A Polluting Boss Has to Pay
Published in Les Echos
(France) on 14 June 2010
by David Barroux (link to original)
(France) on 14 June 2010
by David Barroux (link to original)
Translated from
by Craig Monaghan.
Edited by Hoishan Chan.
Fifty days after the worst oil spill in U.S. history, President Barack Obama demanded that BP’s CEO resign and that the petrol giant suspend paying out dividends in order to cope with the financial consequences of this ecological and economical disaster. A new case of ‘the polluter pays’ is emerging: in case of disaster the boss has to quit and the company must renounce its profits.
There is nothing taboo about demanding the “boss’s” head. Deceitful bosses often deserve to go to prison. Those who have committed major strategic errors deserve to be fired. Nobody contests that.
But should a CEO who neither knew about nor could have even prevented the causes of a dramatic accident, which he didn’t provoke, be sacrificed, too? He probably should be. Thus the 21st century boss does not necessarily have to be guilty himself in order for him to be considered responsible for the excesses of the company which he heads up. Nobody expects him to be able to ‘micro-manage’ a multinational corporation on a daily basis, but it is his duty to be the guarantor of a corporate culture. It is him who must take on a role of responsibility and encourage his troops to limit the risks they take while finding a balance between the short-term pressure of competition and long-term needs. Daniel Bouton paid for Kerviel, and Tony Hayward should be punished for Deepwater.
Just like its CEO, BP must face up to its responsibilities. That’s the bottom line. How this should be done, however, is not clear. It’s not because it’s British and worth billions that BP must be fined. It’s because it polluted and must assume the cost of this pollution. By giving in to popular and nationalist pressures, the American president is aiming in the wrong direction and against his own camp. Just as ‘British’ as American, BP is not only one of the main producers of black gold in America but it is also a giant, 40 percent of whose shareholders are American. Seriously undermining BP would therefore also weaken the United States. Finally, attacking the symbol of the dividend is to go over the heads of the management and punish the shareholder. The share price of BP has already practically halved. The shareholder has already been sufficiently punished.
There is nothing taboo about demanding the “boss’s” head. Deceitful bosses often deserve to go to prison. Those who have committed major strategic errors deserve to be fired. Nobody contests that.
But should a CEO who neither knew about nor could have even prevented the causes of a dramatic accident, which he didn’t provoke, be sacrificed, too? He probably should be. Thus the 21st century boss does not necessarily have to be guilty himself in order for him to be considered responsible for the excesses of the company which he heads up. Nobody expects him to be able to ‘micro-manage’ a multinational corporation on a daily basis, but it is his duty to be the guarantor of a corporate culture. It is him who must take on a role of responsibility and encourage his troops to limit the risks they take while finding a balance between the short-term pressure of competition and long-term needs. Daniel Bouton paid for Kerviel, and Tony Hayward should be punished for Deepwater.
Just like its CEO, BP must face up to its responsibilities. That’s the bottom line. How this should be done, however, is not clear. It’s not because it’s British and worth billions that BP must be fined. It’s because it polluted and must assume the cost of this pollution. By giving in to popular and nationalist pressures, the American president is aiming in the wrong direction and against his own camp. Just as ‘British’ as American, BP is not only one of the main producers of black gold in America but it is also a giant, 40 percent of whose shareholders are American. Seriously undermining BP would therefore also weaken the United States. Finally, attacking the symbol of the dividend is to go over the heads of the management and punish the shareholder. The share price of BP has already practically halved. The shareholder has already been sufficiently punished.
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