BP 2008 Annual Report Download - page 74

Board performance and biographies
BP Annual Report and Accounts 2008
BP board performance report
Internal audit
The general auditor attends each committee meeting at the invitation of
the audit committee chairman. With the retirement of the general auditor
in early 2008, a new general auditor was appointed following an
externally facilitated recruitment process.
During the year, the audit committee evaluated the performance
of the internal audit function and agreed to the proposed programme of
work for the year (being satisfied that it appropriately responded to the
key risks facing the company and that the function had adequate staff
and resources to complete its work).
In 2008, the committee met once with the general auditor in a
private session without the presence of executive management. In
addition, the general auditor met with the chairman of the committee
from time to time between meetings.
Fraud and employee concerns on financial matters
The audit committee received an annual certification report from the
group compliance and ethics function, together with quarterly reports
that highlighted financial issues raised through OpenTalk, the group-wide
employee concerns programme.
The committee further received quarterly updates from internal
audit on instances of actual or potential fraud.
Audit committee activities
Approximate allocation of agenda time in 2008*
4% 34%
26%
36%
Financial reporting
Monitoring business risk
Internal controls and audit
Other agenda items *Excludes time spent on site visits
Committee performance evaluation
The committee conducts a yearly evaluation of its performance through
one-to-one interviews or questionnaires. The results are collated and
reported by the committee secretary. Actions taken in 2008 as a result of
the end 2007 evaluation included participation in an externally facilitated
training session and improved tracking of outstanding issues. In addition,
the committee considers performance during its private sessions
throughout the year.
The 2008 evaluation was conducted through individual interviews
and the outcomes discussed by the committee in January 2009. The
forward agenda for the year ahead was set following this review, and
consideration was given to building on the training provided to members
through site visits.
The audit committee plans to meet 13 times during 2009.
Safety, ethics and environment assurance committee report
Membership
The committee consists solely of independent non-executive directors
who have been selected to provide a wide range of operational and
international expertise appropriate to fulfil the committee’s duties.
Members of the safety, ethics and environment assurance committee
(SEEAC) during 2008 were Antony Burgmans, Sir William Castell and
Sir Tom McKillop. Dr Massey retired as chairman of SEEAC in April 2008
and Sir William Castell became the committee chairman from that date.
Cynthia Carroll joined the committee in June 2008. Support was provided
by the committee secretary, David Pearl (deputy company secretary).
Attendance
SEEAC met eight times during 2008.
SEEAC meetings SEEAC meetings
eligible to attend attended
Sir William Castell (chairman) 8 8
A Burgmans 8 8
C B Carroll 3 2
Sir Tom McKillop 8 8
Dr W E Massey (former member) 4 4
In addition to the above members, each SEEAC meeting is attended by
the lead partner of the external auditors (Ernst & Young) and the BP
general auditor (head of internal audit) on the invitation of the committee
chairman. The group chief executive also attends committee meetings as
the executive liaison with SEEAC: Dr Hayward attended all eight
meetings of the committee in 2008. The committee holds private
sessions without executive management in attendance at the end of
each meeting.
Role and authority of the committee
The main tasks and requirements for SEEAC are set out in the
principles and include among others:
• Monitoring and obtaining assurance on behalf of the board that the
management or mitigation of significant BP risks of a non-financial
nature is appropriately addressed by the group chief executive.
• Reviewing material to be placed before shareholders that addresses
environmental, safety and ethical performance and make
recommendations to the board about their adoption and publication.
• Reviewing reports on the group’s compliance with its code of
conduct and on the employee concerns programme (OpenTalk) as it
relates to non-financial issues.
Information
The committee receives information and reports from the safety and
operations function, internal and external sources, including internal audit
and the group compliance and ethics function. Staff from Ernst & Young
attend if appropriate to a particular business or activity review.
Like BP’s other board committees, SEEAC can access
independent advice and counsel if it requires, on an unrestricted basis.
The wider board is kept informed of the activities of the committee and
any issues that have arisen through the regular update given by the
SEEAC chair after each meeting.
Training and induction
Members of the committee receive ongoing training to assist them in
carrying out their duties and an induction programme was provided for
Mrs Carroll on joining the committee.
To develop a deeper understanding of BP’s business and
operations, Sir William Castell undertook a number of private briefings
and several site visits on becoming SEEAC chairman. These visits
included the Texas City refinery, where progress in implementing the
recommendations of the Panel was observed and to the North Sea ETAP
platforms where safety, operational and environmental management on
an offshore production facility were reviewed.
Committee activities in 2008
The chart at the end of this section shows how SEEAC allocated its
agenda time in 2008.
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