BP, the British energy giant, recently announced the appointment of Murray Auchincloss, the company’s CFO since July 2020, as interim CEO following the resignation of Bernard Looney. This move has sparked the question of whether CFOs can effectively step into the role of CEO, particularly when it comes to strategic decision-making.
Auchincloss’s appointment as interim CEO may be indicative of his strategic capabilities within the organization. He has held various financial leadership roles during his tenure at BP and is seen as well-suited to taking on the role of CEO, at least in the short term. The company has also named Kate Thomson, currently the VP of finance for production and operations, as interim CFO. Thomson’s appointment marks a significant milestone as the first woman to hold the CFO position at BP.
While Auchincloss and Thomson assume their new roles, BP is conducting an external search for a permanent CEO. The company has not provided a timeframe for this appointment, suggesting that Auchincloss may be at the helm of the company’s strategic initiatives for some time.
The effectiveness of CFOs as interim CEOs depends on their strategic capabilities and how they are perceived by the board. Some companies still view CFOs as “chief accountants” rather than strategic business partners. In those cases, the CFO may not be considered for an interim CEO position. However, in industries where CFOs have successfully stepped into the CEO role, they often return to their CFO position once their term as CEO is completed.
BP’s C-suite shakeup comes after an investigation into personal relationships that Looney had with colleagues prior to becoming CEO. While no breach of the company’s code of conduct was found, Looney acknowledged a lack of transparency about these relationships. The company has yet to decide on any compensation payments to Looney.
In terms of BP’s strategic goals, Auchincloss has assured staff that they remain unchanged. This includes a focus on performance and a commitment to a net zero energy transition by 2050. BP aims to reduce emissions from its oil and gas production by 20%-30% by 2030 and had plans for increased investment in oil and gas projects.
It remains to be seen how Auchincloss will navigate the challenges of leading BP as interim CEO. His strategic capabilities and his ability to steer the company towards its goals will determine the effectiveness of CFOs as interim CEOs in the eyes of the board and the industry at large.