Amanda Blanc embarked on an intense charm offensive among top BP shareholders last week to convince them that the choice of low-profile building materials executive Albert Manifold as chairman made sense.
There had been an expectation in the City that a thorough recruitment process – conducted by the no-nonsense Aviva chief executive – who is BP’s senior independent director and who led the search – might yield a more prominent chairman with wider knowledge of the energy industry.
BP was stung by early criticism of Manifold by City brokers Panmure Gordon, who accused the oil giant’s board of a ‘panic appointment’. The energy giant also found it necessary to repudiate derogatory comments made by an unnamed ‘bitter and twisted’ losing candidate for the post.
Working from Aviva’s Canadian headquarters in the last few days, Blanc spoke to all of BP’s leading UK and American investors and has seemingly managed to turn the tide of opinion. Most now are reportedly positive about the BP board’s final choice.
But there was some disappointment at the oil giant’s headquarters about the lack of a rise in the share price following the announcement, as well as at some of the negative briefing in the Square Mile.
Blanc is said to have convinced leading investors that the naysayers who challenged the choice of Manifold ‘lacked credibility’.
Landlubber: Albert Manifold’s success at Tarmac-maker CRH was brushed aside by brokers who wanted to see more oil and gas experience
In selling the selection to the City, BP and its advisers have pointed to Manifold’s stellar, under-the-radar performance at CRH, where he drove the value of the group’s shares up 342 per cent during a ten-year tenure. The share price performance of CRH, which moved its listing to New York two years ago, is described by BP insiders as ‘magnificent’.
Blanc is also understood to have pointed to Manifold’s considerable experience in making deals, and his knowledge of a building materials industry that has come under close scrutiny from regulators.
Despite claims about the new chairman’s modest Irish-based lifestyle, it has been noted that he became one of the best rewarded executives in the British Isles, amassing some £54 million of stock options between 2020 and 2024.
But while Manifold has a reputation for successfully managing bids and deals, chairing the oil giant is regarded very differently.
No-nonsense: Amanda Blanc
Being BP chairman requires great diplomatic skills given that its operations include sensitive territories such as Iraq.
He will also have to contend with the battle being waged by chief executive Murray Auchincloss to refocus the company on oil production after a disastrous effort under his predecessor Bernard Looney to transmogrify the company into a green energy pioneer.
Nevertheless, BP insists that the job of chairman is to lead the board and hold the management to account.
‘It is not to be the deep technical expert,’ one person involved in the search noted.
Being an industry expert is also no guarantee of success.
Manifold’s predecessor, Helge Lund, a Norwegian veteran of the oil sector, quit due to mounting investor pressure and criticism of his performance in the role.
An adviser to BP’s rival Shell expressed surprise that the selection panel overlooked its newest non-executive director, Simon Henry, who was appointed to the board earlier this month. Henry is a former finance director of Shell and has been influential on the board of mining giant Rio Tinto.
BP’s response is to argue that in bringing both Henry and Manifold aboard, the group ‘had the best of both worlds’.
Manifold’s first task will be to keep notorious activist investor Elliott Investment Management onside. It welcomed his appointment and wanted to see him ‘urgently’ address the company’s ‘shortcomings’. But other leading American holders of BP shares have recognised that turning the tanker around will take time, and believe that the newish team deserve at least eight quarters, or two years, of grace to show that things are on the mend.
The big question is whether Manifold will be able to withstand the pressure on BP to cut back spending on new oil and gas facilities while providing better returns to shareholders. He has experience in this area, having previously faced down activists at CRH.
There has been some concern about the length of the process to appoint the chairman. Blanc insisted on a thorough process using head-hunters, a long-list and short-list, and bringing the board along with her. But the drawn-out procedure allowed speculation to build of a takeover approach
by Shell. Fortunately for BP’s top team, Shell denied any early-stage talks and took itself out of the picture for at least six months.
Outside observers were not the only ones surprised by the choice of Manifold, with many BP insiders having no knowledge of his background.
In a bid to bolster his credentials, he has in the past few days made a point of touring the oil giant’s offices in St James’s Square in central London and holding a series of one-to-one meetings with executives and colleagues.
But only time will tell if the former building materials boss can cement his legacy at BP.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .