British Petroleum Company’s Corporate Governance Failure Report

Exclusively available on Available only on IvyPanda® Made by Human No AI

British Petroleum (BP) is among the world’s leading gas and oil companies that operate in seventy countries worldwide. With headquarters in London, Great Britain, it produces and sources oil and gas both offshore and on land, which makes it possible for the company to have a wide scope of operations. The manufactured and marketed fuel and raw materials provided by BP are used in multiple products of everyday use. Founded in 1909 by William Knox D’Arcy, BP is a public limited company that made it to the list of the world’s oil and gas giants.

Corporate governance plays an exceptionally large role in the operations of such companies as BP because it represents a system of rules and guidelines by which a company is controlled and managed. In cases of a corporate governance failure, the trust of the public and stakeholders decreases, leading to potentially harmful consequences for the overall success of an organization. BP had an issue with its lack of corporate governance in 2010 when an explosion and fire took place in the oil rig in the Gulf of Mexico and killed eleven workers as well as set off one of the largest oil spills in the history of US operations (“The Oil Spill by the Numbers”). According to the estimates, the Deepwater Horizon incident resulted in “about 4.9 million barrels of oil gushed into the Gulf waters, destroying hundreds of miles of fragile coastline and threatening the livelihood of the local population” (“The High Cost of BP’s Lack of Corporate Governance”). The impact of such a disaster on the company was vast. The company pleaded guilty to eleven counts of felony manslaughter and agreed to pay a pre-tax toll of $40.9 billion to cover the consequences of the spill (“The High Cost of BP’s Lack of Corporate Governance”). To this day, the deal is considered one of the largest resolutions in the history of the United States court system. In addition to this, three dividend payments to the company’s shareholders were canceled while BP also initiated some significant shifts in the board of members.

The main contributing factors to the failure in corporate governance referred to BP’s inability to ensure the appropriate safety of its workers and prevent environmental disasters that are a risk during oil and gas-related operations. The company’s board put the lives of employees in danger by not giving safety the required level of rigor in terms of planning and implementation. During the investigation, it was revealed that the BP oil well was sealed after eighty-seven days of leakage, which also points to the lack of consideration of the corporation for environmental issues and the well-being of residents affected by the disaster.

From the described case of British Petroleum failing to establish cohesive corporate governance, it can be learned that companies that deal with dangerous products should be more aware of their impact on the environment. Corporate governance efforts should not be solely based on catering to the interests of stakeholders or suppliers but also account for workplace risks. A better system of internal controls should be put in place to ensure that dangerous situations do not escalate and result in an adverse impact on workers, the environment, and the community. Transparency can be an effective tool for managing corporate governance efforts as it provides companies with greater accountability.

Works Cited

RGRD Law. 2012, Web.

YouTube, uploaded by Time. 2010, Web.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2021, July 8). British Petroleum Company's Corporate Governance Failure. https://ivypanda.com/essays/british-petroleum-companys-corporate-governance-failure/

Work Cited

"British Petroleum Company's Corporate Governance Failure." IvyPanda, 8 July 2021, ivypanda.com/essays/british-petroleum-companys-corporate-governance-failure/.

References

IvyPanda. (2021) 'British Petroleum Company's Corporate Governance Failure'. 8 July.

References

IvyPanda. 2021. "British Petroleum Company's Corporate Governance Failure." July 8, 2021. https://ivypanda.com/essays/british-petroleum-companys-corporate-governance-failure/.

1. IvyPanda. "British Petroleum Company's Corporate Governance Failure." July 8, 2021. https://ivypanda.com/essays/british-petroleum-companys-corporate-governance-failure/.


Bibliography


IvyPanda. "British Petroleum Company's Corporate Governance Failure." July 8, 2021. https://ivypanda.com/essays/british-petroleum-companys-corporate-governance-failure/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1