Page 122 - Annual Report 2020

2.5 Key Board activities during FY2020

Adoption of governance reforms in Australia and the United Kingdom
In July 2018, the Financial Reporting Council released the UK Code and the Guidance on Board Effectiveness, and we comply in full.
We also comply with the third edition of the ASX Corporate Governance Principles and Recommendations (ASX Third Edition) published
by the ASX Limited’s Corporate Governance Council. In addition, we comply with the majority of the recommendations contained
in the fourth edition of the ASX Corporate Governance Principles and Recommendations (ASX Fourth Edition) which was released
in February 2019.
During FY2020, BHP implemented new policies and procedures in line with the UK Code and the ASX Fourth Edition, with an emphasis
in seven main areas. These are: enhanced role for the Board in relation to codes of conduct and whistleblowing: risk assessment and
management; diversity; requirement to disclose certain policies; consideration of stakeholder interests; engagement with the workforce
and oversight of workforce policies and practices; and an enhanced role for the Board in relation to culture.
Board Governance The Board Governance Document was updated to reflect our revised approach to risk management and reporting,
Document and committee and to reference the Board’s role in assessment and monitoring. In addition, areas relating to how information flows
Terms of Reference updates to the Board were clarified, and changes were made to reflect BHP’s revised purpose and strategy. Committee Terms
of Reference were also updated as set out below.
Enhanced role for the From a UK perspective, the main changes are to ensure the Code of Conduct and whistleblowing are a Board-level
Board in relation to responsibility, rather than a Committee responsibility, and to ensure the scope of reporting is ‘any matters of concern’.
codes of conduct The RAC Terms of Reference confirm that the RAC provides a report-out to the Board, which includes significant Code
and whistleblowing of Conduct matters reported to the RAC at its meetings. In addition, an independent investigations team has been
maintained within Ethics and Compliance, and its investigations and investigation trends are regularly reported to the
RAC. (See sections 2.10 (effectiveness of systems of internal control and risk management) and 2.15.)
Risk assessment The revised UK Code and ASX Fourth Edition were taken into account in the design of the Group Risk Framework and
and management approach to risk management and reporting. In addition, the Board Governance Document and RAC Terms of Reference
were amended to reflect our updated approach to risk management and reporting, including the importance of the
Board having oversight of both financial and non-financial risks, the RAC assisting the Board in monitoring that the Group
is operating with due regard to the risk appetite set by the Board, and that the Group Risk Framework deals adequately
with contemporary and emerging risks. (See section 2.10.)
Diversity of the board The Board Governance Document was aligned with new UK Code provisions by ensuring that appointments and
and senior management, succession plans for both Board and senior management are both led by the Nomination and Governance Committee.
and enhanced role for At the end of CY2020 we will have 33 per cent women on the Board. (See sections 1.6.1 and 2.9.)
nomination committee
Requirement to disclose BHP already disclosed its Communications Policy and Our Code of Conduct. The ‘Speaking up’ and ‘Anti-corruption’
certain policies sections of our Our Code of Conduct cover BHP’s whistle-blower and anti-bribery and corruption policies. Our Market
Disclosure policy has been updated for periodic market disclosures, including verification procedures. (See section 2.16.)
Consideration of BHP’s strategic framework, focus on social value, our purpose statement, section 172 statement, and risk appetite
stakeholder interests statement all reflect the consideration of external stakeholders in decision-making. (See sections 1.4.3 and 2.6.)
Engagement with the The Board and its Committees receive information related to the workforce through a range of channels, including
workforce and oversight direct engagement at Board meetings and site visits, the Engagement and Perception Survey (EPS) findings, gender
of workforce policies pay gap reports, and updates from the Chief Executive Officer and the Chief People Officer.
and practices In addition, as part of implementing the UK Code, the Chief People Officer presented to the Board a review of
workforce policies and practices to ensure these are consistent with the Group’s values and support its long-term
sustainable success. (See sections 1.4.3, 1.6 and 2.6.2.)
Enhanced role for the The Board, supported by the Committees, considers a range of qualitative and quantitative information in relation
Board in relation to culture to culture and monitors and assesses culture on an ongoing basis for alignment with our strategy, purpose and values.
Board and committee papers include workforce planning in the context of COVID-19, Engagement and Perception
Survey results, inclusion & diversity update, RAC report-outs on Code of Conduct investigations, the culture and
capability required to execute the strategy, and culture as a part of asset reviews. The Board Governance Document
was updated to expressly reference the Board’s role in relation to assessing and monitoring culture. (See sections 1.6,
2.6.2, 2.7 and 2.15.)

CEO and ELT succession In June 2020, we announced the appointment of Mr Lamont as
A major piece of work for the Board during FY2020 was CEO Chief Financial Officer, effective 1 December 2020. David has been
succession. For BHP, succession of the CEO is an ongoing process, the CFO of the ASX-listed global biotech company CSL Limited
which continues to work well in developing internal candidates for since January 2016. Prior to joining CSL, he was the CFO and an
this critical role. This year, Andrew Mackenzie retired as CEO and Executive Director at MMG from 2010. Peter Beaven will continue
Mike Henry was appointed CEO from 1 January 2020. The Board as CFO until 30 November 2020 to provide ongoing leadership
took account of Mike’s 30 years’ experience in the global mining through to Mr Lamont’s commencement, and will support Mr Lamont
and petroleum industry, spanning operational, commercial, safety, with handover into early 2021, after which he will leave BHP.
technology and marketing roles. As set out in section 1.4.3, in the In August 2020, CEO Mike Henry announced new roles and
45 days between being announced CEO-Elect and becoming CEO, appointments on the ELT. Ragnar Udd will become President
Mike Henry spent time engaging with employees from every asset Minerals Americas, effective 1 November 2020, replacing Daniel
and almost all major offices. In addition, Mike was able to get out Malchuk. Mr Malchuk will continue in the role until that time, and
and meet with other key stakeholders before COVID-19 struck, leave BHP at the end of CY2020. Laura Tyler commenced in the
and COVID-19 has subsequently reinforced the advantages of new role of Chief Technical Officer on 1 September 2020. This
an internal appointment. A critical component of succession at role is an expansion of her current position on the ELT as Chief
ELT level and below is the existence of a robust senior leadership Geoscientist. She will relinquish her concurrent role as Asset
program that operates across multiple organisational levels President Olympic Dam. Caroline Cox will become Chief External
to build, develop, renew, recruit and promote our leaders. Affairs Officer, effective 1 November 2020, replacing Geoff Healy.
The Board is actively engaged and oversees the development Mr Healy will continue in the role until that time, and leave BHP at
of the senior team. Following his appointment, Mike Henry has the end of CY2020. Johan van Jaarsveld commenced in the new
begun to announce the new senior management team and role of Chief Development Officer on 1 September 2020.
continued focus on assets and their performance.

120 BHP Annual Report 2020