Small gaffe, big generosity
Q: BP chairman Carl-Henric Svanburg asserted today that his company "cares about the small people," yet the company has also decided to suspend payment of its quarterly dividend, a move that is sure to hurt small shareholders. How can a leader effectively convey empathy to constituents when he or she is not able to please them all?
I'm not usually one to feel sympathy for execs like Svanberg who are responsible for such a massive disaster. But I can't help but think that the "small people" line may well have been lost in the translation. Most importantly I hate to see his gaffe overshadow the fact that BP has now stepped up to put $20 billion dollars in escrow and has given Kenneth Feinberg, who oversaw a similar fund for victims of Sept. 11, the ability to dole it out to those in need. This is unprecedented, a very, very noteworthy development.
When was the last time you saw a large corporation whose actions have caused significant damages start making payments - well before endless lawsuits have established the amount of liability and created an administrative claims process? Did Toyota? ExxonMobil? Union Carbide after Bhopal?
I have less sympathy for the shareholders. Investing in the stock market by definition involves risk, calculated risk perhaps, but risk nonetheless. In this case, the shareholders' bet on BP has gone south but they assumed that risk when they bought the stock and can sell their stock whenever they please. The fisherman and coastal landowner now awash in oil has no similar options.
Posted by: pdt278 | June 19, 2010 10:41 AM
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