As BP chief executive, Lord Browne transformed the company from ailing enterprise to global success story. Resigning in 2007 after the media revealed his sexuality, he has now written a book about the experience and attitudes towards diversity in business. In this exclusive interview, he talks engineering, energy and equality
Keen to dispense with formality, Lord Browne of Madingley introduces himself to the Director team as John Browne and offers warm handshakes to everyone assembled for today’s cover shoot.
Stepping in front of the camera, he’s soon chatting to our stylist about his nomadic childhood (his father was an army officer), to our picture editor about his travels in Alaska (he was posted there in his early years at BP) and to our photographer about his latest ventures (“it’s a varied portfolio that needs careful managing”). There’s warmth in his eyes, good humour in his conversation and he is clearly at ease as the camera flashes away.
It’s a setting in marked contrast to the one that opens the first chapter of his book The Glass Closet: Why coming out is good business – which describes the moment in May 2007 when, having just resigned as chief executive of BP, he prepared to step out of the main entrance of the company’s headquarters to face the waiting cameras in London’s St James’s Square. “About 30 press photographers had spent the day waiting like vultures for their prey,” he writes. “My overwhelming desire to conceal my sexual orientation over four decades in the oil industry had culminated in this terrible juncture. My long-kept secret was about to be exposed and I was not going to hide any longer. I decided that I would leave through the front door.”
The journey from that moment to today, he tells us, has been full of surprises – the majority of them encouraging: “My worst fear was that I’d lose all my friends, I’d lose everybody,” he says. “And that turned out not to be the case. A lot of people rather publicly supported me and they still remain my friends.” The book, he says, is his way of offering support to others and is aimed at everyone in business: “If there’s one thing I want it to do, it’s to promote role models – people who’ve come out, who are successful, so others can say ‘well, I can be like that’. And it’s written as a letter to straight people to say ‘you have to make it safe for people who are different to come out and be themselves’, and that this makes good business sense.”
Browne, now 66, admits that he certainly wasn’t himself at work in his 41 years at BP – his reluctance to reveal his true self to colleagues affirmed by childhood cautions from his mother, an Auschwitz survivor, against opening up to others: “Having witnessed the worst of human nature, she was wary of trusting people,” he writes in the book. “‘Don’t trust people with your secrets,’ she told me from the time I was a child. It was a lesson I took to heart.” And it was a view that only intensified as he progressed at BP: “Navigating my way from trainee to chief executive had given me faith in my abilities and taught me to project self-assurance, almost to the point of seeming arrogant, but inside I concealed a deep unease…” he writes. “That feeling did not diminish as I rose through the ranks. I grew more scared the more senior I became because I felt I had more to lose.”
Reversal of fortunes
Those witnessing his impact at BP, though, would find it difficult to know the leader was troubled. Taking over as group chief executive in June 1995 after a period of contraction that culminated in the UK government selling its last remaining stake in the business, he began an era of expansion that is now considered the company’s golden age. He secured a crucial merger deal with rival Amoco, opened up access to Russian oil with the creation of the TNK-BP company and repositioned BP as a greener business investing heavily in renewable energy. Becoming a truly global player employing tens of thousands of people, the corporation quintupled its market value and at one stage accounted for one sixth of the money received in dividends by UK pension funds.
But does Browne believe he could have been an even more effective leader if he had come out earlier in his life? “A very close friend of mine once said ‘you are absolutely the most reserved person I ever came across’,” he says. “The reason I was reserved is because I never really talked about my private life, and I couldn’t, I wouldn’t, because I wasn’t out. And that made me not as warm a person as I wanted to be and that’s very important. The casualty for me was not my business life, it was my private life, and that, in the end, is not sustainable.
“There are many studies which show that the level of staff engagement directs the level of profitability of a company,” he continues. “Those with high staff engagement produce abnormal returns against the market. And staff engagement includes, among other things, people being themselves at work, which is about inclusion, and that’s about LGBT [lesbian, gay, bisexual and transgender] people. Some people are prepared, like I was, to put their private life in the ice box as it were, but fortunately that’s not what everybody wants to do because with a hidden life there’s a hidden cost.”
In the course of researching The Glass Closet, Browne says he was surprised at how many people in the UK and US were still fearful of being themselves at work: “They were, in a variety of ways, saying ‘we can’t come out in business because our peers will treat us differently, they’ll think it’s a weakness – clients and boards are very conservative and they won’t like it if we’re different’,” he says. “I found that surprising, because I thought I’d come from a different generation and that things had changed a lot.”
Pointing to the fact that there is only one out chief executive in the FTSE 100 – Burberry’s Christopher Bailey – and none in the S&P 500, Browne adds: “I still think without a doubt that there are plenty of leaders in the closet, statistically I think it’s very unlikely there isn’t a gay person there [in the S&P]… But business does move slowly in its acceptance of difference – you can see that with women in business. We’ve been working at diversity and getting women included for some time, but the outcome is not as good as you could expect by any means. LGBT inclusion is the next most difficult thing to do – I think that’s where we are at the moment and we’re ready for a breakthrough.”
What can directors do to bring about that breakthrough? “It requires leaders to be very clear that they won’t tolerate anything that doesn’t include LGBT people,” says Browne. “As CEOs we all say our people are our most important asset, but we don’t spend a most important amount of time on people, diversity and inclusion… The leader has to be the role model, to send out strong signals and test to see whether what he or she is saying is actually happening. Because otherwise it gets stuck in the middle – every manager I’ve ever worked with says, ‘John, you know I’ve got too many things to do, give me the priorities.’ So you have to say ‘here’s a priority I’m going to measure you on’.”
Looking to the future
After such a long, successful and lucrative career with one company, Browne could surely have been forgiven for easing off on his business commitments after his traumatic departure from BP (“I decided the right thing to do was resign when the story came out, no one pushed me to resign,” he says). But instead he relished the chance to start afresh: “I believed I had to start again and it was one of the best things that I did,” he says. “There were one or two not-for-profit things that carried on – but I started with a clean sheet of paper and said to myself ‘what can I contribute and what am I excited about?'”
Today, Browne is a partner at Riverstone Holdings – a private equity firm investing in the energy sector – and chairman of shale gas exploration business Cuadrilla Resources. Ennobled in 2001, he sits as a crossbencher and advises ministers on the appointment of non-executive directors to government department boards. In 2010, he chaired the independent review of higher education and student finance, and also holds the role as the government’s lead non-executive board member and chairman of the Tate Gallery’s board of trustees.
Engineering, however, remains Browne’s biggest business passion – he was president of the Royal Academy of Engineering between 2006 and 2011 and remains as chair of trustees for the Queen Elizabeth Prize for Engineering. And, while he is bullish about the nation’s capacity to compete on the world stage, he says the responsibility for producing the next generation of British engineers rests with businesses: “We’ve got some great talent, the UK is still very, very good at advanced engineering, software engineering, medical engineering, automotive engineering and so on. But we could be better at more things if we had more engineers,” he says.
“Companies must target people at school, encourage them to go and study engineering, and give them scholarships. It’s particularly important to target women, and in that regard it’s always important to talk to parents. I had a sense when I was president of the Royal Academy of Engineering that many parents tell their girls that engineering is not for girls, it’s for boys – and that automatically biases the sample, it gets rid of a great number of highly qualified people.”
The energy question
Underpinned by that engineering talent pool, what does Browne think the future of energy in the UK will be? He made headlines at the end of last year by saying shale gas could put “downward pressure” on energy prices. So, what does he think the balance of production methods will be in years to come? “We have to go for the lowest cost mix,” he says. “That is partly gas, party renewables and some longer term nuclear – which is very expensive but has to be there as part of the base load of electricity generation. If we can generate our own domestic gas business we won’t be shipping the money overseas, so it will help the balance of payments – it will also help employment and engineering. But the energy mix will keep changing – it’s got to be cleaner, and it’s got to be greener.”
Enthused and smiling throughout our interview, it’s clear that Browne is content with his new-look portfolio of interests and responsibilities. He’s healthier, too – deciding to quit smoking and that it was “time to get fit” after leaving BP. But how does he ensure he isn’t overwhelmed by a wider variety of commitments and what advice does he have for IoD members looking to add the extra responsibility of a non-executive position to their CVs?
“You’ve got to decide your balance of life, because you can take on too many things and then you’ve got to wind back,” he says. “The most important thing about taking on a non-executive role is making sure you’ve allocated enough time to it. Because you’re there to do things in good times and bad times, some underestimate the contingency of time they need to invest when something doesn’t work out well.”
And what advice does he have for getting the most out of a non-exec role? “Remember that you’re there to say what you think,” he says. “You are nobody’s person – you’re not the chairman’s person, you’re not the CEO’s person, you’re the shareholders’ person. However difficult it is you’ve got to speak your mind and you may have to disagree with people. It’s important to look at yourself in the mirror and say: ‘I am here to represent the shareholder, I’m here because of my skill, I’m here because I’ve got judgement and I’m here because I’ve got a voice…’ You need to understand how to work in a team where nobody works for anybody, as it were. A good experience is to try and do this in the not-for-profit sector where people, of course, don’t get paid and can walk out any minute – so they’re really trying to work with each other with no structure.”
On the subject of bringing together people from different backgrounds, what does he believe is the secret of a successful merger – something pivotal to his achievements in changing the fortunes of BP? “The single biggest problem – and I’ve made plenty of mistakes myself in this area – is the question of the dominant personality of one company over the other,” he says. “You’ve got to try to blend two cultures while focusing on getting business done in a better way – one plus one has to equal three, not two. So rigorously getting rid of one culture over the other is not a good idea, it always comes back to bite you in the end. The second thing is that any merger is, in the first instance, a project – and projects have rules about how they’re planned,” he continues. “You have to have a leader, a structure, timelines, clear objectives and measurements and do it as if you’re constructing a building, an oil rig or a tanker. And you’ve got to have parallel activity for dealing with the team that is probably uncertain about its future and building its confidence. Which comes back to our first theme, about sending the right signals of inclusion from leadership.”
An inclusive approach to leadership has clearly been a major weapon in Browne’s business armoury, long before his own experiences inspired him to pen The Glass Closet: “Yes, I like to think I’ve always worked through people and been a great believer in developing people – indeed a lot of the people in the leadership of BP today are people who worked for me for many, many years,” he says. “I’m keen to make sure that everybody who has the potential can win as a leader.”
And Browne is hoping that IoD members will join him in continuing to keep inclusion at the top of the business agenda – later this month he will be discussing his career and book with director general Simon Walker and an audience of IoD members at the 116 Pall Mall headquarters: “I’m looking forward to speaking to the IoD,” he says.
“It’s got a big membership of people who can actually make a difference in taking The Glass Closet and making it a movement as opposed to a book, and really get something done here.”