BP 2013 Annual Report Download - page 73

Corporate governance
BP Annual Report and Form 20-F 2013 69
Governance overview
Introduction from the chairman
I am pleased to describe the work of the BP board and its committees in
2013. This is the end of the fourth year in which I have had the privilege to
chair the board of BP.
In this time I have been fortunate to work with a group of directors who,
through the board and its committees, have made a significant contribution
to the rebuilding of the company. While we have made good progress, we
still have work to do.
In 2013, with some of the areas of uncertainty from 2012 behind us, we
began to determine how the board would function in the future.
Shareholders will see that the number of meetings of the board and the
committees has appropriately decreased since 2012. We are moving to
what we hope will be a more established rhythm. During the year, the
nomination committee carried out a detailed review of current board skills
and the needs of the board in terms of knowledge, expertise and diversity
over the coming years. As part of this review directors were asked how the
board should operate in future. In January, as part of the 2013 board
evaluation, we reviewed this work in the context of the results of the
evaluations over the past three years.
In looking at the past year I would like to highlight just some of the areas
upon which we have focused. In 2011 the board agreed the 10-point plan,
setting a clear strategy for the company and determined the measures by
which that strategy should be evaluated. We want to be judged on the
value we generate for our shareholders and not the volume of
hydrocarbons that we produce. To do this we have to invest our capital
wisely and be clear on how we will execute our projects so that value is
maximized. All of this needs to be done without compromising on safety.
So safety, strategy, project selection and project execution have been at
the forefront of our discussions as a board.
I believe that we use our committees effectively to carry out the required
oversight and governance of risk. The Gulf of Mexico committee has
continued to work to cover the wide range of litigation in which we remain
involved as a result of the Deepwater Horizon accident. This allows the
board to focus on key areas of strategy. The SEEAC visited several
operations to evaluate our safety culture and implementation of operational
standards.
As a board we focus on the delivery of long-term value to our shareholders,
but given the nature of our business we must do so in a way that is
sensitive to the societies in which we work. This means setting values and
standards of behaviour both inside and outside the company.
Fair, balanced and understandable
During the year, the board considered the changes to the UK Corporate
Governance Code in the context of BP’s governance practices. One of
these changes has been the requirement for directors to make a statement
that they consider the annual report and accounts, taken as a whole, to be
fair, balanced and understandable.
As part of our considerations, we received an early draft of the annual
report to enable time for review and comment. The audit committee and
the SEEAC then met jointly to consider the criteria for a fair, balanced and
understandable annual report and to review the processes underpinning
the compilation and assurance of the report, in relation to financial and
non-financial management information.
Following the joint meeting of the committees, the board then considered
the annual report and accounts as a whole and discussed the tone, balance
and language of the document, being mindful of new UK reporting
requirements and consistency between the narrative sections and the
financial statements. In evaluating whether the report is fair, balanced and
understandable, the board reviewed the internal processes that form the
group’s reporting governance framework, including the role of the
corporate reporting steering group, the use of content owners, and legal
and auditor review. The board’s statement on the report is outlined on
page 116.
It has been another challenging year, but one where the board has
continued to work well and learn. I look forward to 2014.
Carl-Henric Svanberg
Chairman
Safety, strategy, project selection and project
execution have been at the forefront of our
discussions as a board.