Bloomberg.com: Shell to Provide Details `Soon’ on Governance Review (Update1)

Bloomberg.com: Shell to Provide Details `Soon’ on Governance Review (Update1)

June 16 (Bloomberg) — Royal Dutch/Shell Group, Europe’s second-largest oil company, said it will respond “soon” to investor calls for more information on a review of corporate governance after the company cut its oil and gas reserves.

“Shell is sensitive to and aware of these concerns and will make an announcement as soon as it is able,” said Matt Samuel, a Shell spokesman in London. Investors have been pressing Shell to give more details before an annual general meeting on June 28.

Calls for changes in Shell’s dual structure have increased since the company said on Jan. 9 that it had overstated proved reserves by 20 percent. Three smaller reductions followed. The structure has allowed Shell Transport & Trading Co. of London and Royal Dutch Petroleum Co. of The Hague to be run by separate boards since their 1907 merger.

Shell said April 19 a working group is “exploring all possibilities for improving governance and structure” and planned to give an update at its annual meeting. So far, the company has declined to say who is conducting the study.

In a letter to the Financial Times today, two U.S. shareholders, Knight Vinke Institutional Partners and the California Public Employees’ Retirement System, the largest U.S. pension fund, called for Shell to disclose more details of the review or face investors’ questions at the annual meeting.

“It was our collective hope and expectation that this rather basic information would be disclosed to shareholders concurrently with the agendas for the annual meetings,” Eric Knight, the managing director of Knight Vinke, and Ted White, Calpers’s director of corporate governance, wrote in the letter. “This opportunity has been lost.”

Jeroen van der Veer, who replaced Philip Watts as Shell’s chairman in March, said March 18 any changes to the structure will be proposed by late 2004 or early next year, and that the annual meeting in 2005 will decide the matter.

Shell has already made some changes, such as the appointment of a non-executive chairman to Shell Transport’s board. The company also plans to tighten controls on reserves by using outside experts to audit the assessments.

To contact the reporter on this story:

Alex Lawler in London at [email protected]

To contact the editors on this story:

Tim Coulter in London at [email protected]

Last Updated: June 16, 2004 04:31 EDT

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