BP 2012 Annual Report Download - page 127

Corporate governance
Corporate governance
BP Annual Report and Form 20-F 2012
125
Training and visits
The high frequency of meetings in 2012 facilitated the committee’s
understanding of key issues and numerous interdependencies in what at
times has been a fast-moving external environment. Committee members
have interacted with members of the GCRO leadership team, including at
the two meetings of extended duration held in the US in 2012.
2012 committee activities
The committee’s activities have included the following:
Legal
Privileged briefings continue to form a significant part of the committee’s
agenda, given the breadth and pace of legal developments. The
committee oversaw the resolution of numerous matters in 2012; each
was determined to be in the best interests of the company and its
shareholders, and consistent with the overall strategy of reducing key
uncertainties. These resolutions included the class-action settlements
agreed with the Plaintiffs’ Steering Committee (PSC), the criminal
settlement with the Department of Justice, and the civil resolution with
the Securities and Exchange Commission. The committee has overseen
the company’s continuing preparation for trial in the Multi-District
Litigation in New Orleans, as well as a number of other litigation and
administrative proceedings including the multi-district litigation in Houston
and suspension and debarment proceedings led by the Environmental
Protection Agency.
Remediation and restoration
The committee received regular updates on the progress of clean-up and
remediation activities. The committee also monitored the Natural
Research Damage (NRD) Assessment process, as well as discussions
with Natural Resource Trustees on NRD matters including early
restoration negotiations and projects.
Claims
The committee monitored claims processes, including those relating to
state economic claims and the transition from the independently
administered GCCF to the DHCSSP following the agreement of class-
action settlements with the PSCa. Assessments of potential future claims
for provisioning purposes are reviewed by the audit committee.
The committee recently undertook an evaluation of its effectiveness
during 2012, as it has at the end of each year since its inception.
Nomination and chairman’s committees
Nomination committee
Committee members
Carl-Henric Svanberg – committee chair
Antony Burgmans
Cynthia Carroll
Sir William Castell (retired from the committee 12 April 2012)
Ian Davis
Brendan Nelson (joined the committee April 2012)
Paul Anderson (joined the committee April 2012)
Andrew Shilston attends meetings of the committee in his capacity as
senior independent director.
The committee met four times during 2012.
Committee role and structure
The committee identifies, evaluates and recommends candidates for the
appointment or re-appointment as directors and for the appointment of
the company secretary.
The committee keeps the mix of knowledge, skills and experience of the
board under regular review (in consultation with the chairman’s
committee) to ensure an orderly succession of directors. The outside
directorships and broader commitments of the non-executive directors are
also monitored by the nomination committee.
The committee reviewed and confirmed these tasks during the year.
Committee activities
During the year the membership of the committee was reviewed.
Brendan Nelson and Paul Anderson joined as members and Andrew
Shilston was invited to attend as the senior independent director.
The committee reviewed the independence and roles of each of the
directors prior to recommending them for re-election at the 2012 AGM.
It also discussed the composition of the board and its committees in
terms of service, skills and diversity.
Professor Dame Ann Dowling joined the BP board on 3 February 2012
following a recommendation from the committee. The committee had
retained the services of external advisors Odgers to assist with the
identification of potential candidates for this appointment.
During the year the committee considered the skills and experience
required for board members against the strategic direction of the company
at two of its meetings. The committee also considered the skills of the
current directors and were satisfied that the board had the appropriate
balance of skills and experience.
The committee discussed the board’s publicly stated aspirations for
diversity and agreed metrics as required by the UK Corporate Governance
Code. The metrics agreed by the committee on behalf of the board are:
t The absolute number of male and female board members (to measure
the board’s progress in gender diversity).
t The absolute number of different nationalities on the board (as a
measurement of geographic diversity on the board).
The committee agreed that data on these two objectives will be included
in the board performance report in the BP Annual Report and Form 20-F
and reported against in future years (see page 113 for 2012 board diversity
data).
The committee considered the position of candidates identified as
potential non-executive directors and based on the description of the
required skills and experience agreed to commence searches for
appropriate candidates for the medium term.
a See Plaintiffs’ Steering Committee settlements on page 60 and Financial statements – Note 36
on page 236 for further information.
I chair both the nomination and the chairman’s
committees. There is often an overlap
between their work and this is reflected in
their reports.