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Shell General Business Principles

Screen Shot 2013-03-14 at 22.37.23“…THE SHELL GENERAL BUSINESS PRINCIPLES ARE A BEDROCK OF OUR SUCCESS, THROUGH TOUGH TIMES AND GOOD TIMES”: PETER VOSER, CEO

WHEN SHELL INTRODUCED ITS GENERAL BUSINESS PRINCIPLES IN NOVEMBER 1976 IT WAS ONE OF THE VERY FIRST COMPANIES IN THE WORLD TO DO SO.
Andrew Vickers, today’s guardian of the principles, explains why they were needed: “Historically, Shell had been a collection of disparate companies,” he says. “There was a feeling that we needed a collective statement of principles to enable us to conduct our business in a consistent way across our global operations. It was initially just one side of paper, but it provided the foundation for much of the Shell success story in the years since then.”Dynamic and relevant

The business principles have evolved over time with updates in 1984, 1988, 1990, 1994, 1997 and 2005.

Vickers says:

“Our Business Principles are dynamic and continually reflect the world outside. So, in the late 1980s and early 1990s, as the world become more aware of, and concerned by, issues around sustainability we adapted our principles accordingly. Equally, in 2005 after the collapse of Enron, we amended the principles to include strengthening compliance.”

Today, the Shell General Business Principles is an eight-page document in which the eight principles are outlined. They cover the following areas: economic; competition; business integrity; political activities;  health, safety, security and the environment; local communities; communication and engagement; and compliance. They are all underpinned by the core values of honesty, integrity and respect for people.

Vickers believes that the principles are as important in 2011 as they were in 1976.

He explains: “For me they’re a little haven of clarity in an increasingly complex and confusing world. When I have a difficult decision to make, or when I’m not sure how to resolve a thorny ethical dilemma, I take a look at the principles, or I discuss them with a colleague, and I usually find that they shed light on the topic and show me the way forward.”

He adds: “Interestingly, when Shell first introduced the principles there was some concern that they would be a source of competitive disadvantage. In fact, the opposite has been true. They demonstrate what we stand for and underpin the Shell brand and reputation.”

The Code of Conduct

Shell’s Code of Conduct sits alongside its General Business Principles, and it provides the company’s employees with specific ways to put those principles into action. It is a more detailed document which clearly states the rules, standards and expected behaviours for every single member of Shell’s workforce.

It covers: people and safety; fighting corrupt practices; national and international trade; safeguarding information and assets; and communications. It is important to recognise that these are more than just pieces of paper. They are central to the way Shell operates and are underpinned by a compliance and controls infrastructure.

Screen Shot 2013-03-14 at 22.39.34Linda Szymanski, Chief Ethics and Compliance Officer, explains: “Each employee has training on the Principles and the Code. More detailed training is required, depending on the risks associated with one’s role. We aim to help our people understand why the Principles and the Code matter and what they can do to live by them in their work for Shell.”

She continues: “We also employ a team of compliance officers, who are there not only to monitor adherence, but also, together with our lawyers, to advise their colleagues in appropriately navigating difficult situations.

It is worth noting that our compliance responsibilities are not limited to just those people with compliance in their job titles – it is a core part of the work and accountability of every manager and every employee.” On top of this there is a helpline for anyone who needs advice about how they should behave or who has concerns to report. Importantly, anyone who reports good faith concerns is protected from retaliation. And finally, Szymanski adds: “Shell leaders play a vital role. They set an example and help show everyone else what it means to live by Shell’s Principles.”

A daily challenge

In an organisation of 90,000 people, stretching around the globe in roughly 90 countries, it is not easy to ensure complete adherence to the principles. Laws differ country by country, new laws crop up all the time, and increasingly the laws of some nations need to be considered outside their borders. For example, the UK Bribery Act and the US Foreign Corrupt Practices Act are potentially relevant whether you are considering hosting clients at a Grand Prix in Silverstone, Bahrain or Sao Paolo.

Szymanski describes maintaining compliance as a daily challenge, and Vickers points out that we aren’t always completely successful. Indeed in 2010, Shell was fined for breaking anti-bribery laws because Panalpina, a Swiss freight company, paid bribes on behalf of Shell in Nigeria. Shell co-operated fully with the US Department of Justice, paid its fines of $48 million, and disciplined or dismissed any Shell staff who were involved.

“The fact is breaches can happen,” says Vickers. “What we must do as an organisation is to make sure our people know what is expected of them, give them all the tools they need to behave correctly, and then if they fail to do so we must co-operate fully with the authorities, accept our responsibilities and make it clear to all employees that we take our Principles seriously. Shell’s robust Assurances process is a tool to help ensure compliance. There are serious consequences for breaches, including dismissal. ”

Extending the Code

Some believe that in difficult economic times, companies should worry less about ethics and more about profits. In his recent preface to the Code of Conduct, Shell CEO Peter Voser made it clear he disagrees. He wrote: “As we strive to improve our performance in a fast-changing, competitive world, we should always remain true to our core values and the Shell General Business Principles. They are a bedrock of our success, through tough times and good times.”

So, the company is about to launch its Principles for Suppliers. Vickers concludes:

“Wherever we operate, be it directly or through a third party, we need to try to ensure that we are acting as a force for good.”

“…OUR COMPLIANCE RESPONSIBILITIES ARE NOT LIMITED TO JUST THOSE PEOPLE WITH COMPLIANCE IN THEIR JOB TITLES – IT IS A CORE PART OF THE WORK AND ACCOUNTABILITY OF EVERY MANAGER AND EVERY EMPLOYEE”: LINDA SZYMANSKI, CHIEF ETHICS & COMPLIANCE OFFICER

To view Shell General Business Principles and the Code of Conduct, please visit: www.shell.com/sgbp

SHELL SOURCE INTERNAL PUBLICATION SHELL WORLD WINTER 2011

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