Royal Dutch Shell Plc  .com Rotating Header Image

The Times: Shell investors reject key proposal

The Times: Shell investors reject key proposal

From AFP in London and The Hague

June 28, 2004

Royal Dutch Shell survived a shareholder rebellion on Monday, but not before investors representing almost 40 per cent of its Dutch stock voted against a key resolution in The Hague, rejecting the annual proposition that accepts that the board had discharged its duties adequately.

Shareholders at the London half of the company’s twin-centred annual meeting also showed their disapproval of the company’s disastrous year of reserves downgrades and management sackings, with a 10 per cent vote against the group’s executive remuneration package.

Institutional Shareholder Services, a US-based group that advises shareholders on corporate governance issues, had been urging investors to oppose two key motions at the Royal Dutch shareholder meeting in The Hague.

“Each year shareholders are proposed a resolution essentially to review the performance of the board from the previous year and to sign off the board’s actions, and we’ve advised shareholders to withhold for this year because of the board’s actions surrounding the reserves,” the ISS’s director of research, Stanley Dubiel, said.

Earlier, Shell had moved to head off investor disquiet at its annual meeting by announcing that the majority of the oil and gas reserves that it was forced to reclassify last year will now be added back to its estimate of proved reserves.

“We expect to start returning reserves to the proved category this year,” said Malcolm Brinded, Shell’s new head of exploration and production at the Anglo-Dutch giant.

He said the group was expecting to re-book some 85 per cent of the reserves that were reclassified when it was found that the amount of oil and gas likely to be unearthed from recent discoveries had been significantly overstated.

Shell is still struggling to recover from the scandal, which saw it lower its estimate of proven oil stocks on four occasions, by a total of more than 20 per cent.

“There can be explanation but there can be no excuse,” Mr Brinded said.

“Rebuilding our reserves has to be a major priority to this group. Such a crisis should never have happened. Unfortunately it has.”

If Mr Brinded’s estimate of the level of reserves which can be reclassified proves correct, the proportion of stocks downgraded will fall to 3 per cent.

Chairman Lord Oxburgh, facing his first public grilling since being brought in to steady the company in March, made the clearest effort yet to distance himself and his colleagues from the actions of the former regime. “There was no cover-up,” Lord Oxburgh said.

“The first time non-executive directors were aware of the problem was early January.

“When some of the executive directors were as economical with the truth as they were… it’s very difficult to see how it [the scandal] could have come to light sooner on the information they had.”

The crisis at Shell has led to the departure of several top brass, including chairman Sir Philip Watts, head of exploration and production Walter van de Vijver and finance director Judy Boynton.

Sir Philip’s £1 million pay-off, announced last week, is also sure to create friction.

Lord Oxburgh went on to defend Sir Philip’s severance terms, details of which were announced Friday, and described by one small shareholder as “a world class salary for a world class scandal”.

“We were advised to move swiftly and seek a separation by mutual agreement,” Lord Oxburgh said.

Jeroen van der Veer, the group’s top executive, told the Royal Dutch meeting in the Hague: “These recent months have felt simply dreadful.

“I agree that such a crisis should never have happened. But it has, and I sincerely regret this.”

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.