31 May 2006
By John Donovan
On 16th May I attended the inaugural Royal Dutch Shell Plc AGM located in West London. This was the downgraded (satellite) venue for what are evidently considered to be second class Shell shareholders. I refer to the former shareholders in Shell Transport and Trading Company Plc.
Not a single board member of Royal Dutch Shell Plc was present. Instead we watched the granite faced retiring Royal Dutch Shell Chairman, Aad Jacobs, on a giant video screen during a long-drawn-out AGM with shareholder questions alternating between the two AGM venues – one in Holland and the other in the UK.
The Chairman gave a blunt response when a shareholder in London sensibly suggested that the AGM should itself alternate between London and The Hague. This was immediately ruled out by the arrogant Mr Jacobs on the basis that the permanency of the AGM being held in the Netherlands was a non-negotiable Dutch imposed condition of the unification. It is apparently not an issue open to debate by mere shareholders – the parties who actually own the company.
Although it is true that Shell Transport was always a junior (40%) partner in the Royal Dutch Shell Group, it was in fact a major multinational company in its own right. Shareholders in that business are now reduced to being nothing more than minority shareholders in what is in effect a foreign run business with an overseas HQ; a plc which is registered in the UK for tax purposes.
The AGM was a shambles. It dragged on for several tedious hours until a considerable proportion of shareholders had abandoned their hand held electronic voting devices (in my case after five hours) and moved into the buffet area. The discarded voting devices were left on seats with the validation cards still inserted, thus allowing anyone remaining in nearby seats to have extra votes.
The reason for the marathon sleep invoking AGM was that most of the shareholders asking questions had reams of paper with long lists of questions, many of them boring and similar to questions already raised. Those who self-evidently most liked hearing the sound of their own voices naturally had the longest lists. If I recollect correctly, in the days of Sir John Jennings, questions were rationed to one per shareholder.
Shell directors obviously cannot win on this issue because they will be criticised for limiting the number of questions per shareholder, or for allowing an unrestricted number of questions per shareholder (which disrupted proceedings including the voting). There must surely be a reasonable balance between these extremes.
To the best of my knowledge none of the media reports on the AGM commented on the repeated questions put to Shell CEO, Jeroen van der Veer, on why he insists on local management dealing with contentious issues autonomously. Mr van der Veer said that he had once been the manager of a Shell refinery and he would have been angry if someone had gone over his head to bring an issue to the attention of senior management. This line of defence allowed Mr van der Veer to evade requests for his intervention in relation to Shell problem hotspots around the globe e.g. the Corrib pipeline project in Ireland. He and his fellow executive directors can now be left to concentrate on “strategy” and enjoying perks, such as the fleet of luxury executive jets, without being concerned with less important issues, such as the possible extinction of grey whales.
I have been informed by someone who knows Mr van der Veer that he is a highly intelligent, decent man. To me, he came across during the AGM as a calculating, cold-blooded and dogmatic individual totally lacking charisma and, like the chairman, possessed of the arrogance which appears to afflict most Shell executives. Perhaps because he was speaking English in a dull monotone, what he had to say had more than a hint of automation about it. Overall, Mr van der Veer does not inspire confidence. This is my personal view. All comments are welcome.