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The Guardian: Shell in move to unite British and Dutch boards

The Guardian: Shell in move to unite British and Dutch boards

“Shell is poised to unify its British and Dutch boards in response to shareholder pressure”

David Gow

Wednesday August 4, 2004

Shell is poised to unify its British and Dutch boards in response to shareholder pressure over its repeated downgrading of its proven oil and gas reserves.

The energy group, fined £84m last week for misleading the market over its reserves, could even opt for a full merger or takeover among the two holding companies.

Royal Dutch owns 60% and Shell Transport & Trading 40% in a near century-old structure that has been savaged for its lack of accountability since the group cut its proven reserves by 20% in January. These have since been cut by a further 3%.

Jeroen van der Veer, Shell’s executive chairman, said yesterday: “We are looking at many different options. We rule nothing in and nothing out.”

After ringing the bell at the New York stock exchange to mark the 50th anniversary of Shell’s listing in the United States, he told Bloomberg TV: “We have to work through a lot of details to make sure something is viable and fair to all shareholders, and we are studying more or less everything that’s possible.”

Mr van der Veer, who replaced Sir Philip Watts earlier this year, has already indicated that shareholders agree that the split boards, topped by a combined executive committee, should be unified.

His spokesman said: “A number of possible structures and improvements to decision-making, accountability and enhancement of effective leadership are under active consideration.”

He added that various forms of unified boards, to which the chief executive would report, were being studied. A joint board, with executive and non-executive directors serving on each, is the minimum solution demanded by investors.

Shell has embarked on a review of its corporate governance, with a full report due by November. But Mr van der Veer, a protagonist of radical change, could announce initial conclusions when he gives an updated business strategy on September 22.

Eric Knight, of American fund Knight Vinke – which acts with Calpers, the California state pension fund – has been pressing for unified boards but wants shareholders to be consulted before decisions are taken. “We would very much like to hear about some progress in the governance review at the September meeting,” his spokesman said.

Shell, which made $4bn profits in the first quarter, saw its shares rise 2.6% in London as oil prices surged to a new high.,,1275480,00.html

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