BP Annual Report and Form 20-F 2011 - Company Reporting

During the year, the remuneration committee has worked with Bob Dudley andhis team to remodel the reward system within the group. The system belowthe board is now clearly focused on the long term and is similar to that used forexecutive directors. I believe our approach to rewarding directors balances thecompany’s priorities of driving financial performance, meeting our responsibilitiesas a corporate citizen and providing value for our shareholders.Against all of this background, I have been keen to see how the boardcould work more effectively. During the year, a working group of non-executivedirectors reviewed board tasks, roles and processes. This work, coupled withour board evaluation, has led to a number of changes in the way in which theboard operates. These are set out in the board performance section of thisannual report.2011 was a testing year for everyone at the company. The board wasimpressed by the way in which Bob and his executive team tackled a range ofconsiderable issues. We were also struck by the tenacity and dedication of BP’semployees. On behalf of the board, I thank everyone for their efforts.In 2012 we must execute our 10-point plan and continue to meet ourcommitments in the Gulf of Mexico. While many of the investigations into thecauses of the accident have been completed, we still face major litigation in theUS during 2012. This must run its course, although we are pleased with thecontinuing progress that we are making with settling some of these claims.As part of its strategic role, the board must be mindful of the long-termdevelopments in our industry. BP Energy Outlook 2030 tells us that risingpopulations, increasing levels of life expectancy and improving standards of livingwill continue to generate growing demand for energy. The challenges in terms ofsupply are immense. I expect these dynamics to provide BP with opportunitiesfor decades to come. The report projects that fossil fuels will be providing around80% of the world’s energy in 2030. This will require companies such as ours toovercome substantial technical and physical challenges. Lower carbon resourcesand energy efficiency technologies are required to play their part in addressingboth demand and emissions. BP must understand and adapt to these changesin order to remain sustainable in this changing world.I believe BP ended the year stronger and safer, with increasing forwardmomentum and a clear strategy matched to the world we see ahead. Thisis a great company, with a strong board and excellent people. I thank you foryour continued support. I will report back to you on BP’s progress at this pointnext year.Business review: Group overviewCarl-Henric SvanbergChairman6 March 2012BP Annual Report and Form 20-F 2011 11