BP 2009 Annual Report Download - page 7

5
Business review
The success of BP today is, in many ways,
testament to Peter Sutherland’s unique
style in leading the board. As chairman for
12 years and non-executive board director
for 14 years, Peter steered the group through
many challenges. He leaves a strong BP that
is well positioned for further success. As
a board, we thank him for his exceptional
contribution. We also thank those non-
executives who are to leave after the annual
general meeting. Sir Ian Prosser departs
after 12 years of outstanding service,
including 10 years as deputy chairman.
Erroll Davis, Jr joined in 1998 and played
an important role in key non-executive
committees. Sir Tom McKillop joined in
2004 and chose to retire this year, having
made a strong impression. I know my
fellow board members greatly appreciate
their contributions.
We are now in the process of
appointing experienced and talented
newcomers to the board. I have worked
closely with colleagues on the nominations
committee to select individuals whose
skills match the needs of the business
while ensuring appropriate independence.
As part of our continuing refreshment of
the board, I am delighted that Paul Anderson
has recently joined the board and that Ian
Davis will join in April 2010. Our clear
objective as a board is to sustain the success
of the group and I can tell you that we will
not lack ambition. BP has driven itself back
to competitive fi tness; we must ensure we
build on the hard work of the past three
years and continue to grow a successful
and enduring company. We now have the
opportunity to plot the group’s future position
within a changing energy landscape.
The fi nancial crisis has highlighted concerns
about the way in which companies operate.
In some cases, levels of trust between
boards of directors and shareholders have
been impacted. From my early contact with
BP shareholders, I understand that the BP
board has long been actively engaged in
dialogue. I strongly endorse and encourage
this and intend to build on such good
practice. BP is respected for its leadership
on governance and we will keep looking
for ways to enhance how we govern and
report on the group.
Risk remains a key issue for every
business, but at BP it is fundamental to
what we do. We operate at the frontiers
of the energy industry, in an environment
where attitude to risk is key. The countries
we work in, the technical and physical
challenges we take on and the investments
we make – these all demand a sharp focus
on how we manage risk. We must never
shrink from taking on diffi cult challenges,
but the board will strive to set high
expectations of how risk is managed
and remain vigilant on oversight.
As is well known, BP responded
early to the issue of climate change. The
group has made substantial investments
in alternative energies and in lower-carbon
fossil fuels such as natural gas. We support
the low-carbon evolution, but must also
continue to produce the high-quality
hydrocarbons required by a world with
a growing population, growing economies
and greater mobility.
We will continue to contribute to debate
around public policy, and intend to help
shape and lead the energy industry of
tomorrow. People need BP to keep doing
what it does best.
I recognize that many institutions and
individuals rely on BP for a consistent return
on their investment and the board takes
seriously its responsibilities in this regard.
Our task is to achieve the best balance
of our sources and uses of cash, making
investments to generate long-term business
momentum while managing debt and
realizing steady rewards for shareholders.
Over the past year we have demonstrated
our ability to achieve this despite a very
volatile business environment. While we
cannot control the price of oil we can control
the effi ciency of our own operations, and the
improving performance within the group will
help us to balance fi nancial priorities. The
quarterly dividend, to be paid in March, is
14 cents per share ($0.84 per ADS), the
same as a year ago. In sterling terms, the
quarterly dividend is 8.679 pence per share,
compared with 9.818 pence a year ago.
We are now proposing to introduce
a scrip dividend programme. For those
shareholders who choose to take their
dividend in shares, rather than cash,
the issuing of scrip shares is an
attractive alternative.
So, I thank shareholders for their
continued support. The group has recently
celebrated its centenary and I relish the
opportunity to lead the board as we move
into a second century. We operate in a
fast-moving world full of profound challenges
and opportunities, but I see no reason why
a fi t and determined BP cannot thrive in
this environment and remain at the heart
of society for many years to come.
BP has driven itself back to competitive
fi tness; we must ensure we build on the hard
work of the past three years and continue to
grow a successful and enduring company.
Our market
Read about key issues affecting
the energy market on pages 11-13.