If anything prevents BP from sacking Tony Hayward, rather than hauling him back from the US to his London desk, it may be the difficulty in finding anyone wanting to step into the chief executive's shoes. The oil company head has demonstrated over the past two months the dangers and difficulties of leading a major company.
America's president removed his boot from Hayward's throat only so that he could, in his own words, kick his ass. And to emphasise that his attack is personal not corporate, a White House spokesman went on television last week to condemn the BP boss for going sailing while his rig still pollutes the Gulf of Mexico.
Not so long ago businesses were regarded as faceless and chief executives complained they were unrecognised. Not now. While few company heads are singled out by a US president, chief executives are being subjected to intense interrogation. Once, a chief executive held private meetings with suppliers and limited his public appearances to sales conferences and staff pep talks while the chairman addressed shareholders at the annual meeting; now both are liable to highly public abuse.
The cabin crews in dispute with British Airways regularly target their campaign at their chief executive, Willie Walsh, through slogans and cruel caricatures. Prudential chairman Harvey McGrath was confronted last week by irate institutional investors and had to defend his chief executive, Tidjane Thiam, whom they blame for the company's bungled bid for the Asian insurer AIA, with some shareholders calling for his sacking.
And Barclays' president, Bob Diamond, found himself in a New York court last week denying the British group cheated Lehman Brothers when it bought part of the failed US bank. Judge James Peck said the American-born executive "came across as evasive" and told Lehman's lawyer: "This is a witness that needs to have a leash held tight."
Diamond's four-hour examination was not quite the seven-hour ordeal Hayward was subjected to days before by a committee of congressmen, but it was as far from the civilised debate of a boardroom as a businessman can expect. The BP chief was accused of stonewalling and "kicking the can down the road" instead of taking responsibility for the oil spill.
But it is not only in the US that top executives can come under attack. A UK court heard claims last week by easyJet's founder, Stelios Haji-Ioannou, against the directors of the airline, while House of Commons select committees have grilled the heads of rescued banks, such as Sir Fred Goodwin and Andy Hornby.
That's all part of the job description nowadays and the higher profile of chief executives is something nomination committees have to take into account when making top appointments. "Numeracy and leadership are still paramount," says one London headhunter. "But an ability to communicate and to think on your feet are essential too. Tony Hayward failed on those points, and having made some early mistakes on the rig disaster, he failed to learn the lessons as the weeks went on."
Criticising the BP boss for his sailing weekend may be as unfair as the congressmen's mauling, but an alert executive must now be ready for booby traps like those. It proved that leading a major oil group requires greater skills than being a geologist, says the headhunter, who adds: "Showing stronger leadership might have meant the company conceding less to Obama. It might have meant Tony still being in charge of the clean-up."
Another headhunter, David Peters, the managing partner at Heidrick & Struggles, says the lead in talking to shareholders should be taken by the chairman in partnership with the chief executive, but states: "Communicating with the media is somewhat different. We would expect the chief executive to be the lead communicator in most situations."
There is little evidence of ambitious business people not putting themselves forward to lead companies but they have to have a thicker skin now. Eric Daniels has had to endure months of speculation that he will not last as chief executive of Lloyds, even seeing speculation that his chairman was sounding out Standard Chartered's former head as his successor. Often when companies have a vacancy at the top, the shortlists are discussed in the press – as at ITV last year – with rejected candidates publicly humiliated.
And for accounting periods starting from this week, all directors of major public companies will have to face an annual vote by shareholders on whether they should stay on the board. With institutional investors also being encouraged by the new stewardship code to become more activist and to co-ordinate their attacks on companies, board members will face an annual popularity test with the ultimate threat of losing their jobs.
GlaxoSmithKline's company secretary, Simon Bricknell, opposes such votes, saying: "We should not be introducing measures to further single out individuals." Alan Buchanan, British Airways' secretary, adds: "Annual re-election of the whole board would give the opportunity to disgruntled labour groups a greater incentive to disrupt annual general meetings in the hope of causing embarrassment to the chief executive. It also allows mischievous reporting of votes withheld as indicating a lack of support for the management."
Directors are well rewarded for their roles. Hayward received a £2m cash bonus on top of his £1m basic pay last year. His remuneration committee was unlikely to have foreseen the recent problems but it surely cannot risk provoking its critics by considering any increase for him. So the BP chief executive's punishment for his high profile will be to lose financially as well as losing his social life.
But the reward must compensate not only for personal attacks like that suffered by Hayward or Thiam but also for the risk of being forced out. A chief executive's job can seem as insecure as a football manager's at times: Ian Smith was removed at Reed Elsevier last year after just eight months when his chairman decided the publishing group had made a mistake.
Headhunter David Peters thinks chairmen need to be better at backing their chief executives. "The role of the chairman is already changing significantly," he says. "They are drawing on their own experience and insights to help chief executives develop and adjust strategy. They are also using their skills in risk management, leadership development and stakeholder communication to help steer a successful course in good times, not just to avert disaster when crisis hits."
But while it is the chief executive who has to face the cameras, appear in court or answer to Congress or the Commons, he has to be able to cope with whatever is thrown at him – abuse, criticism or ridicule. A good chief executive today can respond positively without being evasive or stonewalling. The job description has changed.Reuse content