BP 2013 Annual Report Download - page 77

Corporate governance
BP Annual Report and Form 20-F 2013 73
AGM
The voting levels for the 2013 AGM saw an increase over the previous year
to 64.2% (versus 63.2% in 2012). A webcast, speeches and presentations
from the AGM are available on the BP website after the meeting, together
with the outcome of voting on each resolution. Each year the board
receives a report after the AGM giving a breakdown of the vote and
investor feedback on their voting decisions for the meeting, informing the
board on any issues arising.
UK Corporate Governance Code compliance
BP complied throughout 2013 with the provisions of the UK Corporate
Governance Code, except in the following aspects:
B.3.2 Letters of appointment do not set out fixed-time commitments
since the schedule of board and committee meetings is subject to
change according to the demands of business and other events. All
directors are expected to demonstrate their commitment to the
work of the board on an ongoing basis. This is reviewed by the
nomination committee in recommending candidates for annual
re-election.
D.2.2 The remuneration of the chairman is not set by the remuneration
committee. Instead the chairman’s remuneration is reviewed by the
remuneration committee which makes a recommendation to the
board as a whole for final approval, within the limits set by
shareholders. This wider process enables all board members to
discuss and approve the chairman’s remuneration (rather than solely
the members of the remuneration committee).
E.2.4 Printed copies of the BP Annual Report and Form 20-F 2012
completed mailing outside of the Governance Code period of 20
working days before the AGM (but within the UK Companies Act
notice period). This was due to printing being delayed following
developments in the company’s legal proceedings in the US.
Board evaluation
Each year BP undertakes a review of the board, its committees and
individual directors. The chairman’s own performance is evaluated by the
chairman’s committee (led by Antony Burgmans).
In 2013 the nomination committee undertook a review of board skills, activities
and time commitment with a view to informing the succession profile of future
board appointments. This was undertaken to ensure that the board was well
positioned to challenge and develop BP’s strategy. This review included a
discussion on how the board should approach its work in future.
Given this review of board skills and the use of external facilitation in prior
years, an internally designed board evaluation has been carried out for 2013
using an external facilitator (Lintstock), which tested key areas of the
board’s work, including strategy, assurance, risk and governance
processes. The output of the review were discussed at the board and
individually at each committee in January 2014.
Key conclusions from the evaluation
The evaluation concluded that progress had been made in improving the
rhythm of board meetings and the timeliness of board paper distribution
through the introduction of an online portal.
Good progress had been made during the year on the development of
strategy and the governance around capital projects. Further work in both
these areas was agreed for 2014. In addition, greater focus on technology
and capability would be included as part of the board’s considerations on
strategy. The board also expressed a desire to look outwards when
considering the rapidly evolving global energy market.
Follow up from our previous evaluation
After the 2012 evaluation, the board revised its agenda to increase the
focus on strategic issues and introduced the regular use of forward agenda
planning to enable this to be realized. The board also asked for greater
interaction with the international advisory board, and a joint meeting has
been scheduled for 2014. The number of board meetings reduced from 19
in 2012 to 11 in 2013, enabling the board to move back to a more steady
state of operation.
Shareholder engagement
The company operates an active investor relations programme and the
board receives feedback on shareholder views through results of an
anonymous investor audit and reports from management and directors
who interacted with shareholders over the year.
Institutional investors
Executive directors and senior management regularly meet with
institutional investors through roadshows, group and one-to-one meetings
and events for socially responsible investors.
During the year the chairman, senior independent director and chairs of the
SEEAC and remuneration committee held investor meetings to discuss
strategy, the board’s view on the company’s performance, governance and
remuneration. An annual investor event was held in March 2013 with the
chairman and chairs of the board committees. This meeting enables BP’s
largest shareholders to hear about the work of the board and its
committees, and for non-executive directors to engage with investors.
Materials from investor presentations, including our financial results and
information on the work of the board and its committees can be
downloaded at bp.com/investors.
Private investors
Following a successful meeting in 2012, BP repeated an event for private
investors in conjunction with the UK Shareholders’ Association (UKSA). A
group of 50 private shareholders listened to presentations from the
chairman and head of investor relations on BP’s annual results, strategy
and the work of the board. The event gave shareholders the opportunity to
ask questions on BP’s activities and for the company to receive direct
private shareholder feedback.
As part of the further development of BP’s retail shareholder strategy, we
commenced a ‘lost shareholder’ programme in 2013 to trace and confirm
shareholders’ contact details in order to successfully reunite them with
their unclaimed dividends. Funds returned to shareholders as at 31 January
2014 amounted to £1,512,882.