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

Corporate governanceNomination and chairman’s committees reportsChairman’s introductionI chair both the nomination and the chairman’s committees. Set outbelow are reports on their activities during the year. As in previous yearsthere is often an overlap between the work of the committees as thenomination committee may wish to sound out the view of the othernon-executive directors in the chairman’s committee on a particular issue,such as executive succession or the skills and experience needed for nonexecutivedirectors.Carl-Henric SvanbergChairmanNomination committee reportCommittee membersCarl-Henric Svanberg – committee chairAntony Burgmans (joined in May 2011)Cynthia Carroll (joined in May 2011)Sir William CastellIan DavisMembers who left during the yearDouglas Flint (retired 14 April 2011)DeAnne Julius (retired 14 April 2011)The committee met five times during 2011.Committee’s roleThe committee identifies, evaluates and recommends candidates for theappointment or re-appointment as directors and for the appointment of thecompany secretary.The committee keeps the mix of knowledge, skills and experienceof the board under regular review (in consultation with the chairman’scommittee) to ensure an orderly succession of directors. The outsidedirectorships and broader commitments of the non-executive directors arealso monitored by the nomination committee.Committee activitiesThe committee reviewed the independence and roles of each of thedirectors prior to recommending them for re-election at the 2011 AGM. Italso discussed the composition of the board and its committees in termsof service, skills and diversity.Since the start of 2011, there were changes to the composition ofthe board, with Phuthuma Nhleko, Andrew Shilston and Professor DameAnn Dowling joining on 1 February 2011, 1 January 2012 and 3 February2012 respectively. The committee retained the services of externaladvisers Egon Zehnder and Odgers to assist with the identification ofpotential candidates over the period.In undertaking its search for potential candidates for boardmembership, the committee carried out a review of skills and experienceof existing board members and considered this against the boardsuccession plan based on tenure and other factors, including diversity.This process enabled the committee to develop a list of selection criteriafor future appointments, which it then used with its external advisers todevelop a shortlist. Based on this, the committee determined an initialfocus on candidates in the fields of science and technology.An outline of skills for our current board membership is as follows:DirectorPaul AndersonFrank BowmanAntony BurgmansCynthia CarrollSir William CastellGeorge DavidIan DavisBrendan NelsonPhuthuma NhlekoAndrew ShilstonProfessor Dame Ann DowlingKey skills and experienceOil and gas industry experienceSafety, technology and risk managementFood and consumer goods; leading aglobal businessOil, gas and extractive industryexperience; leading a global businessNuclear and medical science industry;technologyTechnology and manufacturingStrategy, advisory and consultingAudit, financial services and tradingCivil engineering, telecoms and bankingOil and gas industry experience; financeEngineering, technology and educationThe committee also considered the succession of our chief financialofficer and the skillset and experience needed in light of the role andthe company’s strategy. There was an extensive process in which EgonZehnder advised the committee on both internal and external candidates.The committee made its recommendation to the chairman’s committee,and CFO succession was then discussed by all the non-executive directors.It was agreed that Brian Gilvary, previously deputy chief financial officer,was the preferred candidate and he became CFO on 1 January 2012.During the year the committee considered the recommendationsof Lord Davies’ report on gender diversity. In line with the report, thecommittee agreed to a set of aspirational targets to work towards by 2015and recommended changes to BP’s board governance principles to includea policy on board diversity, which emphasizes considerations of diversity,inclusiveness and meritocracy when considering board composition. Thecommittee has determined to develop during 2012 a set of measurableobjectives for implementing its board diversity policy on which it will reportback to shareholders.At the end of the year, the committee undertook its annualexamination of its effectiveness and performance, using an internallyadministered questionnaire. As part of its evaluation, the committeeconsidered its role and its task for the year. The evaluation concluded thatthe committee had worked well and had improved its focus on diversity.Going forward the committee wishes to focus on agenda setting andpapers with a view to improving time management and workload.Chairman’s committee reportCommittee membersCarl-Henric Svanberg – committee chairSir William CastellPaul AndersonFrank BowmanCynthia CarrollGeorge DavidIan DavisProfessor Dame Ann Dowling (appointed 3 February 2012)Brendan NelsonPhuthuma Nhleko (appointed 1 February 2011)Andrew Shilston (appointed 1 January 2012)Members who left during the yearDouglas Flint (retired 14 April 2011)DeAnne Julius (retired 14 April 2011)The committee met nine times during 2011.132 BP Annual Report and Form 20-F 2011