In under three years, BP has cycled through three CEOs and three chairmen. The latest jolt came this spring, when—only weeks after a new CEO arrived—the board abruptly removed its chairman, pointing to serious concerns about governance, oversight and conduct. The departing chairman rejects that account, saying he was let go without warning, and disputes the characterization of how he worked. One activist investor was blunter still, describing the company’s nomination process as “dysfunctional.”
It is tempting to file all this under bad hires or bad luck. The more useful lens is the one boards almost never apply: This is a transition problem, and transition problems are systematic, not personal.
Begin with what decades of research consistently show. Around 40 percent of executives are pushed out, fail or quit within 18 months of taking a senior role. When you ask why, a lack of competence is almost never the answer—it accounts for roughly one in 10 failures and sits near the bottom of the list. These are people who clear exhaustive searches. The chairman BP removed had spent a decade running a large, listed company, reshaping its portfolio and rewarding shareholders. Whatever went wrong, it wasn’t that he couldn’t do demanding executive work.
What actually derails senior leaders typically clusters into three areas no résumé screens for: culture, people and politics. Here is the uncomfortable part for boards—all three are nearly invisible during hiring, which is precisely the stage boards pour their energy into.
Consider how the money gets spent. By one industry estimate, about 90 percent of the cost of an executive hire goes into the front end: the search firm, the assessments, the interviews. Barely 10 percent—sometimes nothing—goes into making that leader successful once they arrive. BP, like most large companies, ran a rigorous global search for its chairman. But rigor in selection is not the same thing as support in transition, and the two are routinely confused. You can pick impeccably and still set the person up to fail by handing them a laptop, a calendar and good luck.
The risk multiplies when the leader is an outsider to the sector. Moving an accomplished executive from one industry into another—building materials into energy, in this case—is among the hardest transition types there is. What most often breaks a transition is not capability but the ability to read a culture you didn’t grow up in, and to time your moves to it. Push for change before you’ve earned the right and the organization rejects you like a mismatched transplant; move too cautiously and you fail to deliver what you were hired for. The BP board cited oversight and conduct concerns; the former chairman frames his approach as driving change with urgency. I won’t adjudicate that dispute. But notice that the distance between “urgency” and organizational rejection is exactly the distance a structured transition is meant to manage—and it rarely gets managed at all.
Now layer on the cost of doing this repeatedly. Each executive transition directly affects, on average, about a dozen other leaders. The direct reports of a struggling incoming leader tend to underperform their peers by around 15 percent. And every publicly bungled handover at the top breeds organizational anxiety and a “momentum freeze”—the stretch when everyone waits to see what the new leader wants before committing to anything, and good initiatives quietly stall. A company on its third chair and third CEO in three years isn’t simply absorbing three transition costs. It is teaching its own people, and its market, to brace rather than build.
BP’s investors are openly split on what this means, and revealingly, both camps can be right. One large active shareholder warns against missing the forest for the trees, arguing the strategy and the asset base matter more than any single personnel move. An activist counters that the board’s repeated turnover raises real questions about its ability to choose—and to challenge—its own leaders. The strategy can be sound and the transition machinery can be broken at the same time. Those aren’t competing claims; they’re two diagnoses of two different problems.
This is why boards and investors should scrutinize the process, not just the picks. Investors have long admitted that “quality of leadership” is the input they have the least confidence measuring—and the research is unforgiving about the price of getting succession wrong, with unplanned handovers associated with enormous destruction of shareholder value. A board that has churned this much owes its owners more than another name. It owes them a credible account of how it transitions leaders into the seat, not merely how it fills it.
The fix is not exotic. Treat chair and CEO transitions the way the best organizations already do—as managed processes, with a genuine pre-boarding phase, structured onboarding, dedicated transition support and a written handover that outlives the individual. Ask, before the next appointment: Have we set this person up to read our culture, sequence their people decisions and map our politics—or have we simply admired their credentials and wished them luck?
A former BP chief executive put the bar plainly in recent days: The leadership has to be top-grade and, above all, stable. He’s right. But stability at the top is not a personality trait you can hire for. It is an outcome you engineer—and right now, that engineering is what’s missing.
