at $721bn last year, BCG said, even with growth of 11 per cent.

Singapore, another major beneficiary of the eastward shift in global capital, has also seen growth moderate after high-profile money laundering cases triggered a regulatory crackdown and tougher scrutiny of wealthy foreign clients.

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Paris initially lukewarm on including Britain in European Commission proposal to shield strategic industries from imports

France has given the British car industry a major boost by suggesting that the EU could allow UK-made vehicles to qualify for “Made in Europe” subsidies.

Under current EU proposals, vehicles for corporate fleets and small electric vehicles would have to be assembled within the bloc in order to be eligible for public procurement and subsidies. Nissan, one of the UK’s biggest automotive employers, said it would shut its flagship Sunderland factory were the policy to take effect. 

France’s trade minister told the FT that his country was now asking Brussels to solve the “problem” of the UK’s exclusion.

“We will have to clarify this problem. They don’t belong to the EU, but they are very close neighbours. Of course, they’re very much integrated, so how do we solve this?” Nicolas Forissier said. “It should be discussed. I think it’s an important issue.”

The stance amounts to a significant change in direction from France, which was a big supporter of restrictive rules of origin in the Industrial Accelerator Act (IAA).

The IAA, which was approved by the European Commission in March, needs to be approved by member states and the European parliament before it becomes law.

Countries including the Netherlands are also pushing for UK inclusion, while German car companies such as BMW are keen to protect their UK operations, including production of their Mini car in Oxfordshire. 

EU officials say that industry groups are pushing to have a smaller set of countries that would fully qualify as “Made in Europe” to preserve value chains, which would include the UK and others. But there would be conditions attached.

One diplomat said many member states had yet to adopt a position on the issue ahead of the first official discussion on the draft IAA, at a meeting of ministers on Thursday. 

Some states are concerned that further loosening the geographic scope of the law could weaken its goal of revitalising Europe’s industry, while members of the European parliament are also pushing for a more limited scope. 

The IAA is part of the Commission’s effort to shield strategic industries from imports, particularly from China. The proposal affects corporate fleets, which amount to 60 per cent of the European car market.

It allows countries that have free trade agreements with Brussels, including the UK, to be eligible for public procurement and subsidies in clean tech, heavy industry and parts of the car sector, provided they reciprocate.

But it excludes incentives connected to the greening of corporate fleets and a credit for small electric vehicles.   

The Commission said non-EU countries were excluded from these two policies because “they are not achievable if they do not also translate into growth and manufacturing activity in EU electric vehicle supply chains”.

UK ministers have been lobbying for changes in the Commission’s proposals since March.

One car industry figure said EU manufacturers supported the UK because of the integration of supply chains. According to the UK industry body SMMT, UK-EU automotive trade is worth €80bn a year.

The UK Department for Business and Trade declined to comment.

BP descends into upheaval — again

BP’s chair came out on top in his first dust-up with the company’s chief executive. But in the second, it’s Albert Manifold who’s headed for the exit.

The British oil major announced on Tuesday that it was removing Manifold as chair, following “serious concerns” about his behaviour, including allegations of bullying.

“I was removed without warning and without explanation,” Manifold said through a spokesperson. “I dispute entirely the characterisation of my conduct and I will not allow a false narrative to go unchallenged.”

In the end, he lost a fierce battle of wills to steer the company. 

Manifold was appointed as chair last July, replacing Helge Lund after six troubled years. He arrived just months after activist investor Elliott Management disclosed a significant stake in the group, which it has used to push for cost cuts and for BP to focus on its core oil and gas business.

Manifold swiftly launched a strategic review, seeking out Elliott as he attempted to radically reshape and slim down the company.

But he soon clashed with chief executive Murray Auchincloss over the changes, with BP replacing Auchincloss late last year.

In recent months, it seemed that the oil major, after facing perennial boardroom turmoil and abandoning its green transition, was finally regaining its footing.

The chair was critical in convincing Meg O’Neill to become chief executive to steady the ship. She moved quickly, splitting BP into two main business units, in a return to the oil major’s structure before it tried to transform itself into a renewable energy company.

But Manifold and O’Neill clashed as well.

One person with knowledge of the matter claimed he had attempted to restrict O’Neill’s ability to meet independently with BP’s non-executive directors. O’Neill, who only started in April, forged a reputation as a tough operator as head of Woodside Energy and is said to have bristled at challenges to her authority. 

She is a member of the board which BP said ultimately made a “unanimous” decision to remove Manifold.

The upheaval is raising questions about the board’s ability to see through the strategic overhaul of the company that Elliott and Manifold were championing. Critics see it as a sign that BP has become almost ungovernable, having now replaced two chief executives and two chairs in the past three years. 

Others hope it’s a sign that a new chief executive might finally be getting a grip on a company that has faced ongoing turmoil, even if they accept that Manifold helped foster the turnaround that has helped BP’s shares rise more than 20 per cent since he joined.

DD suspects BP knows the temperature will increase on its long-running revitalisation plans, especially after it sacked a chair supported by activist shareholder Elliott.

The turmoil also raises the question of whether BP, long a target for outside interest, including from rival UK oil major Shell, might again be back in play just as takeover speculation had begun to die down.

Andrius Kubilius pushes for governments to open weapons stockpiles to Ukraine

The EU’s defence chief has urged countries to open up their arms stockpiles to supply Ukraine and boost production by moving away from “haute couture” weapons production.

“Governments should open their stockpiles to provide Ukraine with what they need,” the EU’s defence commissioner Andrius Kubilius told the FT.

Strengthening Ukraine’s military was all the more important if Europe reopened formal negotiating channels with Russia, Kubilius said, as momentum grows in Europe for such talks.

“The only formula which can bring peace is so-called peace through strength. Strength should be on the Ukrainian side,” and Europe can help with that, he stressed.

The former Lithuanian prime minister also warned that Europe was lagging behind Russia and Ukraine in missile manufacturing because its companies were producing sophisticated and expensive weapons that were difficult to scale up.

“Europeans produce what they call ‘haute couture’ production. Technologically very sophisticated, very advanced, very expensive, and impossible to ramp up,’’ he said. ‘‘Ukrainians produce, what those European industries call, ‘good enough’.”

Kubilius, who is spearheading Brussels’ efforts to strengthen Europe’s defence industrial base, said Europe needed to learn from Ukraine’s wartime methods and shift to cheaper systems that could be manufactured rapidly and at scale.

“The Ukrainians started to produce their own cruise missile Flamingo, and this year they are ready to produce around 700.”

By contrast, he said, the EU made fewer than 300. Russia produced 1,200.

Ukraine could buy EU weapons from stockpiles using a €60bn weapons pot from a recently agreed €90bn loan, he said. The sellers could then use that money to buy more or scale up production.

His call comes as the EU is preparing initiatives aimed at boosting defence production and reducing the fragmentation of Europe’s arms industry. Brussels is due to present a plan in July to create a more integrated market.

The proposal is set to tackle a patchwork of national rules and procurement practices that he said had in effect closed off defence markets and hampered cross-border industrial defence co-operation.

“There is really no market and plenty of obstacles,” Kubilius said.

He argued that national governments heavily protect domestic defence champions, with large countries such as France and Germany buying 70 per cent of what their own industries produced, while only about 10 per cent was sold to other EU countries.

The planned reforms are set to tackle technical barriers such as mutual recognition of testing and certification procedures and simplifying intra-EU transfer licences for military components, which vary across member states.

Kubilius also said consolidation in the defence sector should be encouraged. Governments often invoke national security exemptions to avoid following market principles in defence procurement, creating what he described as a “really closed system”.

Europe should not fear the planned tie-up, dubbed Project Bromo, between Airbus, Thales and Leonardo, which aims to create a European space and satellite champion capable of competing with Elon Musk’s SpaceX, Kubilius said.

For global competition, you need “scale and size”, he added. “This is exactly what Bromo is bringing. Now how to keep competitive environment back domestically, that’s always an issue, but I think it should not be an obstacle for us to scale up some of our champions.”