Governance report 2023

The governance report is published as part of the Annual Report and Accounts. You can download the full report or extracts from this page.

Introduction from the chair

Dear fellow shareholder,

Each year seems to bring more challenges for company boards - a more demanding operating environment in the context of geopolitical shifts, technology advancements and of course, the ongoing complexity of the energy transition. Our corporate governance framework was established in 2020, recognising the need for it to be both dynamic and flexible in its application to a range of different situations. Looking back on 2023, it’s safe to say that it has served us well. 

The framework provides a clear mandate and defines responsibilities for the board’s main committees. It has enabled the board to apply its time to the most important areas requiring its focus and expertise. 

In 2023 these included responding to an ever-changing macro environment and the appointment of a new chief executive officer (CEO) and chief financial officer (CFO). Underpinned by this framework, throughout the year, the board has extensively engaged with stakeholders – and with shareholders, in particular. This engagement has been particularly valuable and has informed the board’s discussions and decision making.

Executive director succession 

bp’s succession plans are routinely reviewed by the board’s people and governance committee and we were able to activate those plans swiftly last year.

The board appointed an interim CEO within hours of the former CEO’s resignation in September, implementing an emergency succession process for this most important executive role. Our governance framework provided a similarly clear structure for us to progress through to the permanent appointments of Murray Auchincloss (previously CFO) as CEO and, in turn, Kate Thomson as CFO. This was all achieved within five months of the former CEO’s departure. Although conducted at pace, the selection process was robust, competitive and resulted in full agreement among the board on the best candidates for these roles. 

Murray cares deeply about bp and its people. He brings in-depth understanding of the opportunities and challenges in the energy transition and he has demonstrated leadership that is focused on teamwork, performance and delivery. Kate’s appointment recognizes her detailed understanding of bp and the energy and finance sectors, combined with deep technical expertise. 

Throughout this period of change, the board has maintained a constructive and productive relationship with the leadership team. 

Focus on culture

As a board, we are conscious of our responsibility to assess and monitor bp’s culture and to seek assurance from the leadership team that corrective action is being taken where practices or behaviours are not aligned with the company’s ‘Who we are’ culture frame. With this in mind, a dedicated committee of the board was established in 2023 on an interim basis with a focus on psychological safety and speaking up. The committee’s work was supported by data-led analysis and workforce engagement sessions.

The committee has served us well and its activities have provided a fresh foundation for the people and governance committee to now assume its responsibilities supporting the board in its assessment and monitoring of culture. 

Purposeful engagement 

Among the most rewarding experiences in 2023 was to see first-hand some of the work bp is doing around the world, particularly meeting the people delivering our strategy on the ground.

Our safety and sustainability committee travelled to Indonesia and visited bp’s liquefied natural gas facility at Tangguh, seeing for themselves the positive effect of our operations on the local community. Members of the board also went to the US, visiting operations in the Permian Basin and the Thunder Horse platform in the Gulf of Mexico, and in the UK they met our internal audit and finance teams in Sunbury and the trading and shipping teams in London. 

I also enjoyed meetings with people across bp, learning more about the business and the challenges being faced – and these views have been reflected in our board conversations. This experience was complemented by our bespoke workforce engagement programme which allows my board colleagues to participate in small groups focusing on set themes. Having the themes aligned with the board’s agenda for the year gave us a good insight into the views and concerns of a broad range of the bp workforce and further informed our discussions and the decisions we have taken.

Board evolution 

Paula Rosput Reynolds and Sir John Sawers will both shortly reach the end of their nine years’ tenure on our board and will step down at the end of our annual general meeting in April 2024. I thank them for their valued service to bp.

I am pleased that Amanda Blanc will take on the role of senior independent director and for an interim period, Tushar Morzaria will become chair of the remuneration committee. Having undertaken a thorough assessment of time commitment the board is satisfied that they each have sufficient capacity to dedicate the time necessary for these roles. 

The board continues to evolve, and I am pleased to say that with over 50% female and over 20% ethnic minority representation we exceed both the targets set out in the new UK Listing Rules and the 2027 Parker Review targets relating to ethnic diversity on UK boards. There is, of course, always more to do and I thank my board colleagues for their dedicated service in 2023 and their ongoing commitment to your company.

Closing thanks

I would like to close by thanking the bp teams who have continued to operate bp safely and effectively and its leadership for their focus. And finally, I would like to thank you, fellow shareholders, for your continued confidence in bp.

Helge Lund

Chair