BP 2012 Annual Report Download - page 122

Corporate governance
BP Annual Report and Form 20-F 2012
120
Audit committee
Chairman’s introduction
During the year the committee has maintained focus on the review and
challenge of BP’s financial assessment of its responsibilities arising from
the Deepwater Horizon accident. We have continued to operate a
delineated model between the board’s three monitoring committees of
audit, SEEA and Gulf of Mexico and have found our respective areas of
oversight to be effective in informing the board’s view as to the nature of
the uncertainties facing the company and context for ongoing litigation
and enquiries.
In addition to this focus, the committee has ensured that the cycle of its
normal agenda is maintained. During the year we have reviewed the areas
of group-level risk allocated to the committee for oversight, namely
trading and treasury, cyber security and compliance with laws and
business regulations (including bribery and corruption, money laundering,
competition and anti-trust and international trade regulations). We have
also undertaken reviews on key aspects of BP’s financial reporting
processes, including the assumptions and methodology regarding
provisions for litigation, environmental remediation and decommissioning.
Other activities in 2012 have included monitoring major project delivery
and effectiveness of investment and tracking the progress of
implementing BP’s finance warehouse programme.
The committee places value on discussing issues directly with
management and operational leadership, as well as seeing first-hand the
group’s risk and control processes in practice. During the year, I have
attended visits to the company’s fracking operations, a paraxylene
manufacturing facility in Texas and the Buncefield terminal in the UK.
In a challenging economic and political climate for business, the
committee’s work and the company’s audit, assurance and compliance
frameworks have enabled BP to maintain the integrity of the group’s
financial and internal controls and the identification and mitigation of risk in
response to these uncertainties. The committee has an excellent mix of
skills and expertise in commercial, audit and financial matters and is well
prepared to face the forthcoming year.
Brendan Nelson
Committee chair
Committee members
Brendan Nelson – committee chair
George David
Ian Davis (retired from the committee on 3 February 2012)
Phuthuma Nhleko
Andrew Shilston (joined the committee 3 February 2012)
The audit committee is composed of independent, non-executive
directors selected to provide a wide range of financial, international and
commercial expertise appropriate to fulfil the committee’s duties.
Brendan Nelson is chair of the audit committee. Formerly vice chairman of
KPMG, he is chairman of the group audit committee of The Royal Bank of
Scotland Group plc, deputy president of the Institute of Chartered
The committee places value on discussing
issues directly with management and operational
leadership, as well as seeing first-hand the
group’s risk and control processes in practice.
Committee reports
Board and committee attendance
Board Audit committee SEEAC
Remuneration
committee
Gulf of Mexico
committee
Nomination
committee
Chairman’s
committee
ababababababab
Non-executive directors
Carl-Henric Svanberg 19 19 4c48
c8
Paul Anderson 19 19 6c623192288
Admiral Frank Bowman 19 19 6 6 19 18 8 8
Antony Burgmans 19 17 6 6 5c54488
Cynthia Carroll 19 15 6 4 4 3 8 5
Sir William Castell 3 2 2 2 12 10 1 1 2 2
George David 19 19 11 11 5 5 23 22 8 8
Ian Davis 19 18 1 1 5 5 23c23 4 4 8 8
Professor Dame Ann Dowling 18 18 5 5 3 3 6 6
Brendan Nelson 19 18 11c11 2 2 8 8
Phuthuma Nhleko 19 17 11 10 8 8
Andrew Shilston 18 15 10 8 6 6
Executive directors
Bob Dudley 19 19
Iain Conn 19 18
Dr Brian Gilvary 19 18
Dr Byron Grote 19 19
a = Total number of meetings the director was eligible to attend.
b = Total number of meetings the director did attend.
c = Committee chairman.
The attendance of certain directors was adversely affected by changes to BP’s rhythm of board meetings, resulting in clashes with directors’ other
executive board commitments.