Low-Profile BP Chairman Gets Moment in Spotlight
Carl-Henric Svanberg, the chairman of BP and a former semiprofessional ice hockey player in Sweden, could use all the protective gear he can get when he meets President Barack Obama on Wednesday to discuss the oil spill in the Gulf of Mexico.
Mr. Svanberg, who has been in the job since January, is unlikely to get a warm welcome in Washington, where criticism of the oil giant’s efforts to stop the spill, clean up the oil and compensate local business is mounting.
But the 58-year-old former chief executive of the Swedish telecommunications company Ericsson has also faced criticism in Europe for keeping a relatively low profile as the disaster has unfolded, letting Tony Hayward, BP’s chief executive, catch most of the criticism.
“Normally you’d expect a chairman to be the face of the company, and perhaps he should have been more visible,” Jane Coffey, head of equities at Royal London Asset Management, said. “I’m glad he’s going to Washington now.”
He will be joined by Mr. Hayward; Robert Dudley, who heads BP’s cleanup efforts in the United States; and Lamar McKay, head of BP America.
Shares of BP closed higher in New York Tuesday, but were lower in London trading Wednesday.
Mr. Svanberg’s appointment as chairman of BP’s board surprised investors — and even, by his own admission, Mr. Svanberg himself.
He led an impressive turnaround at Ericsson , where he took over as chief executive in 2003 after almost two years of losses. By cutting jobs by half and selling stock to repay debt, he steered the company through the aftermath of the dot-com bust and gained market share as rivals continued to struggle.
But BP seemed an odd destination for Mr. Svanberg, who is well known in Sweden but less so abroad. He had no experience in the oil industry and no track record in the United States. He succeeded Peter D. Sutherland, who was also an adviser to Goldman Sachs and known for his thick book of contacts.
BP said it liked Mr. Svanberg’s experience in emerging markets such as Russia and China, where he expanded Ericsson’s business.
Upon his appointment Mr. Svanberg said he was looking forward to the new job “with relish,” but recent comments suggest that the job did not turn out quite as expected. At a Zeitgeist Europe 2010 panel discussion in May, Mr. Svanberg said of his move into the oil industry, “I felt going into this industry should be a smooth ride.”
Hakan Wranne, an analyst at Swedbank, said it was “ironic” that Mr. Svanberg left Ericsson when things were finally more stable only to be dealing with one of the largest disasters in oil industry history. “I guess he never even in his wildest nightmares would have imagined this,” Mr. Wranne said. Mr. Svanberg declined to comment.
Some analysts attributed Mr. Svanberg’s low profile to different responsibilities associated with the role of chairman in Sweden, where holders of the post have been criticized for getting too involved in daily business.
Mr. Svanberg has proved that he is able to speak his mind, causing an uproar in Sweden in 2006 when he called for a change of government.
Others said that communications were never Mr. Svanberg’s forte. In fact, one bleak spot in his stint at Ericsson was when he issued a profit warning in 2007 just weeks after telling investors how well the business was doing. The shares tumbled and Ericsson lost about $16 billion of its market value.
In a call with BP shareholders this month, Mr. Svanberg said that cleaning up the spill in the Gulf of Mexico, which he has visited twice since the explosion, was the board’s “top priority, along with rebuilding trust and confidence in BP.”
“These events have shocked us all,” he said. “We deeply regret and we are sorry for this tragic accident and its aftermath.”
Apart from his position at BP, for which he receives about $1.1 million in annual salary, Mr. Svanberg is an adviser to The Earth Institute, a nonprofit organization whose staff are among those warning that BP underestimated the amount of oil escaping the well.
Born in the small town of Porjus, Sweden, within the Arctic Circle, Mr. Svanberg enjoys outdoor activities and is an ice hockey fan; he sits on the board of Stockholm’s Djurgardens IF Hockey club. With Mr. Hayward, he shares a passion for sailing.
On Wednesday at the White House, both men will have a chance to test their skills of steering through turbulent waters.