The work of the board continued to progress in 2017. We focused on the development and implementation of our strategy out to 2021 that we communicated to investors last year. We have seen substantial variations in the oil price and have had to ensure that BP is robust for all financial cycles.
We believe there will be a continuing demand for hydrocarbons over the coming decades. Our strategy is designed to balance our role in supplying energy for the world with the growing need to be part of the transition to a lower carbon global economy. The board’s focus has been on this dual challenge, which is crucial to the company’s long-term sustainability.
The role of business in society remains a major issue which all boards must address. In the UK, the Financial Reporting Council has published its consultation on a material revision to the UK Corporate Governance Code. There is a clear emphasis on the need for boards to focus on their relationship with all those with whom the company comes into contact. In particular, boards are encouraged to ensure they find ways to hear the voice of the employee in the board room.
We are participating in this consultation and have already established a variety of ways to speak and listen to our employees around the world. We will need to ensure that all voices – those of shareholders, employees, customers and communities – find their way to the board. Our long-term investments and relationships in many countries have already helped with this.
Remuneration continued to be an area of focus in the year. We are grateful to our shareholders for their support of the remuneration report at the 2017 AGM. This was very important to us. The remuneration committee continued its work this year, as it implements the new policy and some legacy awards from the 2014 policy. The committee has again had some challenging decisions to take. Dame Ann Dowling will be standing down from the committee at the 2018 AGM after three years in the chair. I would like to thank her and pay tribute to her work. Paula Reynolds, already an experienced remuneration committee chair, will succeed Dame Ann.
I will be standing down as chairman at an appropriate time after the 2018 AGM. Ian Davis, the senior independent director, has already begun the search for my successor. I will have served as chairman for almost nine years by the time I stand down.
The board has faced and risen to many challenges during that time and membership has evolved and remained balanced. I believe that we are well placed for the future – with the appropriate mix of skills, experience and diversity. Throughout I have wanted to ensure that we used our time wisely as it was essential that we had the space in our meetings to discuss strategy and the direction of the company. In 2010 we formed the Gulf of Mexico committee, originally to have oversight of our commitment on the ground following the accident. The work of this committee evolved into considering the reports on the causes of the accident and subsequently leading the work around the ensuing litigation. The committee sat for five years. We also formed a special committee to oversee negotiations in Russia which eventually led to our equity ownership in Rosneft. This experience led to the formation of the geopolitical committee which is now well in its stride.
We have used the evaluations of the board and the committees to ensure that we have been focusing on the right issues and adding value. I am pleased that over the summer we will be carrying out an externally facilitated evaluation, which I am sure will assist my successor.
I am very grateful to Bob, his executive colleagues and all my fellow directors for all the work that they have done during the year. BP has an exciting future and we have the right team to take advantage of the opportunities that it will bring.
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