BP 2015 Annual Report Download - page 68

Monitoring
All meetings include a report from the chair of each committee that has
met since the last meeting. These are supplemented with feedback on
board and committee site visits, including a ‘deep dive’ on exploration at
the upstream learning centre in Sunbury in May.
The board monitors employee opinion via an annual pulse survey which
includes measurement of how the BP values are incorporated into daily
culture around our global operations.
The board received an update in December on BP’s reputation in the US
and UK compared with competitors, based on the results of our 2015
reputation research across a number of consistent reputational attributes
measured over time.
Strategy
The board discussed strategy or strategic elements at every full meeting.
The board also reviewed the BP Energy Outlook, updated in February 2015,
which looks at long-term energy trends and develops projections for world
energy markets over the next two decades.
In January the executive team presented the 2015 annual plan to describe
how the strategy should be implemented. The board met for two days in
Houston in September to review the strategy in depth.
Risk
During the year the board, either directly or through its committees,
regularly reviewed the processes whereby risks are identified, evaluated
and managed. The effectiveness of the group’s system of internal control
and risk management was also assessed.
The board considered the allocation of group risks between the monitoring
committees (the audit, SEEA, and Gulf of Mexico committees, and from
September, the geopolitical committee) and the board itself, and confirmed
the schedule for oversight of these risks. The group risks reviewed by the
board during 2015 included risks associated with the delivery of major
projects★, particularly in the Upstream, and geopolitical risk associated
with BP’s operations around the world. For 2016 the group risks allocated
to the board for review include financial resilience (which examines how
the group is able to respond to a volatile oil and gas price environment) and
cybersecurity (with the audit committee and SEEAC reviewing elements of
cybersecurity risk in their work over the year). The group risks allocated to
the committees for review over the year are outlined in the reports of the
committees on pages 68-72.
Further information on BP’s system of risk management is outlined in Our
management of risk on page 51. Information about BP’s system of internal
control is given on page 93.
Performance
The board reviews financial and operational performance at each meeting.
It receives regular updates on the group’s performance for the year across
a range of metrics as well as the latest view on expected full-year delivery
against external scorecard measures. Updates are also given on various
components of value delivery for BP’s business.
The board reviews the quarterly and full-year results, including reviewing
shareholder distribution policy. Both the 2014 and 2015 annual reports
were assessed in terms of the directors’ obligations and appropriate
regulatory requirements.
• Low oil price environment.
• Geopolitical influences.
• Climate change.
• Long-term technology view.
• Economic and competitor outlook.
• Organizational capability.
Board focus in 2015
• Chief executive’s report.
• Group performance report.
• Group financial outlook.
• Effectiveness of investment review.
• Quarterly and full year results.
• Shareholder distributions.
• Feedback from committees.
• BP brand and global reputation.
• Ethics monitor report.
• Process safety expert report.
• Employee survey results.
• Board evaluation.
.
• Group risk process.
• Identification and allocation of risks to
the board and committees for 2016.
• Major projects delivery risk.
• Geopolitical risk.
Strategy Performance
Monitoring
Risk
Board activity
The board’s activities are structured to enable the directors to fulfil their role,
in particular with respect to strategy, risk, performance and monitoring.
BP Annual Report and Form 20-F 201564