+1-646-6882318
nicki@theglasshammer.com

Accountability in Energy Companies: Building a Culture of Trust for Increased Safety

By Melissa J. Anderson and Nicki Gilmour

In the same month as the Japanese nuclear crisis, BP released its sustainability report for the past year.

While the report has gotten plenty of press for what it hasn’t mentioned (the amount of oil spilled and figures for the carbon dioxide and methane released in the Deepwater Horizon disaster last year), the report does include some interesting information on the company’s plans for safety and accountability going forward.

New Safety Measures

BP’s Group Chief Executive, Bob Dudley, wrote in his letter in the report:

“To ensure that our enhancements to safety and risk management are applied quickly, thoroughly and effectively, we are carrying out a wide-ranging change programme. We have set up a new safety and operational risk function that has its specialist personnel embedded in BP’s businesses, working alongside the line management to guide, advise and, if needed, to intervene.”

He continues:

“2011 will be a year of consolidation in which we focus on our number one priority – safety – and strengthen the drivers of long-term performance, such as risk management, capability and relationships. We will invest in areas where we excel, such as exploration, and we will enter into new types of relationships with partners.”

According to the report, the company is launching a new safety and operational risk function, that will operate independently from any of the businesses, and will get a seat at the executive table. The company is continuing to review its risk management system, and it has also restructuring its upstream business, so that exploration, development, and production will each receive more visibility at the executive level.

Value Systems

Finally, the company says it is in the process of changing its values system – to ensure safety and environmental sensitivity become a bigger part of the company culture. The report quotes Simon Webley, Research Director, Institute of Business Ethics as saying:

“The fact that 552 employees were dismissed in 2010 for breaches of the BP code of conduct and 14 contracts were terminated shows that first, the code is taken seriously by BP management and second, that a significant number of employees did not think it important enough to implement. There is clearly work to be done in continuing to raise awareness and provide meaningful training.”

BP’s focus on changing its culture highlights the need for a culture of transparency and accountability. This benefits not only the company’s employees, but also its shareholders. After all – the company reportedly shelled out $18,400,000 in environmental expenditures in 2010, plus $52,500,000 in fines this year.

Compare that to, for example, the Royal Dutch/Shell Group of Companies, which was awarded a Catalyst Award in 2004 for its gender diversity and inclusion accountability strategy.

According to Catalyst, by enforcing accountability standards, the company was able to increase the number of senior women in leadership dramatically.

“Between 1997 and 2003, women’s representation at the senior executive level increased from 8 percent to 32 percent; at the senior management level, it increased from 7 percent to 14 percent; and at the middle management level, it increased from 9 percent to 22 percent.”

While Shell’s initiative dealt with gender inclusion, and BP’s need for oversight relates to safety and environmental concerns, the Shell case shows that transparency and accountability in the energy industry is not impossible. Changing any corporate culture takes time, but with the right grassroots motivation and support from the top, it can happen.

Leave a Reply