bp, one of the world’s largest integrated energy companies, has subsidiaries in over 80 countries. Governance of these subsidiaries had traditionally been handled on a decentralised, country-by-country basis, using either third parties or in-house professionals from finance, tax, legal, or other areas.
Increased regulation around corporate reporting and transparency is driving a greater need for centralization in legal entity management and governance. In addition, bp is going through a period of considerable change, requiring it to be a nimbler, more agile organization with more efficient decision-making processes, improved data quality, transparency, proactivity, and automated processes to compete in a highly dynamic and competitive industry.
Client: BP p.l.c. - FTSE 100 global energy company
Our Role: Supporting bp’s governance function and processes across multiple subsidiaries around the world on a managed services basis.
Services: Risk & Regulation, Entity Governance & Compliance (EGC)
As a first step, PwC’s team of legal and governance professionals from more than 80 countries spent six months conducting an entity-by-entity assessment and benchmarking exercise that reviewed bp’s existing governance and compliance arrangements for every subsidiary in every country.
This PwC team identified room for improvement in a variety of practices and processes that had not been adapted to reflect the most recent deregulatory measures and in areas where greater use of technology and automation could enhance decision-making and record-keeping.
In order to address these challenges bp appointed PwC’s network of company secretaries as its lead governance manager in every country where bp operates. This team of PwC specialists provide support to the subsidiary boards by training directors on their duties and obligations, providing hands-on board meeting support to ensure informed and efficient decision-making, supporting the implementation of corporate transactions alongside tax, legal and treasury functions, and ensuring subsidiaries remain compliant with their corporate reporting and record keeping requirements, all in a centrally coordinated way.
“Partnering with PwC has given us the opportunity to leverage the breadth and depth of PwC knowledge and expertise in not only the latest legal entity governance requirements globally but also in company secretarial process improvements and use of technology.”
The central oversight and coordination has given bp the opportunity to drive standardization and simplification, enabling bp and PwC company secretarial teams to improve governance across the world. This includes being able to take advantage of deregulation and better use of technology where possible so that the governance function could spend more time supporting subsidiary boards and directors where it matters most.
Through this engagement PwC is helping enhance and streamline bp’s subsidiary governance so that regulation and risk can be managed more effectively, consistently and collaboratively as part of an integrated team with other stakeholders across bp. This has also enabled bp to meet the increasing demand for transparency and stakeholder reporting around the world, in particular the new corporate governance stakeholder reporting requirements in the UK where it is headquartered.
Transforming bp’s company secretarial practices continues to improve the quality of the company’s governance around the world. It enhances cost effectiveness and control, and improves support for decision-making, providing greater transparency, higher consistency, increased speed, and better reliability.
The governance and compliance challenges bp faces as part of the FTSE 100 are also common to global companies in the FTSE 350 and S&P 500.
“This global engagement is unique in the market, game-changing for bp. Together, we have flown the flag for subsidiary governance. It’s now a hot topic for all multinationals, driven by increased regulation and an appreciation of the risks associated with having disparate subsidiaries around the world operating on a decentralised basis.”
Partner, PwC United Kingdom
Senior Manager, PwC United Kingdom