Corporate governance
bp’s corporate governance framework has a significant role enabling us to fulfil both our purpose – reimagining energy for people and our planet – and our net zero ambition.
The board has defined its responsibilities and an additional range of matters on which decision-making is reserved to itself – both of which are set out in its terms of reference. Click on the icons in our governance framework below for full details.
The board’s ways of working
To help the board fulfil its responsibilities consistent with its terms of reference, board meetings are structured around four pillars: strategy, performance, people and governance:
Strategy
StrategyStrategy is a core part of the board’s role. Working alongside the CEO and bp leadership team, the board shapes and ultimately sets bp’s purpose, strategy and values. The board reviews and assesses the strategy at board meetings as we work towards delivering our targets and aims.
Performance
Performancebp is committed to performing while transforming. To operate safely and reliably as we deliver on our strategy, the board reviews and seeks assurance of bp’s performance against the strategy and annual plan.
People
PeopleThe board assesses and monitors bp’s culture to ensure alignment with the company’s purpose, strategy and values. The board recognizes the importance of effective engagement with shareholders and other stakeholders and encourages participation from these groups. This includes seeking meaningful and regular dialogue with our workforce.
Governance
GovernanceThe board requires the CEO to oversee the implementation of a comprehensive system of internal controls and it reviews bp’s internal control and risk management frameworks. The board is accountable for ensuring that the company’s corporate governance is in line with its duties under UK corporate law, the FRC’s Corporate Governance Code, bp’s articles of association and its internal governance structure.
As part of the governance structure and in accordance with the Corporate Governance Code the board has documented the responsibilities of the chair of the board, the CEO and the senior independent director. These can be found below:
Board diversity, equity and inclusion policy
The board believes that better decision-making and better overall outcomes can be achieved when people from different backgrounds with different perspectives come together with a common ambition.
Board committees
The board has established four committees, some of which have roles that are prescribed under the UK’s corporate governance code, with the aim of supporting the board in fulfilling its responsibilities. These are the safety and sustainability committee, audit committee, people, culture and governance committee and remuneration committee.
Each committee operates under its own terms of reference together with a set of terms applicable to all the committees. The terms have been tailored to support the board and to enable more detailed, deeper-dive reviews to be undertaken in particular areas when required. Their differing responsibilities are set out in summary below. For full details please click on the relevant terms of reference.
The safety and sustainability committee focuses its oversight on the management of safety and sustainability matters which it considers to be most potentially material in the following areas:
- process safety and operational integrity
- security risks, personal safety and operational health risks
- operational environmental and social risks
- the implementation of bp’s sustainability frame
Members
The audit committee monitors the effectiveness of bp’s financial reporting, system of internal controls and risk management, and the integrity of the bp’s external and internal audit processes.
Members
The people, culture and governance committee leads the process for appointments to the board. This includes ensuring that plans are in place for an orderly succession to the board and leadership team as well as the development of a diverse succession plan.
The committee reviews workforce policies and practices and monitors their consistency with bp’s purpose, strategy and values. It also reviews developments in law, regulation and evolving practice relating to corporate governance.
Members
The remuneration committee determines the directors’ remuneration policy and sets the chair, executive director and leadership team remuneration.
It reviews workforce remuneration and monitors related policies, satisfying itself that incentives and rewards are aligned with bp’s culture and performance.