BP 2012 Annual Report Download - page 126

Corporate governance
BP Annual Report and Form 20-F 2012
124
Committee evaluation
For its 2012 evaluation, the SEEAC again used a questionnaire
administered by external consultants to examine the committee’s
performance and effectiveness. The committee responded to the same
questions used in 2011 so that any change trends could be discerned. The
topics covered included the balance of skills and experience among its
membership, quality and timeliness of information the committee
receives, the level of challenge between committee members and
management and how well the committee communicates its activities
and findings to the board.
The evaluation results were positive. In particular the committee
members considered that the committee possessed the right mix of skills
and background, had appropriate support and had received open and
transparent briefings from management. The committee is keen to
maintain and, if possible, increase the number of field trips it makes and to
continue constructive and challenging engagement with management.
Gulf of Mexico committee
The committee oversaw the resolution of
numerous matters in the past year; each was
determined to be in the best interests of the
company and its shareholders.
Chairman’s introduction
The Gulf of Mexico committee met 23 times in 2012, with much of our
focus on legal topics. The committee oversaw the resolution of numerous
matters in the past year; each was determined to be in the best interests
of the company and its shareholders and consistent with the board’s
overall strategy of reducing key uncertainties.
Settlements have been approved with the Plaintiffs’ Steering Committee,
with regard to private economic and property damages claims, as well as
exposure-based medical claims stemming from the Deepwater Horizon
accident; and the company reached resolutions with the Department of
Justice and the Securities and Exchange Commission. The committee will
be overseeing the company’s compliance with government settlement
agreements arising out of the Deepwater Horizon accident, in co-
ordination with the other committees and the board as appropriate.
The committee has overseen the company’s strategy for resolving claims
not covered by the above settlements; its efforts to mitigate and monitor
the effects of the spill; and actions to restore the group’s reputation,
particularly in the US. We have received regular briefings on the company’s
preparations for trial on the various civil matters, including the multi-district
litigation in New Orleans.
Briefings on a broad range of topics have been provided to the committee
by the leadership and counsel of the Gulf Coast Restoration Organization
(GCRO). External counsel have also been invited to join some meetings.
The high frequency of our interactions has facilitated committee
members’ understanding of complex issues and interdependencies.
I believe the committee maintains a rigorous approach to its work,
providing effective oversight on behalf of the board. The report below
summarizes the activities of the committee in 2012. The committee is
well prepared to conduct its tasks over the coming year.
Ian Davis
Committee chair
Committee members
Ian Davis – committee chair
Paul Anderson
Admiral Frank Bowman (joined the committee 3 February 2012)
Sir William Castell (retired from the committee 12 April 2012)
George David
The Gulf of Mexico committee has cross-membership with both the
SEEAC and the audit committee, helping to inform discussions of matters
within the committee’s remit. Membership of the Gulf of Mexico
committee changed during 2012 and now includes three US-based
non-executive directors.
All meetings during the course of the year have been attended by Lamar
McKay, president and CEO of the GCRO in 2012, and Jack Lynch, chief
counsel to the GCRO. The chairman, group chief executive and group
general counsel join meetings whenever possible. Meetings are on
occasion joined by others including members of the leadership team of
the GCRO, as well as internal and external legal counsel.
Committee role and structure
The purpose of the committee is to provide non-executive oversight of
the GCRO; to oversee the management and mitigation of legal and
license-to-operate risks arising out of the Deepwater Horizon accident and
the subsequent response; and to support efforts to rebuild trust in BP and
BP’s reputation, with a particular focus on the US.
The committee’s work is fully integrated with that of the board on strategy,
reputation and financial planning. The committee chairman provides verbal
reports at board meetings, and all directors are invited, from time to time,
to attend and observe committee meetings. Meeting minutes are sent to
the board for review, and the board retains ultimate accountability for
oversight of the group’s response to the Deepwater Horizon accident.
The committee met 23 times in 2012, frequently by telephone and
sometimes at very short notice.
During the course of the year the committee focused on the following tasks:
t Oversee and receive regular reports on work undertaken to complete
the response and mitigate the effects of the oil spill in the Gulf of
Mexico area.
t Oversee the legal strategy for litigation, investigations and
administrative processes involving the group arising from the accident
or its aftermath.
t Oversee the strategy for resolving claims, recognizing the
independent role of first the Gulf Coast Claims Facility (GCCF) and
more recently the Deepwater Horizon Court Supervised Settlement
Program (DHCSSP).
t Oversee GCRO’s plans for expenditures and investments on major
projects or matters beyond those included within the above
referenced independent claims administration processes.
t Oversee management’s strategy and actions to restore the group’s
reputation in the US.
Committee processes
Information and advice
The committee receives its information from the leadership of the GCRO,
internal personnel and external advisers. Privileged briefings are provided
by the group general counsel and chief counsel to the GCRO, along with
internal and external counsel who often participate in committee
meetings. The committee received reports from internal audit on its
reviews of the GCRO and related activities. The audit committee remains
the primary forum for the monitoring of financial risk and audit matters
relating to the GCRO. Safety risks relating to the GCRO’s activities are
monitored by the SEEAC.