Leadership Under Fire: Lessons from Darren Woods

This article was written by Jack Balagia, Executive Director, KBH Energy Center, University of Texas at Austin

When I sat down with ExxonMobil CEO Darren Woods at the KBH Energy Center Symposium in Austin earlier this month before a crowd of 600 energy industry professionals and University of Texas students, I was reminded of something seen in leaders across all disciplines: the true test of conviction is not when the wind is at your back, but when the storm is raging.

For Woods, that storm was 2020. ExxonMobil’s stock price plunged to its lowest point in a generation. The company posted its first annual loss in decades. Upstart activist investor Engine No. 1 won seats on the board. And, perhaps most symbolic of all, the company was removed from the Dow Jones Industrial Average after nearly a century. Pundits were openly predicting that Woods, only four years into the job, would soon be shown the door.

It was in that moment, however, that Woods made a choice to hold firm. While others were scaling back investment in oil and gas, he doubled down. “We knew that when the pandemic was over,” he told the packed house, “the demand would pick up again, and the supply wouldn’t be there. Our intent was to be ready when the demand was needed, when it came back, that we had the supply.”

That kind of conviction is rare, particularly in an era when public companies live under the relentless pressure of quarterly earnings and activist shareholders. As Woods described it, “They [Engine No. 1 directors] came in, and I think with an agenda to find a problem. … Rather than moving more towards the electrons or the environmentalist platform, they strengthened the things that we were already doing that made the board even tighter.” To me, that exchange said as much about leadership as it did about ExxonMobil. Woods opened the books, invited scrutiny, and stood by his strategy. Not every CEO would.

Of course, Woods’ positions also spark debate. On climate, for example, he pushed back against what he called a “misperception” that ExxonMobil is not committed to finding solutions. “That is absolutely false,” he said. His view is that meaningful progress requires “involving the people who best understand the energy system,” and he believes hydrocarbons will remain essential well into the future. “You wouldn’t have cell phones, you wouldn’t have electric vehicles, you wouldn’t have laptops, you wouldn’t have medical equipment, you wouldn’t have medicines without hydrogen and carbon molecules.”

That is not a universally popular perspective, especially in environmental circles. But it is one that forces us to confront the complexities of the so-called energy transition. Woods reminded us that emissions, not fuels, are the issue, that innovation in carbon capture, hydrogen, and new materials is happening alongside traditional oil and gas—and that society’s future demands, not government mandates, will ultimately determine the shape of companies like ExxonMobil.

He was particularly blunt on the role of government policies to pick technologies or solutions. “Nobody’s smart enough to do that. Government certainly is not; our company is not.” Instead, he says, “government policies should focus on what you’re trying to achieve, not how best to achieve it.” And he offered a memorable analogy on responsibility for carbon emissions. “The analogy that I used would be like making McDonald’s responsible for the weight of their customers. We can’t do that.”

As an interviewer, what struck me most was not just Woods’ views on the energy business, but his insistence on the universality of leadership principles: clarity of vision, willingness to stand alone, and trust in fundamentals when others are ready to abandon them.

In fifty years, he predicts ExxonMobil will look both familiar and different. “The ultimate shape of our company and the products that we make will be determined by how society evolves and what products or what needs develop in demand. I also believe very firmly that we’ll be in a lot of new markets and new materials, new products and generating very healthy returns on those.”

The interview left the industry crowd thinking less about ExxonMobil specifically and more about the broader lesson. Leaders do not get to choose the crises that define their tenure. They do, however, choose whether to meet those crises with short-term expediency or with long-term conviction.

In 2020, Darren Woods chose conviction. Time will tell what history makes of that decision. But the story he shared with us in Austin is a reminder of the resilience, debate, and innovation that will shape the energy future.