This article is taken from the April 2025 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.
We need to talk about death. Brits have long been diffident about mortality. Our coffins are not carried aloft in crowded streets. Our women don’t ululate. Our chaps don’t fire Kalashnikovs skywards. And open caskets are strictly for the morbid and superstitious Irish.
We are similarly reluctant to confront the ephemeral nature of our businesses. I am referring here to our large corporations. (Most small business founders I know are in a constant existential battle against their creditors and the HMRC.)
For some time, our mega-cap companies have been following strategies seemingly conjured by Hindu holy men. Capital markets days typically lead off with slides that resemble the great cycle of life. Instead of facing the awkward fact that their core business is in inexorable — though profitable — decline, CEOs forecast a cleansing rebirth into something else.
Wheezy British American Tobacco is promising a “better tomorrow” of buzzy caffeine drinks and fruity vapes. Unilever dumped its declining, but lucrative, margarine business in pursuit of its glossy vision of providing “positive beauty”.
The big beasts of corporate reincarnations have been our oil majors, Shell and BP. Each have been spending billions of pounds of shareholder money annually on wind, solar, biofuel and battery storage.
Both have ornate transition plans describing in nano-detail how they will pivot from their dirty, oil-smeared past to a freshly scrubbed future.
But then in February, BP’s chief executive Murray Auchincloss delivered a shocker of a strategy update. The Canadian announced he would be slashing investment in alternative fuels and refocusing on the core business of drilling and pumping.
Now, I don’t take sides in the great net zero debate. Frankly, I just don’t have time “do my own research”. But Auchincloss deserves credit for the simple reason that he has stared corporate death in the face. And, though his investor relations team would never put it this way, he has been brave enough to put BP on a palliative pathway.
Predictable, cash-generative decline is often preferable
He’s also displayed a rare humility. The plain fact is that oil businesses have never been very good at green energy. There is good money to be made — as Elon Musk has shown. However, all BP shareholders have to show for the billions invested are a stagnant share price and glossy reports with pictures of wind turbines bathed in a dawn light.
BP has some of the world’s greatest civil engineers, skilled at building gargantuan off-shore rigs and cavernous pipelines. But creating value in the green technology needs people expert in the sub-atomic world, developing better batteries to store the fickle electricity produced by the wind and sun. The idea that BP could do both these things well was always hubris.
I would like to think that Auchincloss’s big move will usher in a refreshing change in our corporate culture — but I fear that the cult of corporate immortality will be hard to shake.
It wasn’t always thus. Back in the 1980s and 1990s things were kept edgy by corporate raiders like James Hanson and Greg Hutchings, the CEO of the Smith and Wesson conglomerate Tomkins, who used to carry a handgun under his pinstripes. Boards always knew they were just one lazy decision away from a high-noon shootout they were fated to lose.
I can pinpoint the moment when the rot set in. It was the 1995 publication of Will Hutton’s The State We’re In. His notion of stakeholder capitalism began as a harmless thought experiment for Observer readers but soon became a mantra in every board.
We directors were no longer there to channel the animal spirits of the markets. Instead, we were supposed be servants of the workers and wider society.
Another guilty man is Simon Sinek, a former ad man originally from Wimbledon. His wildly influential 2009 book Start with Why elevated glib purpose statements at the expense of hard strategic trade-offs.
This kind of flabby intellectual environment discourages boards from confronting the fact that predictable, cash-generative decline is often preferable to the quixotic pursuit of growth through reinvention.
The newish breed of mainly American activist investors, who agitate for break-ups and cost-cutting, are the heirs to the Hansons and Hutchingses. And it was one of these activists, Elliott, who was responsible for giving BP the nudge it needed.
But it’s disappointing that too many boards still respond to their demands with passive aggressive foot-dragging, rather than making the necessary tough decisions before the activists pop up on the share register.
There are signs that the British are finally starting to talk about death — thanks to the recent parliamentary discussions on euthanasia. I can only hope there’s room for a similar public debate on which of our businesses should be dispatched to Dignitas.
