BP Is a Symbol of the British Boardroom Disease
The UK oil major faces activist pressure to retreat from a disappointing energy-transition strategy. But recent failures are best seen as symptomatic of a bigger problem.
Time to fix?
Photographer: BEN STANSALL/AFPElliott Management Corp.’s arrival at BP plc is at first glance an activist seeking a quick buck by reversing a hapless pivot to the energy transition. But BP’s woes go beyond a recent ill-judged strategic departure. The oil major also typifies the ugly side of the UK’s FTSE-100 index members, characterized by poor governance, a failure to deploy capital wisely and the overgenerous distribution of cash to shareholders.
BP’s attraction to a hedge fund like Elliott is a low share price that’s susceptible to improvement with some obvious fixes. The company’s £75 billion ($94 billion) valuation is below the sum of its constituent parts as valued by analysts; the stock trades less richly than peers on conventional industry yardsticks.