BP 2015 Annual Report Download - page 67

Corporate governance
The board in 2015
Board membership
On 1 January 2016 the board had 15 directors – the chairman, two executive
directors and 12 independent non-executive directors (NEDs).
NEDs are expected to be independent in character and judgement and free
from any business or other relationship that could materially interfere with
exercising that judgement. It is the board’s view that all NEDs, with the
exception of the chairman, are independent. See page 244 for a description
of BP’s board governance principles relating to director independence.
The board benefits significantly from the diverse balance of background,
gender, skills and experience represented by the NEDs. There are three
female directors on the board and three directors from non-UK/US
backgrounds.
Director Key skills and experience
Paul Anderson Oil and gas industry experience; leading
a global business
Alan Boeckmann Engineering, construction and
procurement; leading a global business
Admiral Frank Bowman Safety, technology, engineering and risk
management
Antony Burgmans Food and consumer goods; leading a
global business
Cynthia Carroll Oil, gas and extractive industry
experience; leading a global business
Professor Dame Ann Dowling Engineering, technology and education
Ian Davis Strategy, advisory and consulting
Brendan Nelson Audit, financial services and trading
Phuthuma Nhleko Civil engineering, telecoms and banking
Paula Rosput Reynolds Energy industry; leading a global
business
Sir John Sawers International affairs
Andrew Shilston Oil and gas industry experience; finance
Carl-Henric Svanberg Manufacturing and telecoms; leading a
global business
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
Paula Rosput Reynolds joined the board in May 2015 as a non-executive
director. She is a member of the audit committee and the chairman’s
committee.
Sir John Sawers also joined the board in May 2015 as a non-executive
director. He is a member of the safety, ethics and environment assurance
committee, the geopolitical committee and the chairman’s committee.
George David, a non-executive director, retired from the board at the annual
general meeting on 16 April 2015.
Professor Dame Ann Dowling became the chair of the remuneration
committee when Antony Burgmans stood down from the role in July 2015.
Andrew Shilston and Alan Boeckmann joined the remuneration committee
after the 2015 annual general meeting.
Antony Burgmans became chair of the newly formed geopolitical
committee in September 2015. Antony Burgmans will step down from the
board at the 2016 AGM after 12 years of service as a non-executive director.
Sir John Sawers will then take the chair of the geopolitical committee.
Phuthuma Nhleko will step down from the board at the 2016 AGM after five
years of service due to external business commitments.
Board meetings
There were 13 board meetings in 2015, of which two were carried out by
teleconference. All directors attended every meeting for which they were
eligible, with the following exceptions:
• Phuthuma Nhleko did not attend the board meeting scheduled at short
notice on 15 June due to prior commitments.
• Antony Burgmans, Cynthia Carroll, Brendan Nelson, Paula Rosput
Reynolds and Sir John Sawers did not attend the board meeting
scheduled at short notice on 23 June due to prior commitments.
• Phuthuma Nhleko did not attend the board meeting on 3 December due
to urgent business commitments.
Board evaluation
Each year BP undertakes a review of the board, its committees and
individual directors. The chairman’s performance is evaluated by the
chairman’s committee and his evaluation is led by the senior independent
director.
The evaluation operates on a three-year cycle, with one externally led
evaluation followed by two subsequent years of internal evaluations
carried out using a questionnaire prepared by an external facilitator.
Activity following prior year evaluation
An evaluation was carried out at the end of 2014 by means of a
questionnaire, facilitated by an external consultant (Lintstock). The
evaluation concluded that reports from the business and on major
projects were robust and informative. In a changing economic and
geopolitical climate, the board was keen to ensure that it managed its
time to allow appropriate levels of discussion by balancing the board’s
monitoring activities with discussion on strategic matters: this has been
achieved by agenda planning during the year. The evaluation highlighted
the future role of technology in delivering BP’s strategy: briefings on this
topic were planned into the board’s agenda, including a technology
presentation with respect to climate change.
2015 evaluation
For 2015 an externally facilitated evaluation was held in addition to, and to
an extent based on, the established annual questionnaire process.
Following a selection process led by the senior independent director,
Bvalco was engaged as the external evaluator. The results of the annual
questionnaire process were shared with the external evaluator who
conducted a series of interviews with each director, members of the
executive team and those who attended or supported the board.
Interviews were focused on evaluating the effectiveness and
performance of the board, and separately that of the chairman. In addition
to these interviews, the evaluators reviewed the board agendas and
materials for the past year and observed a board meeting.
The evaluation tested key areas of the board’s work including its participation
in the formation of strategy, succession and composition, and its oversight
of business performance, risk and governance processes. The effectiveness
of the committees in alleviating the oversight task of the board was also
tested and focus was given to whether the board added value.
Results of the board evaluation and feedback from these interviews were
collectively discussed by the board at its meeting in January 2016, with the
results of the chairman’s evaluation discussed by the chairman’s committee.
The evaluation concluded:
• Recognizing the current state of the market and important
developments for the company during the year, there was a continued
desire to ensure an effective strategy process that focused on the long
term and which acknowledged the important role of the board in this
process.
• Good progress had been made in succession for the board; going
forward this would continue to be built on.
• The board was seen to have a collaborative and inclusive environment.
To build on this further, the board agreed to try and put more of their
monitoring tasks into the committees to allow more time for broader
discussions at the board.
• Committee work was seen as being of a high quality. Given the breadth of
topics covered by the committees, further steps should be taken to ensure
that where appropriate all directors could access information and attend
external visits for those committees of which they were not members.
It was noted that the board governance principles would be reviewed and
amended to capture these conclusions, where appropriate, and to reflect
the current roles and practices within the board.
BP Annual Report and Form 20-F 201563