BP 2007 Annual Report Download - page 81

Committee activities in 2007
Baker Panel Report and appointment of independent expert
In January 2007, the Baker Panel published its report on BP’s corporate
safety culture and the oversight of safety management systems at
BP’s five US refineries. The company agreed to adopt all the panel’s
recommendations, which were aimed at improving process safety
performance at the five US plants, including the appointment of an
independent expert for a period of at least five years to monitor and
report annually on the progress of such implementation to the BP board.
In May, the board announced that L Duane Wilson, a member of the
Baker Panel, was appointed as the independent expert to provide an
objective assessment to the board of the company’s progress towards
implementation of the panel’s recommendations. Mr Wilson reports to
the chairman of SEEAC, has attended three of the committee’s meetings
since his appointment and has also accompanied the committee to its
site visit of the Texas City refinery.
SEEAC received a presentation on Mr Wilson’s detailed work plan in
early 2008 and he will now periodically report to SEEAC on his progress.
On behalf of the board, SEEAC will receive an annual report by mid-2008
in which Mr Wilson will address progress against the 10 Baker Panel
recommendations.
Group operations risk committee
The group operations risk committee (GORC) was formed at the end of
2006 by executive management. The GORC is chaired by the group chief
executive and reports regularly to SEEAC. GORC reports presented to
SEEAC during the year included reviews of the progress of the six-point
plan and the development of leading and lagging indicators of safety and
operational performance.
Site visits
The committee visited BP’s Gelsenkirchen refinery in Germany in March
2007 and the Texas City refinery in September. The annual committee
evaluation process concluded that such site visits were valuable to the
committee’s work and, as a result, other site visits are planned for
inclusion on the forward agenda for 2008.
Compliance and ethics
The committee is tasked with reviewing reports on the group’s
compliance with its code of conduct and on the employee concerns
programme (OpenTalk) as it relates to non-financial issues. During the
year, the committee received quarterly compliance and ethics reports,
reviewed the 2006 certification process and the nature and resolution
of cases raised through OpenTalk.
Other topics
Other topics reviewed during the year by SEEAC included a risk
review of the Latin America and Caribbean region; health, safety
and environmental progress in TNK-BP; and the BTC pipeline.
Performance evaluation
The committee conducts an annual review of its process and
performance. The 2007 committee review involved a facilitated
discussion at its November meeting. The review concluded that overall
the committee was functioning as intended but that going forward more
emphasis would be given to operational risk. In terms of committee
processes, the review concluded that greater focus should be given to
the effective use of the committee’s time, as the committee’s workload
had increased with the frequency and duration of meetings lengthening.
SEEAC plans to meet seven times during 2008.
Remuneration committee report
Membership
The committee’s members consist solely of non-executive directors
who are considered by the board to be independent.
Members of the remuneration committee during the year were
Dr DeAnne Julius (chairman), Erroll Davis, Jr, Sir Tom McKillop and
Sir Ian Prosser. John Bryan retired from the committee in April 2007.
The chairman of the board also attends meetings of the committee.
Meetings and attendance
The remuneration committee met six times during 2007 and is
independently advised.
Role and authority of the committee
The committee’s main task is to determine on behalf of the board the
terms of engagement and remuneration of the group chief executive and
the executive directors and to report on those to shareholders.
Further details on the committee’s role, authority and activities during
the year are set out in the directors’ remuneration report, which is the
subject of a vote by shareholders at the 2008 AGM.
Chairman’s committee report
The chairman’s committee completed the task that it commenced
in 2006, formally concluding the process for the identification and
appointment of a group chief executive to replace Lord Browne. This
process involved establishing a clear definition of the role description and
benchmarking internal candidates against an external population. The
committee held detailed interviews with each of the candidates and
undertook an evaluation of the candidates’ strengths and weaknesses.
During the year, the committee reviewed with Dr Hayward the short-
and long-term challenges facing the group and, in particular, Dr Hayward’s
proposals for the ‘forward agenda’.
The committee also considered a number of management changes
initiated by Dr Hayward and discussed his proposals for executive
succession. The committee reviewed Lord Browne’s performance
at the start of the year and that of Mr Sutherland at the end.
Nomination committee report
During the year, the nomination committee, through an external
facilitator, carried out a detailed review of the board’s skills aimed at
identifying any perceived deficiencies such that a comprehensive
succession plan could be prepared. The committee, under the
chairmanship of Sir Ian Prosser, has acted as the working group for
the identification of a successor to Mr Sutherland as chairman.
BP ANNUAL REPORT AND ACCOUNTS 2007 79