BP has recently appointed new board members and shifted its focus toward oil and gas operations, reducing emphasis on low-carbon initiatives to boost its lagging stock performance. Opinions vary on this direction, but the relatively new chairman’s decision to block discussion on the topic was seen as excessive. Albert Manifold rejected a resolution proposed by the Dutch investor group Follow This for the company’s annual general meeting. The resolution was framed in terms favorable to investors and simply required BP to explain how it would safeguard shareholder value amid potential declines in oil and gas demand. Follow This is a significant player among climate-focused organizations, backed by investors managing $1 trillion in assets. BP consulted legal experts and determined the proposal invalid and ineffective if approved, though no specific explanation was provided. Speculation suggests it may relate to the resolution not qualifying as a special one needing 75% approval, but alternatives could have allowed it to proceed through negotiation. In contrast, Shell handled a similar resolution from Follow This for its upcoming meeting more openly. Shell’s chairman, Andrew Mackenzie, included the proposal in the agenda, providing space for the proponents’ statement and the board’s rationale for opposing it. Shell argued that its scenarios are not fixed predictions, are regularly updated, and that sufficient data on break-even points and demand risks is already available for investors to assess financial stability. BP could have adopted a similar transparent approach. Manifold’s firm stance appears to have prompted opposition to some of BP’s own proposals, including one to eliminate specific climate reporting requirements from 2015 and 2019, which the board viewed as redundant. That measure received only 47% support, short of the required 75%. A proposal to end in-person annual meetings also failed. Notably, 18% of votes opposed Manifold’s re-election, a poor outcome for a chairman’s debut. Legal & General Investment Management, a major shareholder, voted against him partly due to the exclusion of the Follow This resolution. Despite BP’s board featuring prominent non-executive directors like Aviva’s CEO Amanda Blanc and former Barclays finance director Tushar Morzaria, the handling of shareholder input raised concerns. Observers question if they advised against this tactic or if the company is overly centered on Manifold’s leadership. Ultimately, Manifold’s strategy of simplifying and strengthening BP likely enjoys majority shareholder backing, similar to Shell’s. However, allowing open debate and presenting counterarguments remains essential.
