BP (BP)

How our board governs the Company

        The board's governance policies regulate its relationship with shareholders, the conduct of board affairs and the board's relationship with the group chief executive. The policies recognize the board's separate and unique role as the link in the chain of authority between the shareholders and the group chief executive. It is this unique task that gives the board its central role in governance.

        The dual role played by the group chief executive and executive directors as both members of the board and leaders of the executive management is also recognized and addressed. The policies require a majority of the board to be composed of independent non-executive directors. To assure the integrity of the governance process, the relationship between the board and the group chief executive is governed by the non-executive directors, particularly through the work of the board committees they populate.

        Recognizing that as a group its capacity is limited, our board reserves to itself the making of broad policy decisions. It delegates more detailed considerations involved in meeting its stated requirements either to board committees and officers (in the case of its own processes) or to the group chief executive (in the case of the management of the Company's business activities). The board governs BP through setting general policy for the conduct of business (and critically, by clearly articulating its objective) and by monitoring its implementation by the group chief executive.

        To discharge its governance function in the most effective manner, our board has laid down rules for its own activities in a board process policy. The board process policy covers:

—

The conduct of members at meetings;



—

The cycle of board activities and the setting of agendas;



—

The provision of timely information to the board;



—

Board officers and their roles;



—

Board committees — their tasks and composition;



—

Qualifications for board membership and the process of the nomination committee;



—

The evaluation and assessment of board performance;

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—

The remuneration of non-executive directors;



—

The process for directors to obtain independent advice; and



—

The appointment and role of the company secretary.

        The responsibility for implementation of this policy is placed on the chairman.

        The board-executive linkage policy sets out how the board delegates authority to the group chief executive and the extent of that authority. In its goals policy, the board states the long-term outcome and required results it expects the group chief executive to deliver. The restrictions on the manner in which the group chief executive may achieve the required results are set out in the executive limitations policy. This policy addresses internal control, risk preferences, financing, ethical behaviour, health, safety, the environment, treatment of employees and political considerations. Through the goals and executive limitations policies, the board shapes BP's values and standards.

How our board governs the Company

        The board's governance policies regulate its relationship with shareholders, the conduct of board affairs and the board's relationship with the group chief executive. The policies recognize the board's separate and unique role as the link in the chain of authority between the shareholders and the group chief executive. It is this unique task that gives the board its central role in governance.

        The dual role played by the group chief executive and executive directors as both members of the board and leaders of the executive management is also recognized and addressed. The policies require a majority of the board to be composed of independent non-executive directors. To assure the integrity of the governance process, the relationship between the board and the group chief executive is governed by the non-executive directors, particularly through the work of the board committees they populate.

        Recognizing that as a group its capacity is limited, our board reserves to itself the making of broad policy decisions. It delegates more detailed considerations involved in meeting its stated requirements either to board committees and officers (in the case of its own processes) or to the group chief executive (in the case of the management of the Company's business activities). The board governs BP through setting general policy for the conduct of business (and critically, by clearly articulating its objective) and by monitoring its implementation by the group chief executive.

        To discharge its governance function in the most effective manner, our board has laid down rules for its own activities in a board process policy. The board process policy covers:

—

The conduct of members at meetings;



—

The cycle of board activities and the setting of agendas;



—

The provision of timely information to the board;



—

Board officers and their roles;



—

Board committees — their tasks and composition;



—

Qualifications for board membership and the process of the nomination committee;



—

The evaluation and assessment of board performance;

135

—

The remuneration of non-executive directors;



—

The process for directors to obtain independent advice; and



—

The appointment and role of the company secretary.

        The responsibility for implementation of this policy is placed on the chairman.

        The board-executive linkage policy sets out how the board delegates authority to the group chief executive and the extent of that authority. In its goals policy, the board states the long-term outcome and required results it expects the group chief executive to deliver. The restrictions on the manner in which the group chief executive may achieve the required results are set out in the executive limitations policy. This policy addresses internal control, risk preferences, financing, ethical behaviour, health, safety, the environment, treatment of employees and political considerations. Through the goals and executive limitations policies, the board shapes BP's values and standards.