Dear fellow shareholders,
It has now been two years since bp set out its new purpose, ambition and aims – shortly followed by a new strategy and financial and sustainability frames. Within just a few weeks of bp launching its new direction, the world was struck by a global pandemic. As we said in last year’s annual report, it was a period in which the board felt especially keenly its responsibilities for overseeing the delivery of the new strategy and for monitoring the performance of the new organization.
Turning to 2021, this was a year of further change – the reinvention of bp, helping to ensure that we have the right skills and capabilities in support of the energy transition, while delivering on our investor proposition and increasing distributions to shareholders. At the beginning of the year, we put in place a new governance framework underpinning the board’s role and its responsibilities to its shareholders. Founded upon four pillars – Strategy, People, Performance, and Governance – this new framework has stood up well against the challenges of the pandemic and a rapidly evolving and increasingly complex external environment.
Commissioning an independent effectiveness review of the board in 2021 provided an objective view of the performance of the board operating against that framework. It proposed some areas for focus as we continue modernizing our approach.
In February 2022, bp’s governance was tested once again, this time by Russia’s attack on Ukraine. Within days of military action, the board had met, undertaken a thorough process of review, and after careful consideration announced bp’s decision to exit from its shareholding of Rosneft in Russia. bp’s governance framework provided the clarity and flexibility we needed to act decisively and promptly, having satisfied ourselves that to do so was in the long-term interests of the company’s shareholders.
One of the privileges of serving on bp’s board is being able to meet such a variety of people, with different roles, backgrounds and experiences, and in so many places around the world – inside and outside bp.
Our formal engagement programme allowed the board to meet people based in the tropical rainforests of West Papua, the Abu Dhabi desert, our US retail stations, our refinery in Spain, and our Indian offices – to highlight just a fraction. These were mostly digital meetings, but the gradual lifting of lockdown restrictions opened opportunities to visit bp’s new EV charging infrastructure on London’s Park Lane, colleagues in front-line roles during a visit to Aberdeen, and representatives from the community surrounding our proposed low carbon projects on Teesside in England.
Our investors are also a vital part of bp’s community. We have spent a great deal of time with them, seeking their views on matters ranging from our climate strategy to board governance, diversity and to remuneration. Discussion with our investors ultimately helped to inform the adjustments we announced to some of our net zero aims on 8 February 2022, and our decision to offer shareholders a vote on bp’s Net Zero Ambition Report. We are hugely grateful for these important engagement opportunities.
One of the most striking conversations we had in 2021 was with a range of UK and US colleagues representing ethnic minority groups. Hearing people, some of whom had worked with bp for more than 20 years, reflect on changing attitudes over that period was enlightening, but also encouraging. It was clear that there is still work to do in improving diversity and promoting inclusion across bp.
The need to improve diversity is why in 2021 the board introduced a diversity policy of its own. I believe board diversity matters; it sets the tone for the rest of the organization and allows us to draw upon a variety of experiences and perspectives.
I am pleased that bp’s board already meets the FTSE Women Leaders Review targets of 40% for representation of women and a female appointed to the position of senior independent director. We have also met the Parker Review’s target for black and minority ethnic directors. But I believe bp should consider all dimensions of diversity. Our new diversity policy sets a standard from which we will build. It will see the board encouraging an inclusive environment and overseeing a diverse succession pipeline – among other important commitments.
In addition, bp has expanded its gender ambition to cover all levels of the business, and the board will oversee bp’s progress.
The board has also increased its focus on the talent management and development of all bp’s people.
During 2021, we said goodbye to two longstanding board members. Professor Dame Ann Dowling and Brendan Nelson stood down after nine and 11 dedicated years’ service, respectively. We are grateful to Brendan for continuing beyond the nine-year tenure to properly hand over his role as chair of the audit committee to Tushar Morzaria.
We were pleased to welcome Karen Richardson and Johannes Teyssen to the board. Karen has brought exceptional knowledge of technology, start-ups and cybersecurity, and a digital mindset honed during a career in Silicon Valley. Johannes’s long experience leading one of Europe’s largest energy companies means he brings deep knowledge of our sector and its continuing transformation.
Many people contributed to bp’s success in 2021 – our suppliers, our strategic partners, and, of course, our customers. It would be impossible to thank everyone, but I do want to mention three groups.
First, I am deeply grateful to bp’s investors, especially those of you who in 2021 shared your views on bp’s direction, whether through voting, in writing, or in conversation with the board. We look forward to repaying the faith you have placed in this company. Second, my fellow directors. They have made a strong contribution to bp through a challenging period. Third, Bernard and his leadership team, for all they have achieved so far, and for how they have achieved it – with characteristic determination. But perhaps the greatest thanks should go to bp’s people. I could not hope for a better team to entrust the challenge of reimagining energy for people and our planet. Thank you for all you do for bp.
Information about our Annual General Meeting including the Notice of Meeting and speeches made by members of the board
An overview of the key activities, events and results together with commentary on bp’s performance and our priorities as we move forward