BP 2010 Annual Report Download - page 92
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Please find page 92 of the 2010 BP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Corporategovernance
Board performance report
Dearshareholder
ThetragiclossoflifeontheDeepwaterHorizonandsubsequenteventsin
theGulfofMexicodominatedtheworkoftheboardovertheyear.The
followingreportdescribeshowyourboardaddressedtheimmediate
crisiswhileworkingtoensureacomplex,globalbusinesscontinuedto
operateeffectively.
Ibelievetheboardrespondedstronglyduringthecrisis.Ourrst
prioritywastoprovidetheguidance,resourcesandsupportrequiredbyour
responseteamsintheGulfofMexico.Wemetasafullboardon25
occasionsduringtheyear.AdedicatedGulfofMexicocommitteewas
formedtoenabletheboardtorespondquicklyandappropriatelyasevents
unfolded.Duringthesummer,thechairsofthecommitteesandImet
regularlytoensureworkwasco-ordinatedandtherightissueswerebeing
addressedinatimelyway.
Thereremainsmuchfortheboardtodo.Wearegivingparticular
attentiontothewaysinwhichthecompanyappliesthemanylessons
learned,inparticularintheprocesssafetyarea,andmeetsitsongoing
commitmentsintheUS.Wearealsoworkingwiththeexecutiveteamto
ensureBPpursuesaclearstrategicdirectionthatiswellmatchedtofuture
opportunitiesandchallenges.
Therehasbeensignicantchangeontheboard.Fivenew
non-executiveshavejoinedoverthepast12monthsandwehaveanew
groupchiefexecutive.Theboardisastrongandunitedteamwithabreadth
ofexperiencethatwillservethecompanywell.
EventsintheGulfofMexicorepresentawatershedforthe
company.Intermsoftheboard,itisessentialthatweemploythemost
effectiveprocessesandgovernancemechanisms,andIamleadinga
reviewofthestructuresandtoolsthatwereinplaceduring2010.Wewill
examinetheresultsofourboardandcommitteeevaluations,whichare
describedinthisreport.Wewillcarefullyconsidertheconstructive
feedbackIhavereceivedfromshareholdersandothers.Ourgoalistobea
boardthatnotonlyrespondstotheissuesofthepastbutthatalso
anticipatesthechallengesofthefutureasBP’sbusinesschangesand
evolvestothedemandsofaglobalorganizationinthetwenty-rstcentury.
Ilookforwardtoreportingtoyouonthisinthefuture.
WearerequiredtocomplywiththenewUKCorporateGovernance
Codefromnextyear.Toensurewemeetstandardsofbestpracticewe
havealreadyadoptedtherequirementsofthenewCodeasthebasisfor
assessingtheBPboard’sperformance,inadditiontocomplyingwiththe
June2008CombinedCode.
Finally,Iwanttoemphasizetheimportancetheboardplaceson
trustandtransparency.Itisrightthatweshareourthoughtsandactions
withyou,andwewilluseallappropriatechannelsofcommunicationto
providetimelyandhelpfulinformation.
Iwouldliketotakethisopportunitytothankallofmycolleaguesfor
theirtimecommitmentandsupportduringtheyear.
Carl-Henric Svanberg
Chairman
BP’s governance framework
TheBPboardworkswithinaclearframeworkdescribedinitsgovernance
principles.Thesedescribetheboard’srole,howitoperates,howitrelates
toexecutivemanagementandthemaintasksofitscommittees.Theseare
availableonthecorporategovernancepageofourwebsite.Inallitswork
theboardhastoconsiderspecicissues–includinghealth,safety,the
environmentandBP’sreputation.Putsimply,theboardneedstosetthe
righttonefromthetop.
Ourmainareasoffocusare:
• Activeconsiderationoflong-termstrategy.
• Monitoringexecutivemanagementandtheperformanceofthecompany.
• ObtainingassurancethatmaterialriskstoBPareidentiedandthat
systemsofriskmanagementandinternalcontrolareinplacetomanage
suchrisks.
• Boardandexecutivemanagementsuccession.
Wekeeptheboardgovernanceprinciplesunderregularreviewandwe
considertheireffectivenessaspartoftheannualboardevaluation.
Board activities in 2010
Overtheyear,theboardmet25timesaswerespondedbothtoeventsin
theGulfofMexicoandsubsequentlyinthenancialmarkets,meetingat
leastweeklyasthecrisisdeveloped.Theboardhadtoorganizeitsworkto
respondtothecrisiswhileensuringtheotherpartsofthecompany
continuedtoperform.DuringthesummerweformedtheGulfofMexico
committeewhoseprimaryresponsibilitywastheoversightoftheGulfCoast
RestorationOrganizationandwhoseworkisdescribedfurtherinthisreport.
Withtheexceptionofthetwonon-executivedirectorswhojoined
theboardinNovember,eachnon-executivedirectorhasvisitedtheGulfof
Mexicoatleastonce;thechairmanandthechairofthesafety,ethicsand
environmentassurancecommittee(SEEAC)havemademorefrequent
visitsandtheGulfofMexicocommitteeheldmeetingsintheUS.
GulfofMexico
Theboardidentiedsevenprioritiesinitsresponsetothecrisis:
1. Containment and clean-up of the spill
Theboardmonitoredthecompany’sworkincontainingthespilland
subsequentlycappingthewell.TheboardreceivedregularupdatesfromBP
managementandwaskeptindailycontactasthecompanyrespondedto
thespillincleaningthebeachesandworkingwithaffectedcommunities.
Throughthegroupchiefexecutive,theboardwaskeptappraisedofthe
workoftheUniedCommandintheUS.Theboardisstillmonitoringthis
workthroughtheGulfofMexicocommittee(seebelow).
2. Claims
Thecompany’scommitmenttomeetlegitimateclaimswasagreedtoand
isbeingmonitoredbytheboard,whoreceivedupdatesonthenumberand
quantumofclaimspaidbythecompanyandthetimetakentoprocess
claimsreceived.TheboardapprovedtheproposaltoappointKenneth
Feinbergtodischargethetrustfundandagreedtothefund’stermsand
structure.OversightofBP’sactivitieswithrespecttotheGulfCoastClaims
Facility,theDeepwaterHorizonOilSpillTrustandresponsetonesand
penaltiesispartoftheremitoftheGulfofMexicocommitteeand,going
forward,thecommitteewillmaintainitsmonitoringofthisareaandreport
thisbacktotheboard.
Theboardalsodiscussedandapprovedthesettlementwiththe
WhiteHouseontheestablishmentofthetrustfund,believingthiswould
reinforcethecompany’sstatedcommitmenttohonouralllegitimateclaims
arisingfromtheincident.
90BPAnnualReportandForm20-F2010