Problem:
Barrel Products Plc (BP) is an international energy company, providing its customers with fuel for transportation, energy for heat and light, and petrochemical products for everyday items. In the recent years, safety and environmental sustainability have become key strategic priorities for BP and its competitors. Consistent with these objectives, BP's current values read (from www.bp.com):
BP wants to be recognized as a great organization - competitively successful and a force for progress. We have a fundamental belief that we can make a difference in the world. We help the world meet its growing need for heat, light and mobility. We strive to do that by producing energy that is affordable, secure and doesn't damage the environment. BP is progressive, responsible, innovative and performance driven.
In response to the evolving competitive environment, the Board of Directors of BP has initiated the process to design a new performance evaluation system for the company's top executives. In particular, the board believes that BP's CEO, Tim Holmes, should be evaluated on BP's financial performance as well as its social and environmental responsibility, all three objectives weighted equally. The performance system should also incorporate measures of how "progressive, responsible, innovative and performance driven" the company is. You have been hired as a consultant to advise BP's board on the design of a triple-bottom-line balance scorecard to evaluate Tim Holmes.
Requirement:
- Describe the balanced scorecard you would recommend to BP's board. Clearly outline the target objectives and multiple measures of each objective, including leading and lagging indicators (provide objectives and measures in the form of a table). Justify the use of the identified objectives and measures.
- List and describe two potential challenges that BP could face in implementing the recommended balanced scorecard?
Additional Infromation:
This question belongs to the Finance and it explain about recommending balanced scorecard to BP's board, target objectives as well as multiple measures of each objective including leading as well as lagging indicators.