BP 2014 Annual Report Download - page 62

Governance overview
Introduction from the chairman
2014 was another active year for the board as we continued to work with
Bob Dudley and his team in reshaping the way that BP operates.
Once again, I have been impressed by the time and commitment given by
my board colleagues. We have built on the progress made in 2013 in
developing how the board works in supporting and challenging executive
management. We have had the benefit of being a settled group for several
years now and I believe that this allows us to spend our time wisely. Later
in this report there is a breakdown of our activities. I would, however, like
to highlight several areas.
The 10-point plan set the direction of travel for the group through to 2014.
We worked through the year with executive management to determine our
strategic direction for 2015 and beyond. To do this, we regularly reflected
on the impact of economics and geopolitics both in the world and the
markets in which we operate.
This has particularly been the case as the oil price fell during the last
quarter of the year and action was needed to reset the business to a
lower-price environment.
During the year, we reviewed and enhanced the regular information which
comes to the board. This is in response to feedback from directors which
came from our 2013 board evaluation.
We also considered, in some depth, the manner in which the remuneration
committee operates. We have adopted a revised set of tasks for the
committee which reflect the need to balance development and
implementation of the remuneration policy for the directors while
overseeing the approach to reward for executives below the board.
BP, with input from board members, has revised its code of conduct with
the aim of simplifying and clarifying its requirements without weakening
their effect. As a board, we are committed to BP’s values and the code,
and have received training on its application.
In 2014 the UK Corporate Governance Code was revised. We have taken
this into account at the board and in the committees whose work it
impacts. There is particular focus on how risk is governed and managed.
As a result there is much for us to consider here and we will be reviewing
our systems ahead of its implementation in 2015.
The nomination committee has continued to assess the mix of the skills
and experience on the board, in particular for the future, and in line with our
aspiration for diversity. Your board has a diverse membership and we
continue to work to increase its diversity. As I have previously commented,
while candidates can be identified, it is often the case that the timing of
appointments is dependent on those candidates becoming free from
current commitments. You should expect us to make progress in the
current year.
Finally, we have again this year, considered whether all our narrative
reporting is ‘fair, balanced and understandable’. We have applied the
process adopted last year and concluded that this report meets that test.
I believe that the system of governance used by the board has assisted it
to meet the challenges of past years and will do so in the future.
Carl-Henric Svanberg
Chairman
I believe that the system of governance
used by the board has assisted it to meet
the challenges of past years and will do so in
the future.
Board diversity
BP recognizes the importance of diversity, including gender diversity, at the
board and all levels of the group. BP 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, regardless of
gender and ethnic background.
The board operates a policy which aims to promote diversity in its
composition. Under this policy, director appointments are evaluated against
the existing balance of skills, knowledge and experience on the board, with
directors asked to be mindful of diversity, inclusiveness and meritocracy
considerations when examining nominations to the board.
Implementation of this policy is monitored through agreed metrics. During
its annual evaluation, the board considered diversity as part of the review of
its performance and effectiveness.
The board is supportive of the recommendations contained in Lord Davies’
report Women on Boards for female board representation and has an
aspiration to increase this to 25% by the end of 2015. At the end of 2014
there were two female directors on the board. The nomination committee
is actively considering diverse candidates as part of its wider search for
board candidates and it is anticipated that an appointment is likely to be
made in 2015.
1
2
1
2
3
4Geographic background
1. UK 36%
2. US 43%
3. Europe excluding UK 14%
4. Rest of world 7%
Gender
1. Female directors
14%
2. Male directors
86%
Board diversity as at 31 December 2014
BP Annual Report and Form 20-F 2014
58