Page 131 - Annual Report 2020

Board succession Strategic Report

Step 1: BHP adopts a structured and rigorous approach to Board succession planning and oversees the development
Rigorous approach of a diverse pipeline. The Nomination and Governance Committee considers Board diversity, size, tenure and
the skills, experience and attributes needed to effectively govern and manage risk within BHP.
Step 2: This process is continuous and for Non-executive Directors planning is based on a nine-year tenure as a guide,
Continuous approach allowing the Board to ensure the right balance on the Board between experience and fresh perspectives. It also
ensures the Board continues to be fit-for-purpose and evolves to take account of the changing external
environment and BHP’s circumstances. It also prepares pipelines for Nomination and Governance Committee
membership, considering relevant skills and requirements. 2
Step 3: When considering new appointments to the Board, the Nomination and Governance Committee oversees the
Role description preparation of a role description, which includes the criteria and attributes described in the Board Governance
Document and section 2.7.
Step 4: The role description is provided to an external search firm retained to conduct a global search based on the
Selection and appointment Board’s criteria. Governance at BHP
of search firm
Step 5: The shortlisted candidates are considered by the Nomination and Governance Committee and interviewed
Board interviews by the Chair initially. Meetings for selected candidates are held with each Board member ahead of the Board
deciding whether to appoint the candidate.
Step 6: The Nomination and Governance Committee recommends the Board appoint the preferred candidate.
Committee
recommendation
Step 7: The Board, with the assistance of external consultants, conducts appropriate background and reference checks. Remuneration Report
Background checks
Step 8: The Board has adopted a letter of appointment that contains the terms on which Non-executive Directors will be
Letter of appointment appointed, including the basis upon which they will be indemnified by the Group. The letter of appointment defines
the role of Directors, including the expectations in terms of independence, participation, time commitment and
continuous improvement. Written agreements are in place for all Non-executive Directors.

A copy of the terms of appointment for Non-executive Director induction, training and development
Directors is available at bhp.com/governance.
Upon appointment, each new Non-executive Director
undertakes an induction program tailored to their needs.
Senior management succession Directors’ Report
A robust senior management succession process is also A copy of an indicative induction program is available
at bhp.com/governance.
conducted to ensure pipeline stability for critical roles. A talent
deep dive is conducted by the Board at least once a year to Following the induction program, Non-executive Directors
evaluate these pipelines. Senior management succession is participate in continuous improvement activities (training and
viewed from a five-year perspective that considers the readiness development program), which are overseen by the Nomination
of successors across time horizons, contexts and future capability and Governance Committee. The training and development
demands. Select Board members are involved in the interview program covers matters of a business nature, including
process for executive-level appointments one level below environmental, social and governance matters and provides
the CEO, and occasionally for roles two levels below the CEO. updates on BHP’s assets, commodities, geographies and
BHP has a written agreement with each ELT member setting markets. Programs are designed and periodically reviewed
out the terms of their appointment. Further information about to maximise effectiveness, and the results of Director Financial Statements
CEO and ELT succession is set out in sections 2.1 and 2.5. performance evaluations are incorporated into these programs.
Training and development in FY2020
Area Purpose FY2020 activity
Briefings and Provide each Director with a deeper understanding • Strategy day with the ELT
development of the activities, environment, key issues and • Climate change sessions
sessions direction of the assets, along with HSEC and public
policy considerations. • Briefing on ESG issues from senior investor representative
• WAIO deep dive
Site visits Briefings on the assets, operations and other • BMA, Metallurgical Coal, Australia (Group Chair only)
relevant issues and meetings with key personnel. • Jansen, Potash, Canada Additional information
During FY2020, several site visits were cancelled
due to COVID-19 restrictions. • Nickel West, Nickel, Australia
• NSWEC, Thermal Coal, Australia
• Olympic Dam, Copper, Australia
• Santiago office and Escondida, Copper, Chile (Group Chair only)

These sessions and site visits also allow an opportunity to discuss development and committee composition. These processes are
in detail the risk environment and the potential for impacts on all relevant to the Nomination and Governance Committee’s role
the achievement of our purpose and strategy. For information in identifying appropriate Non-executive Director candidates.
on the management of principal risks, refer to section 1.5.4. Each Board committee provides a standing invitation for
Throughout the year, the Chair discusses development areas any Non-executive Director to attend committee meetings Shareholder information
with each Director. Board Committees review and agree (rather than just limiting attendance to committee members).
their needs for more briefings. The benefit of this approach Committee agendas and papers are provided to all Directors
is that induction and learning opportunities can be tailored to ensure they are aware of matters to be considered.
to Directors’ committee memberships, as well as the Board’s
specific areas of focus. This approach also ensures a coordinated
process on succession planning, Board renewal, training and

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