Governance report 2015

Each year the board reports on the governance of the company and the work of the committees. The governance report is published as part of the Annual Report and Accounts. You can download the full report or extracts from this page

Introduction from the chairman

The membership and work of the board have continued to evolve during 2015. This has been driven by several factors, not least the challenging oil price environment which now dominates our industry. In the years following the Deepwater Horizon accident, the workload of the board, as I have previously reported, increased substantially in response to the issues with which the company was faced. While the number of our meetings has decreased, we still face evolving challenges and I am grateful to Bob, his executive colleagues and my fellow directors for the work that they have done. The commitment  required of all of us certainly has not reduced with the number of meetings.
This means that we have to keep refreshed the way in which we work, the matters that we discuss and the decisions that we take. It remains our goal to keep our board time clear for strategic thinking while asking the committees to undertake much of the core tasks of monitoring and oversight. We need to ensure that we have the right skills round the board table to carry out these tasks.
External interest in what boards do increases year on year and it is for this reason that we set out, in the following detail, a description of our activities. Our agendas are prepared in such a way that we have the time to discuss the key issues of the moment without affecting the proper oversight of those matters with which we have to deal. As will be seen from the reports of the committees, directors have visited a number of BP’s facilities during the year. This is a key part not only of building our understanding of the business but also testing the mood and the morale of our people in these difficult times.

As we look to the future, it is vital that the work of the board evolves with the business. We cannot be working to one rhythm while the business works to another. It is all too easy for a board to work to a historic schedule created to address past challenges. For this reason I am pleased that this year we have carried out a fully externally facilitated evaluation. We are reflecting on the conclusions which are set out elsewhere; it is important that we keep on learning. However, behind all of this an effective board has to keep asking itself two key questions: are we talking about the right things and are we adding value?

It is some time since we reviewed our governance policies. We will be doing this in 2016. The results of our evaluation will be part of this process. Prompted by changes to the Governance Code, we have further focused on risk and our systems of internal control. This has been a valuable process for the board. After what seems almost annual changes to the Code, I welcome the FRC’s decision that this will not be reviewed again until 2019, enabling the UK governance landscape to settle and establish. I am however looking forward to BP being able to contribute to the FRC’s work on succession and culture, which both remain key issues for any board. 

Carl-Henric Svanberg

Chairman

Related content