Page 141 - Annual Report 2020

Compliance with the UK Corporate Governance Code 2018
This section describes how BHP has applied the Principles of the UK Code Strategic Report

Board leadership and company purpose Composition, succession and evaluation
– Long-term sustainable success – we believe we put – Appointments – we have a rigorous process in place
the long-term sustainable success of BHP at the centre for Board appointments, and to consider succession
of what we do (section 1.4.2 and 1.4.3). having regard to diversity of gender, social and ethnic
– Purpose, values, strategy and culture – we renewed backgrounds and personal strengths (section 2.9). 2
our purpose in FY2019 to better capture the aspirations – Skills matrix – we have an appropriate mix of skills,
of all our stakeholders (sections 1.4.1, 1.4.2, 1.4.3, experience and knowledge on the Board and in 2018
1.6 and 1.7). revised our skills matrix (section 2.7). Section 2.9
– Performance measurement and control framework provides information on tenure and Board renewal.
(sections 1.4 and 6.6). – Director review – the contribution of each Director Governance at BHP
– Responsibilities to shareholders and stakeholders to the work of the Board and its Committees, the
(sections 1.4.2, 1.4.3, 1.6.1 and 2.6). expectations of Directors as specified in BHP’s
– Workforce policies and practices (sections 1.4.2, 1.4.3, governance framework and the performance of
Directors. The review confirmed that each Director
1.6.1, 1.6.2 and 2.6). continues to contribute effectively (section 2.8).

Audit Risk and Internal Control Remuneration Report
– Internal and external audit independence –
we understand the importance of ensuring these lines
of defence remain independent (section 2.10).
– Fair balanced and understandable – the Board presents
Division of responsibilities a fair balanced and understandable assessment of BHP’s
– Chair of the Board – the Chair leads the Board and position and prospects (section 2.10).
is responsible for its effectiveness and the effective – Management and oversight of risk – our risk and
contribution from all Non-executive Directors control environment is monitored and overseen by the
(section 2.3). Risk and Audit Committee. The Board, Risk and Audit Directors’ Report
– Board composition – the Board operates effectively Committee, and Sustainability Committee considered
with the appropriate balance of executives and emerging and principal risk during the year (sections
Non-executives and believes the roles of the Chair 1.5.4, 2.5, 2.10 and 2.11).
and the CEO should be separated (section 2.3).
– Non-executive Directors have sufficient time to meet
their responsibilities – when we appoint new Directors
we ensure they have sufficient time to undertake Remuneration
their responsibilities and are able to offer challenge, – Policies and practices – remuneration is designed to
strategic guidance and specialist advice (section 2.2.1). support our strategy and long-term sustainable success
– Time and resources – the Board ensures it has (section 3).
the necessary time, resources, policies and processes – Formal and transparent procedure – we have formal and Financial Statements
in place as part of its evaluation process (section 2.8). transparent procedures in place, and routinely engage
with investors for their feedback (section 2.6.1).
– Use of discretion – we have used discretion to adjust the
formulaic remuneration outcomes (section 3).

2.18 Additional UK disclosure Additional information
The information specified in the UK FCA Disclosure and
Transparency Rules, DTR 7.2.6, is located elsewhere in this Annual
Report. The Directors’ Report in section 4 provides cross-references
to where the information is located.
This Corporate Governance Statement was current and approved
by the Board on 3 September 2020 and signed on its behalf by: Shareholder information

Ken MacKenzie
Chair
3 September 2020

BHP Annual Report 2020 139