BP 2012 Annual Report Download - page 115

Corporate governance
Corporate governance
BP Annual Report and Form 20-F 2012
113
Appointment and tenure
The chairman and our non-executive directors (NEDs) serve on the basis
of letters of appointment. Letters of appointment (and service contracts
for our executive directors) are available for inspection at the registered
office of the company. BP does not place a term limit on director’s service
as it proposes all directors for annual re-election by shareholders (a
practice followed since 2004).
Board tenure as at 31 December 2012
1
2
31. 0-3 years 8 NEDs 73%
2. 4-6 years 2 NEDs 18%
3. 7-9 years 1 NED 9%
Antony Burgmans joined the board in February 2004 and by the 2013
AGM will have served nine years as a director. The board has asked him to
stay on for an additional three years as it believes that his experience as
the longest serving board director provides valuable insight and continuity.
The board considers that he remains independent despite his length of
tenure in view of his clarity of thought, his approach in evaluating events
of the last few years and the interaction he has demonstrated in his work
on the SEEAC, the nomination and remuneration committees and his
chairmanship of the ad-hoc board committee on Russia.
Time commitment and outside appointments
Letters of appointment for non-executive directors do not set out a fixed
time commitment for board duties as it is anticipated that the time
required by directors may fluctuate depending on demands of the
business and other events. It is however expected that directors will
allocate sufficient time to the company to perform their duties effectively.
This practice was reviewed and confirmed by the nomination committee
in 2012. The chairman’s appointment letter sets out the time commitment
expected of him.
Executive directors are permitted to take up one external board
appointment, subject to the agreement of the chairman. Fees received for
an external appointment may be retained by the executive director and are
reported in the directors’ remuneration report (see page 127).
Diversity
BP recognizes the importance of diversity, including gender, at all levels
of the company as well as the board. The company is committed to
increasing diversity across its operations and has in place a wide range
of activities to support the development and promotion of talented
individuals, including women.
In 2011 the board confirmed its support for the work of Lord Davies and
his report on Women on Boards and aimed to increase the number of
women on the board by two by 2013 and aspired to reach his
recommendation of 25% female board representation by 2015. In 2012,
the chairman joined the 30% Club (a group of chairman who have
voluntarily committed to bring more women onto UK corporate boards).
In 2012, the nomination committee agreed metrics to monitor the board’s
diversity mix and implementation of the board’s diversity policy. These
metrics include the gender split and geographic background of the BP
board and are shown below. The board also considered diversity as part of
the annual evaluation of its performance and effectiveness.
1
2
Gender
1. Female directors 2
2. Male directors 13
Board diversity as at 31 December 2012
1
1
2
2
3
4
5
Independence
Geographic background
1. Executive directors 27%
2. Non-executive directors 73%
1. UK 6
2. US 5
3. Europe excluding UK 2
4. Rest of World 1
5. UK/US dual citizenship 1
The work of the BP board in 2012
The board meets in person or by teleconference. Nine meetings were
scheduled for 2012, but additional board meetings were called principally
to discuss legal issues in the US and the sale of BP’s share in TNK-BP,
meaning the board met 19 times during the year, with nine of these
meetings taking place by telephone. These telephone meetings were by
their nature called at short notice and directors who were unable to attend
(often due to travel commitments) were briefed separately outside the
meeting. For director attendance at board and committee meetings, see
the table on page 120.
The board’s agenda for the year has focused on key areas of strategy,
assurance, risk and reputation.
Board activities
Strategy
Risk
Assurance
Reputation
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