Page 120 - Annual Report 2020

2.3 Role and responsibilities of the Board

BHP governance structure

Shareholders
The Board uses formal and informal communication channels to understand the views of shareholders to ensure they are represented in governing BHP.
For more information on shareholder engagement, refer to section 2.6.1.

Board
BHP’s purpose is to bring people and resources together to build a better world (our purpose). Our strategy is to have the best capabilities, best
commodities and best assets, to create long-term value and high returns (our strategy). Transformation, capital discipline and social value enable the
successful execution of our strategy.
Independence – The Non-executive Directors are considered by the Board to be independent of management. They are free from any business relationship
or other circumstance that could materially interfere with the exercise of objective, unfettered or independent judgement. For more information on the
process for assessing independence, refer to section 2.9.
Composition – The Board currently has 12 members. The Board believes there is an appropriate balance between Executive and Non-executive Directors
to promote shareholder interests and govern BHP effectively. The Board has fewer Executive Directors than is common for UK-listed companies,
but its composition is appropriate for the Dual Listed Company structure and is in line with Australian-listed company practice. In addition, the Board
has extensive access to members of senior management who frequently attend Board meetings. Management makes presentations and engages
in discussions with Directors, answers questions and provides input and perspective on their areas of responsibility. The Chief Financial Officer (CFO)
attends all Board meetings. The Board, led by the Chair, also holds discussions in the absence of management at each Board meeting. The Directors
of BHP, along with their profiles, are listed in section 2.2.1.

Role and responsibilities of the Board Matters reserved for the Board include
The role of the Board, as set out in the Board Governance Document, Succession
is to represent shareholders and promote and protect the interests • CEO appointment and determination of the terms of the appointment
of BHP in the short and long term. The Board considers the interests • Approval of the appointment of Executive Leadership Team (ELT)
of the Group’s shareholders as a whole and the interests of other members, and material changes to the organisational structure
relevant stakeholders. involving direct reports to the CEO
The Board Governance Document is a statement of the practices and Strategic matters
processes the Board has adopted to fulfil its responsibilities. It includes • Strategy, annual budgets, balance sheet management and
the processes the Board has implemented to undertake its own tasks funding strategy
and activities; the matters it has reserved for its own consideration and
decision-making; the authority it has delegated to the Chief Executive Officer • Determination of commitments, capital and non-capital items,
acquisitions and divestments above specified limits
(CEO), including the limits on the way the CEO can execute that authority;
and guidance on the relationship between the Board and the CEO. Monitoring
The Group Company Secretary is accountable to the Board and advises • Performance assessment of the CEO and the Group
the Chair and, through the Chair, the Board and individual Directors on all • Approving the Group’s values, Our Code of Conduct, purpose and
matters of governance process. risk appetite
• Management of Board composition processes and performance
The Board Governance Document is available Reporting and regulation
at bhp.com/governance. • Determination and adoption of documents (including the publication of
reports and statements to shareholders) that are required by the Group’s
constitutional documents, statute or by other external regulation

Chair CEO
The Chair is responsible for leading the Board and ensuring it operates The CEO is accountable to the Board for the authority that is delegated
to the highest governance standards. to the CEO and for the performance of the Group. The CEO works in a
constructive partnership with the Board and is required to report regularly
to the Board on progress.

Board Committees

The Board has established Committees to assist it in exercising its authority, including monitoring the performance of BHP to gain assurance that progress
is being made towards our purpose within the limits imposed by the Board.
Each of the permanent Committees has terms of reference under which authority is delegated by the Board.
These are available at bhp.com/governance.
Nomination and
Governance Committee Risk and Audit Committee Sustainability Committee Remuneration Committee
Oversees and monitors renewal Oversees and monitors financial Oversees and monitors material Oversees and monitors
and succession planning reporting, other periodic health, safety, environmental remuneration policy
and advises and makes reporting and external and and community matters and
recommendations on the internal audit and risk social value
Group’s governance practices
(See section 2.9) (See section 2.10) (See section 2.11) (See section 2.12)

118 BHP Annual Report 2020