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Identify BP’s stakeholder involved in the Deepwater Horizon drilling project and the degree to which they are visable and important to the project (stakeholder salience).

1. Identify BP’s Stakeholders in the Deepwater Horizon Drilling Project and Assess Their Salience

Stakeholder salience refers to the degree to which stakeholders are visible, important, and able to influence the project, as defined by Mitchell, Agle, and Wood’s (1997) framework, which evaluates stakeholders based on power, legitimacy, and urgency.

Key Stakeholders and Their Salience:

Stakeholder	Degree of Visibility & Influence	Stakeholder Salience (Power, Legitimacy, Urgency)
BP (British Petroleum)	Most visible and influential—as the principal operator and primary financial stakeholder.	High: BP had power (decision-making authority), legitimacy (as the project owner), and urgency (due to financial and reputational risks).
Transocean (Owner of Deepwater Horizon rig)	Moderately visible—owned the drilling rig but did not directly oversee BP’s safety policies.	Moderate to High: Had power over rig operations but limited direct authority over BP’s decisions.
Halliburton (Provided cementing services)	Less visible to the public but crucial in safety procedures.	Moderate: Limited power, but legitimacy in ensuring well stability.
U.S. Government (e.g., MMS - Minerals Management Service)	Highly visible due to regulatory authority over offshore drilling safety.	High: Had legal legitimacy and regulatory power, but their weak enforcement before the disaster reduced their effectiveness.
Local Communities & Fishermen	Became highly visible after the disaster, facing economic and environmental consequences.	High post-crisis: No direct power pre-crisis, but urgent claims post-crisis due to oil spill damage.
Environmental NGOs (e.g., Greenpeace)	Visible post-crisis, exerting pressure on BP through advocacy and legal actions.	Moderate to High: Strong legitimacy but limited enforcement power.
BP’s Shareholders & Investors	Visible, as financial stakeholders in BP’s success.	High: Had financial power, influencing BP’s policies post-crisis.
General Public & Media	Highly visible after the spill due to widespread reporting and backlash.	Moderate to High: No legal power but strong influence through public opinion.

Analysis:

Before the disaster, BP, Transocean, and Halliburton were the most powerful stakeholders, while regulators (MMS) had a weaker role due to lenient oversight.
After the disaster, local communities, media, and environmental organizations gained influence, forcing BP to respond.
This event highlighted poor stakeholder engagement, as BP prioritized cost-cutting over safety, leading to the explosion and oil spill.

Analyse BP’s corporate governance model refers to the core principles of good corporate governance

2. BP’s Corporate Governance Model and Core Principles of Good Governance

BP operates under a shareholder-oriented corporate governance model, balancing financial performance with legal and ethical responsibilities.

Core Principles of Good Corporate Governance in BP’s Model

BP’s governance is evaluated using the OECD’s corporate governance principles:

Principle	BP’s Approach (Pre- and Post-Deepwater Horizon)
Transparency & Disclosure	Before the spill, BP had limited transparency about safety risks. After the spill, it improved reporting standards (e.g., sustainability disclosures, risk assessments).
Accountability	BP’s board of directors and executives were responsible for corporate decisions. However, poor risk management pre-crisis led to weak accountability. Post-crisis, BP restructured oversight of safety protocols.
Risk Management & Internal Controls	BP lacked a robust safety culture pre-crisis. After the disaster, it introduced the Safety and Operational Risk (S&OR) organization to improve risk management.
Fair Treatment of Stakeholders	Pre-crisis, BP prioritized cost-cutting over stakeholder safety. After the spill, it compensated affected communities and enhanced environmental commitments.
Board Effectiveness & Independence	BP’s board had limited oversight over safety, favoring financial goals. Post-crisis, governance reforms emphasized independent oversight and safety committees.

Analysis:

BP failed to uphold corporate governance best practices before the Deepwater Horizon spill, especially in risk management and accountability. Post-disaster reforms attempted to restore credibility and align governance with ethical and safety standards.

What should Bob Dudley enforce for BP’s security and safety standard? Just mere compliance or a single very strict set of standards applied worldwide

3. Should Bob Dudley Enforce Mere Compliance or a Strict Universal Safety Standard?

Bob Dudley, who took over as BP’s CEO after the disaster, faced a critical decision: whether to adopt a minimum compliance approach or a globalized, uniform, and strict safety standard.

Comparison of the Two Approaches:

Approach	Pros	Cons
Mere Compliance (Minimum Standards in Each Country)	- Legally sufficient, ensures BP follows local laws. - Cost-effective, avoids unnecessary spending.	- Regulatory loopholes: Some regions have weaker laws. - Inconsistent safety culture, leading to future disasters.
Global Strict Safety Standard (One Worldwide Policy)	- Reduces risks by exceeding local legal minimums. - Strengthens BP’s reputation and restores stakeholder trust. - Avoids future litigation and long-term financial losses.	- Higher short-term costs due to restructuring and training. - Resistance from local subsidiaries adapting to stricter rules.

Recommendation:

Bob Dudley should enforce a strict, uniform safety standard globally, rather than relying on mere compliance with regional laws. This approach would:

Prevent future disasters by ensuring the highest level of safety worldwide.
Improve investor and public confidence, rebuilding BP’s reputation.
Align with corporate governance best practices, emphasizing risk management.

do you think that the MMS should take care of the micro-details of the safety standards? Use data from Table 3.

4. Should the MMS Regulate Micro-Details of Safety Standards?

The Minerals Management Service (MMS) was the U.S. government agency responsible for offshore drilling regulation before the Deepwater Horizon disaster.

Analysis of Safety Data in Table 3

Fatalities (Employees and Contractors)
- ExxonMobil (2010): 0 employee deaths, 3 contractor deaths.
- Shell (2010): 0 employee deaths, 12 contractor deaths (high).
- Shell (2009): 1 employee death, 19 contractor deaths (even higher).
🔹 Insight: Contractor fatalities are significantly higher than employee fatalities. This suggests that safety regulations for contractors may not be as strict or enforced as those for company employees.
Recordable Injury Frequency
- This metric is missing from the dataset but is critical for evaluating safety effectiveness.
Financial Implications
- Both ExxonMobil and Shell have high revenue and net income but fail to prevent contractor fatalities, implying that safety oversight is not directly tied to financial capacity.

Should the MMS Regulate Micro-Details of Safety?

YES – If MMS Enforces Stricter Standards for Contractors
- The data shows high contractor fatalities, meaning that outsourced labor faces more risks.
- MMS should set detailed, enforceable safety standards for contractors, rather than leaving it to companies' discretion.
NO – If MMS Lacks Proper Oversight or Resources
- If MMS cannot enforce micro-details properly, BP and other companies should establish internal global safety standards.
- Simply adding more regulations without enforcement will not prevent disasters.

Final Recommendation

The MMS should not micromanage every technical detail but should strictly enforce high-level safety standards, especially for contractors. This means: ✅ Requiring independent audits of safety compliance.
✅ Setting penalties for high contractor fatality rates.
✅ Shifting from a self-regulated model (which failed before Deepwater Horizon) to active enforcement.

decision making for economice sustainability -

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