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Dubious Corporate Legacy of Sir Mark Moody-Stuart

Screen Shot 2016-02-18 at 14.41.35By John Donovan

Interesting to read that seven years after the departure of Sir Mark Moody-Stuart (right) as chairman of the mining giant Anglo American, the company is in difficulties.

See Dow Jones news article: Anglo American to Downsize Further After Steep Loss.

Apparently the troubled company is in the throes of “an aggressive restructuring.”

Reminiscent in some respects of the state of affairs at Shell during and after the tenure of Sir Mark as Group Chairman.

The Wall Street Journal reported in November 2004 “How Shell’s Move To Revamp Culture Ended in Scandal.

Extracts

Long known for its sober geological expertise and conservative image, the Anglo-Dutch energy giant in the 1990s embraced New Age management. 

This cultural revolution ultimately led Shell into one of the worst crises in its history as the company turned to accounting maneuvers to hide its failures in finding energy.

Presumably a reference to the “value creation teams” set up at Shell under Moody-Stuart. The teams lived up to their label by basically creating hydrocarbon reserves which did not exist.

The massive fraud led directly led to class action litigation and the eventual forced merger of Shell Transport & Trading Co Plc and Royal Dutch Petroleum Company into the new company, Royal Dutch Shell Plc. Shame someone forgot to register the .com domain name.

Sir Mark let the transformation process at Shell get completely out of hand, embracing the New Age nonsense and in doing so, laid the foundation for disaster.

Best analogy that springs to mind is a delayed action torpedo. In his case, companies are sunk between three and seven years after he retires as chairman.

Sir Mark is now a board member at Saudi Aramco. Despite its vast reserves, the state owned oil giant is facing uncertainty over its future (and especially so with him on board).

It remains to be seen if Sir Mark, bearing in my his dubious corporate track record, will be an asset or a liability.

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