BP 2015 Annual Report Download - page 66

Introduction from the chairman
The membership and work of the board have continued to evolve during
2015. This has been driven by several factors, not least the challenging oil
price environment which now dominates our industry. In the years
following the Deepwater Horizon accident, the workload of the board, as I
have previously reported, increased substantially in response to the issues
with which the company was faced. While the number of our meetings
has decreased, we still face evolving challenges and I am grateful to Bob,
his executive colleagues and my fellow directors for the work that they
have done. The commitment required of all of us certainly has not reduced
with the number of meetings.
This means that we have to keep refreshed the way in which we work,
the matters that we discuss and the decisions that we take. It remains our
goal to keep our board time clear for strategic thinking while asking the
committees to undertake much of the core tasks of monitoring and
oversight. We need to ensure that we have the right skills round the board
table to carry out these tasks.
External interest in what boards do increases year on year and it is for this
reason that we set out, in the following detail, a description of our
activities. Our agendas are prepared in such a way that we have the time
to discuss the key issues of the moment without affecting the proper
oversight of those matters with which we have to deal. As will be seen
from the reports of the committees, directors have visited a number of
BP’s facilities during the year. This is a key part not only of building our
understanding of the business but also testing the mood and the morale
of our people in these difficult times.
As we look to the future, it is vital that the work of the board evolves with
the business. We cannot be working to one rhythm while the business
works to another. It is all too easy for a board to work to a historic schedule
created to address past challenges. For this reason I am pleased that this
year we have carried out a fully externally facilitated evaluation. We are
reflecting on the conclusions which are set out elsewhere; it is important
that we keep on learning. However, behind all of this an effective board
has to keep asking itself two key questions: are we talking about the right
things and are we adding value?
It is some time since we reviewed our governance policies. We will be
doing this in 2016. The results of our evaluation will be part of this
process. Prompted by changes to the Governance Code, we have further
focused on risk and our systems of internal control. This has been a
valuable process for the board. After what seems almost annual changes
to the Code, I welcome the FRC’s decision that this will not be reviewed
again until 2019, enabling the UK governance landscape to settle and
establish. I am however looking forward to BP being able to contribute to
the FRC’s work on succession and culture, which both remain key issues
for any board.
Carl-Henric Svanberg
Chairman
It is vital that the work of the board evolves
with the business. We cannot be working
to one rhythm while the business works
to another.
BP governance framework
Owners/shareholders
Strategy/group risks/annual plan
Group chief executive’s delegations
Nomination
committee
Remuneration
committee
Chairman’s
committee
Gulf of Mexico
committee
SEEAC
Geopolitical
committee
Audit
committee
Resource
commitments
meeting
(RCM)
Group people
committee
(GPC)
Group
disclosure
committee
(GDC)
Group financial
risk committee
(GFRC)
Group
operations risk
committee
(GORC)
Group ethics
and compliance
committee
(GECC)
BP board
Group chief executive
Executive management
Monitoring,
information
and assurance
Group audit
Finance function
Safety and
operational risk
function
Group ethics and
compliance function
Business integrity
function
External market
and reputation
research
Independent adviser
Independent advice
(if requested)
Delegation
Accountability
BP board
governance
principles:
• BP goal
• Governance process
• Delegation model
• Executive limitations
Delegation
Accountability
Delegation of authority
through policy with
monitoring
Assurance through
monitoring and
reporting
Independent auditor
BP Annual Report and Form 20-F 201562