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Still Shell-shocked

The Independent: Still Shell-shocked: “a company which is obviously still in denial”

They went to listen to Big Ron, but sadly, answers came there none. No one expected the chairman of Shell Transport & Trading, Lord Oxburgh (Ron, apparently, to his fellow directors) to have the mating habits of the grey whale at his fingertips or the precise geography of the Niger delta committed to memory.

But it wasn’t only the environmentalists who turned up at yesterday’s annual meeting that found themselves entering an information-free zone. Ordinary investors seeking a glimpse of the new-look streamlined, simplified and transparent Shell also went away none the wiser.

Shell had promised investors an update on the progress of the review into its corporate structure. The mere fact that it had to hold separate AGM’s in London’s Docklands and the Hague in order to do that says about as much as needs to be said about what is wrong with the current set-up.

In the event, Big Ron was unable to deliver. He is a decent enough cove but he is clearly way out of his depth and he is chairing, in name if nothing else, a company which is obviously still in denial.

One shareholder asked why the annual report for 2003 failed to include biographical details of the three board directors who had been fired after the year-end for inventing oil and gas reserves. Ron gamely replied that Shell would rectify that omission should it ever find itself in a similar position again. Inspired stuff.

As to why the misreporting (please don’t call it deceit) went on for so long, Ron said that he and his fellow non-executives could not have been expected to know earlier how far the wool was being pulled over their eyes because the directors in question had been “economical with the information”.

No more economical, alas, than the new Shell management has proved to be since. The identity of those board members conducting the review of Shell’s structure, and their terms of reference, had to be dragged from the company.

To take another example, when Sir Philip Watts was frogmarched out of the chairman’s office one evening in early March, Shell said it was far too early to say if he would get a pay-off. Yesterday shareholders were let into the little secret that his severance terms had, in fact, been sown up inside three hours on the night in question. Quite why it then took Shell another three and a half months to announce the details of his pay-off, shareholders were not told.

If Shell cannot manage something as simple as paying the minimum amount legally required to a director who has presided over its worst crisis in the century it has existed, then it does not augur well for the much bigger job of dragging the company into the next one.

As usual, institutional shareholders were thin on the ground yesterday although the National Association of Pension Funds would probably argue that getting five of them to stand up and ask a question classed as an amazing turnout.

It was left therefore to the small shareholders to carry the baton. The one who suggested that Shell continues to inhabit a parallel universe got it just about right.

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