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Governance and risk

Our?governance structure includes the processes and policies which provide our?framework for decision-making
Q. What?role does the board play in helping BP achieve its strategic priorities?
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A.?“The board sets the long-term strategy of the company. We challenge and monitor the performance of the group chief executive, Bob Dudley, and his team as they make the decisions that shape the future of the company. We make sure that we have the right leadership in place and that we continue to build a dynamic, inclusive and diverse culture. In my role as chairman I meet with employees across our businesses in order to understand how we are rising to the dual challenge of providing more energy with fewer emissions – one of the defining issues of our times.”

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Helge Lund,?chairman, BP

Helge Lund, chairman, BP

Board oversight

Our board is responsible for the overall conduct of the group’s business.


BP’s board of directors reviews and monitors performance against our long-term strategy and confirms that the processes for identifying and managing key risks – both financial and non-financial – are in place.


We identify risks for particular oversight by the board and its committees each year. In 2018 these were financial liquidity; geopolitical risk; cyber security; process safety, personal safety and environmental risks; security; ethical misconduct; legal and regulatory non-compliance; and trading non-compliance.


The oversight and management of other risks, for example technological change, is undertaken in the normal course of business by the executive team, the board and relevant committees.


The safety, ethics and environment assurance committee, one of our six board committees, looks at the processes that BP’s executive team use to identify and mitigate operational and non-financial risk.

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Climate governance

BP’s governance framework applies equally to the management of the various aspects of climate change and the transition to a lower carbon economy. In addition to the oversight provided by the executive team, the board and relevant committees, various groups and committees in BP bring together cross-segment and cross-functional expertise of relevance to this area, including those set out below.

BP governance framework?

See?smforum.net/annualreport

Arrow pointing up

Renewal committee:?reviews strategic, commercial and investment decisions outside of core activity and related to new lines of business. Chaired by our deputy chief executive.

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New energy frontiers steering committee: oversees strategy and development of growth opportunities in low carbon business models that can be scaled up to create new businesses for BP. Chaired by our deputy chief executive.

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Carbon steering group: focuses on strategy, policy, performance oversight and collaboration across the group relating to carbon management activities across the group. Chaired by our vice president of carbon management.

Upstream carbon steering?
committee


Focuses on the delivery of lower carbon plans in the Upstream. Chaired by our chief operating officer of production, transformation and carbon, Upstream.

Downstream advancing the energy transition committee


Develops and drives the implementation of advancing the energy transition in the Downstream. Chaired by our head of technology, Downstream and BP chief scientist.

Note

Executive-level?committee
Cross-functional committee

Business and segment?committee

Field visits

In 2018 members of the?board visited our operations in Oman and the US to give them first-hand?experience of our assets and the chance to observe and ask questions.

Khazzan gas field, Oman

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Members met with site leaders and discussed the safety, risk and operating culture. They also heard from a local tribal leader who spoke about community interest in the development. During the trip, Melody Meyer, one of BP’s non-executive directors, visited our Muscat office and held a session with female employees to share her experience and insights on leadership attributes.?

Board member Melody Meyer in Muscat
Board members visiting Cooper River
Cooper River, the US

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Cooper River is one of the world’s largest producers of purified terephthalic acid, used to make items such as clothes and plastic food packaging. Board members met with site leaders and discussed business emergency planning, safety, risk and operating culture at the petrochemicals plant. They also heard about new sustainability-related technologies.?

Thunder Horse, the US

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Board members saw how BP operates in the Gulf of Mexico when they visited our Thunder Horse platform. They met with employees and discussed operational risk management and safety culture. They also visited our Westlake campus in Houston and talked to employees about the response to Hurricane Harvey and saw the cyber security centre, trading floor and the wells monitoring centre.?

SEEAC board visit to Thunder Horse

Human rights governance

SEEAC has oversight of human rights, including review of our performance in assessing and managing risks associated with modern slavery.

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The group operations risk committee reviews progress on managing the potential risks of modern slavery.

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Our human rights working group, which is made up of representatives from across the business, considers current and emerging human rights risks of potential group significance, reviews existing and proposed management of such risks and escalates identified human rights risks to executive team level as necessary.

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Business functions and local operations are responsible for implementing actions to help us meet our human rights policy commitments and relevant group requirements, such as providing channels for local communities to raise concerns.? ??

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