Corporate governance Corporate governance Introduction from the chairman 72 Board of directors 74 Leadership team 78 Board activities 80 Decision making by the board 82 How the board has engaged with shareholders, the workforce and other stakeholders 86 Governance framework 88 Learning, development and induction 90 Board evaluation 91 People and governance committee 92 Audit committee 94 Safety and sustainability committee 100 Geopolitical committee 102 Directors’ remuneration report 103 Remuneration committee 105 Directors’ statements 127 Since 2017 when the partnership with bp began, Lightsource bp has more than doubled its global presence, from five to 14 countries. It’s also grown its development pipeline from 1.6 to 17GW. bp Annual Report and Form 20-F 2020 71 Introduction from the chairman New strategy Indeed, the COVID-19 pandemic justified more As a board, our responsibilities include regular meetings with bp’s leadership – so early determining bp’s purpose and strategy, in the pandemic we instituted weekly calls to monitoring its culture and seeking assurance that keep abreast of bp’s response to the pandemic these are aligned with our values. For bp, 2020 and how the team was taking account of the was a year in which we felt this responsibility needs and expectations of all our stakeholders. especially keenly. With the board’s support, bp Maintaining bp’s culture adopted a new purpose – reimagining energy Since joining bp, I have always been impressed for people and our planet, which aligns bp’s at the strength of the company’s culture – open, capabilities and aspirations with the needs co-operative, collaborative and performance- of society. focused. Rather than weaken that culture, I 2020 was also the year bp’s new CEO, Bernard believe that the pandemic has strengthened it Looney, commenced his role. As well as further – and has proved its value. bp would not formally launching our new purpose, Bernard have achieved all it did in 2020 without such a set out a net zero ambition, new strategy, strong culture. We have been careful that the 2020 tested bp’s governance financial frame and investor proposition. These changes introduced throughout the year are actions were taken with the full support of the respectful of it, and consistent with bp’s values processes like no other year. board following a process of careful debate, and of safety, respect, excellence, courage and Board members, like many the board is confident that they respect bp’s one team. culture and values. colleagues across bp, have Board composition achieved and learned a lot The change that was immediately most In 2020 we welcomed Tushar Morzaria, Karen consequential for many people within bp Richardson and Johannes Teyssen to the board. together through our new was a restructure that will see close to 10,000 They each have skills, experience and a diverse way of working – and there’s colleagues leave bp. It was difficult saying mindset that is closely aligned to the strategic goodbye to people who helped make our direction we have set for bp. much that we will continue. organization what it is today – and the board I am grateful for the flexibility, was united with the leadership team in We also said goodbye to friends who have commitment and clear- determining that the process should be served bp with distinction over many years conducted fairly and respectfully. – Nils Andersen, Brian Gilvary, Sir Ian Davis, sightedness of my board Dame Alison Carnwath and, of course, Bob colleagues in 2020 – it bodes That process is now largely complete, and Dudley. bp has been fortunate to have them, I believe, as does the board, that bp is now and we will miss them. well for the years ahead. leaner, flatter and nimbler – better able to fulfil our new purpose, ambition and strategy. I was delighted that Paula Reynolds agreed to take over from Sir Ian Davis as senior Helge Lund COVID impact on working of the board Chairman independent director following the AGM 2020, Change on this scale would be challenging in any and that Melody Meyer was able to take over company at any time. So, I want to pay tribute to the important role of chairing the safety and my board colleagues for their contribution during sustainability committee after Nils Andersen such a difficult period. It is to their credit that we stepped down from the board. Tushar Morzaria very quickly adapted to a new way of working will take over as chair of the audit committee together – with our many meetings since March after the AGM in May, following an extensive held entirely virtually. handover from Brendan Nelson, who will then retire. 72 bp Annual Report and Form 20-F 2020 Corporate governance In the coming year, one of my priorities will be The governance framework redefines the to ensure that the board remains at an appropriate committees’ roles. Our newly-titled safety Compliance with the UK Corporate size, with strong composition, and with diversity and sustainability committee rightly gains an Governance Code of both thought and skills in support of the enhanced focus on sustainability, but with no Throughout 2020, bp applied the principles strategic direction we have set. let-up on our core and overriding priority – safety, and complied with all the provisions of the while our people and governance committee 2018 UK Corporate Governance Code. Diversity gains an enhanced focus on our single most The process of reinventing bp provided important asset – our people. These committees opportunities to enhance bp’s diversity in other and the insights they provide to the board very ways, too. Though we have more to do in all much support its effectiveness. areas, we have made particular progress on gender diversity at senior levels. In 2020, we Conclusion increased female board representation from 2020 tested bp’s governance processes like no 42% to 45%; increased female executive other year. Board members, like many colleagues committee representation from 15% to 31%; across bp, have achieved and learned a lot and met the Hampton-Alexander and Parker together through our new way of working – review targets for 2021. and there’s much that we will continue. I am grateful for the flexibility, commitment and New governance framework clear-sightedness of my board colleagues in To complement bp’s new strategic direction, 2020 – it bodes well for the years ahead. we have introduced a new governance framework, covering bp’s board-level corporate governance and facilitating a stronger board focus on strategy, performance, people and governance, with the committees each playing a critical role in support. The emphasis on strategy and its execution is especially important – I believe it to be where the board can deliver Helge Lund, most value at this time, encouraging and working Chairman closely with the leadership team as they drive 22 March 2021 forward our strategic progress, safety, financial and operational performance. bp Annual Report and Form 20-F 2020 73 Board of directors As at 22 March 2021 P Helge Lund Bernard Looney Murray Auchincloss Chairman Chief executive officer Chief financial officer Appointed Appointed Appointed Board: 26 July 2018; Chairman: 1 January 2019 5 February 2020 1 July 2020 Nationality Nationality Nationality Norwegian Irish Canadian Outside interests Outside interests Outside interests Chairman of Novo Nordisk AS; Operating Advisor Fellow of the Royal Academy of Engineering; Board member of Aker BP ASA; Member of to Clayton Dubilier & Rice; Member of the Board of Fellow of the Energy Institute; Mentor for the The 100 Group Main Committee Trustees of the International Crisis Group; Member FTSE 100 Cross-Company Mentoring Executive Career summary of the European Round Table of Industrialists Programme; Non-executive director of Rosneft Murray Auchincloss qualified as a chartered financial Career summary Career summary analyst in the US, leading on to a wide range of tax Helge Lund was appointed chairman of the bp board Bernard Looney was appointed chief executive officer and financial roles, first for Amoco and then for bp on 1 January 2019. He served as chief executive of BG in February 2020. He previously ran bp’s Upstream after the two organizations merged in 1998. Murray Group from 2015 to 2016, when it merged with Shell. business from April 2016 and has been a member of has worked in both the US and UK, in a range of He joined BG Group from Equinor (formerly Statoil) the company’s executive management team since roles including chief financial officer, Upstream, where he served as its president and chief executive November 2010. As chief executive, Upstream, Bernard and chief financial officer, North Sea. He was officer for 10 years from 2004. Prior to Equinor, Helge was responsible for bp’s oil and gas exploration, commercial director for the North American Gas was president and chief executive officer of the development and production activities worldwide. In this business and, as head of the chief executive’s office industrial conglomerate Aker Kvaerner, and has also role, Bernard oversaw improvements in both process and for three years, managed all aspects of that office. held executive positions in the Norwegian industrial personal safety performances, and production grew by Skills and experience holding company, Aker RGI, and the former Norwegian 20%. He led access into new countries, high-graded the power and industry company, Hafslund Nycomed. He portfolio and created innovative new business models. In Murray’s financial expertise, experience and knowledge worked as a consultant with McKinsey & Company earlier Upstream executive roles, he was responsible for make him a trusted advisor and bp group leader. His and served as a political advisor for the parliamentary all bp-operated oil and gas production worldwide and for broad experience of working across the group has group of the Conservative party in Norway.