BP 2014 Annual Report Download - page 64

Appointment and time commitment
The chairman and NEDs have letters of appointment; there is no term limit
on a director’s service as BP proposes all directors for annual re-election by
shareholders (a practice followed since 2004).
While the chairman’s appointment letter sets out the time commitment
expected of him, letters of appointment for NEDs do not set a fixed time
commitment. It is anticipated that the time required of directors may
fluctuate depending on demands of BP business and other events. It is
expected that directors will allocate sufficient time to BP to perform their
duties effectively and that they will make themselves available for all
regular and ad-hoc meetings.
Executive directors are permitted to take up one external board
appointment, subject to the agreement of the chairman. Fees received for
an external appointment may be retained by the executive director and are
reported in the annual report on remuneration (see page 72).
Independence and conflicts of interest
NEDs are expected to be independent in character and judgement and free
from any business or other relationship which could materially interfere
with the exercise of that judgement. It is the view of the board that all
non-executive directors, with the exception of the chairman, are
independent. See page 239 for a description of BP’s board governance
principles relating to director independence.
Antony Burgmans joined the board in February 2004 and by the 2015 AGM
will have served 11 years as a director. In 2012, the board asked him to
remain as a director until the 2016 AGM. The board continues to consider
that his experience as the longest serving board member provides valuable
insight, knowledge and continuity, that he continues to meet its criteria for
independence and will keep this under review.
The board is satisfied that there is no compromise to the independence of,
and nothing to give rise to conflicts of interest for, those directors who
serve together as directors on the boards of outside entities or who hold
other external appointments. The nomination committee keeps the other
interests of the NEDs under review to ensure that the effectiveness of the
board is not compromised.
Succession
Alan Boeckmann joined the board in July 2014 as a non-executive director.
He is a member of the Gulf of Mexico and the safety, ethics and
environment assurance committees and attends the remuneration
committee.
Iain Conn, chief executive of BP’s Downstream segment, retired from the
board on 31 December 2014.
At BP’s AGM in 2015, George David will retire from the board following
seven years’ service as a non-executive director.
Professor Dame Ann Dowling will take the chair of the remuneration
committee when Antony Burgmans stands down in 2015.
Andrew Shilston and Alan Boeckmann will join the remuneration
committee after the 2015 annual general meeting.
Board activity
The board’s activities are structured to enable the directors to fulfil their
role, in particular with respect to strategy, monitoring, assurance and
succession. At every meeting, the board receives reports from the chair of
each committee that has met since the last meeting. The main areas of
focus by the board during 2014 are shown below.

Geopolitical risk.

plan.

allocation of risks to the
board and committees
for 2015.
Risk



investment review.


strategic contractors.

in Azerbaijan, Caspian
and Turkey.
Performance

-year
results.
Annual Report and Form
20-F 2013 and 2014.


Finance and
planning

survey.

reputation.


Reputation


BP values.

the Whiting refinery.

Board
development
BP Energy Outlook 2035.

on geopolitical issues.

view.



competitor outlook.
Strategy
Board activities
Risk and assurance
During the year the board, either directly or through its committees,
regularly reviewed the processes whereby risks are identified, evaluated
and managed. The effectiveness of the group’s system of internal control
and risk management was also assessed (see Internal Control Revised
Guidance for Directors (Turnbull) on page 63).
The annual plan, group risk reviews and strategy are central to BP’s risk
management programme. They provide a framework by which the board
can consider principal risks, manage the group’s overall risk exposure and
underpin the delegation and assurance model for the board in its oversight
of executive management and other activities. The board and its
committees (principally the audit, SEEAC and Gulf of Mexico committees)
monitored the group risks which were allocated following the board’s
review of the annual plan at the end of 2013.
Those group risks reviewed by the board during 2014 included risks
associated with the delivery of BP’s 10-point plan and geopolitical risk
associated with BP’s operations around the world. The board considered at
the half year whether any changes were required to the allocation of group
risks and confirmed the schedule for oversight of these risks. The board’s
monitoring committees (the audit, SEEAC and Gulf of Mexico committees)
were also allocated a number of group risks for review over the year. These
are outlined in the reports of the committees on pages 64-71.
For 2015, the group risks allocated for review by the board include
geopolitical risk and the delivery of major projects★, particularly in the
Upstream. Further information on BP’s system of risk management is
outlined in Our management of risk on page 46.
BP Annual Report and Form 20-F 201460