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Investors press Shell to name executives under review

Financial Times: Investors press Shell to name executives under review

By Sundeep Tucker

Jun 15, 2004

UK investors in Shell Transport & Trading were left “disappointed and frustrated” yesterday after a meeting in London at which senior management failed to soothe their concerns over the slow pace of the company’s review into governance.

Lord Oxburgh, acting chairman, and Sir Peter Burt, senior independent director, met members of the influential investment committee of the Association of British Insurers as the Anglo-Dutch group’s UK arm attempts to rebuild bridges with its leading shareholders.

The oil giant, reeling after four reserves downgrades since January and subsequent management upheaval, has promised to review its complex Dutch-British corporate structure. But investors are growing impatient at the lack of transparency surrounding the process. They used the one-hour meeting yesterday to press home their demands for Shell to name the executives on the review, the group’s terms of reference and to whom it will report.

It is understood that Lord Oxburgh and Sir Peter declined to do so, but the pair did convince some investors that the review was wide ranging and that the company was considering the advantages of a large number of alternative structures.

Investors said that the duo received a “loud and clear” message that they were unhappy with the secrecy surrounding the review process and feared that Shell could miss a golden chance to prove that it had learned lessons from the reserves fiasco.

Shareholders left the meeting “slightly frustrated with the company and disappointed with the pace of the review”. Shell has promised to give an update of the review at the 2004 dual annual meetings in London and the Netherlands on June 28.

The outcome of yesterday’s talks makes it more likely that investors will take the unusual step of publicly questioning management at the meetings.

Many UK shareholders are planning representation at the London meeting and one said: “We are worried that the company is in denial about its problems.”

Shell featured at yesterday’s meeting of the full ABI committee. The result of the discussion makes it likely the ABI will issue an “amber top” warning to members over the company’s 2003 remuneration report.

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