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Bloomberg: Shell to Update Investors on Governance Next Month

Bloomberg: Shell to Update Investors on Governance Next Month

“Van der Veer, 56, is trying to regain investors’ confidence after the company said in January it had overstated oil reserves by a fifth. That led to an investigation by the U.S. Securities and Exchange Commission, the ouster of three top executives and the loss of Shell’s top-tier credit rating.”

Aug. 24 (Bloomberg) — Royal Dutch/Shell Group, Europe’s second-largest oil company, will update investors next month on its plan to improve corporate governance and hasn’t ruled out options, Chairman Jeroen van der Veer said.

Shell wants to ensure any changes are “fair” to all investors, Van der Veer said. The company began a review in March, after saying it had overstated oil reserves. Shell plans to make the results public in November, he said.

“We will give a short update on where we stand on the 22nd and 23rd of September, when we have a strategy update,” Van der Veer said at a conference in Stavanger, Norway. “We are working at incredible high speed, right through the summer season.”

Van der Veer, 56, is trying to regain investors’ confidence after the company said in January it had overstated crude-oil reserves by a fifth. That led to an investigation by the U.S. Securities and Exchange Commission, the ouster of three top executives and the loss of Shell’s top-tier credit rating.

Shell Transport & Trading Co. of London and Royal Dutch Petroleum Co. of The Hague have been run by separate boards since their 1907 merger. A five-man committee chaired by John Kerr, a Shell Transport non-executive, is overseeing the review.

`Devil in the Detail’

Moving to a single board of directors is the most popular option among investors, Goldman Sachs Group Inc. said in February. While that is an option, Shell hasn’t ruled anything out so far, the chairman said.

“There is no point to speculate what is the most likely outcome, we are studying all options,” he said. “The devil is in the detail. You may say this sounds very good, but then you have to work it through — is it fair to all shareholders?”

Any changes need to be fair to institutional and individual shareholders, wherever they live, and to holders of shares in both parent companies, Van der Veer said. “In every option, you have to work yourself through a lot of details,” he said.

Shell’s U.K. chairman, Ronald Oxburgh, said in June the review is considering some “extreme structures.” The most “extreme” options would include merging the two parent companies, a move with tax and legal implications for Shell.

In July, Shell agreed to pay $150 million to settle SEC and U.K. Financial Services Authority investigations into the reserve cuts. Probes by the U.S. Justice Department, the Dutch securities regulator and the Euronext stock exchange are continuing.

To contact the reporter on this story:
Alex Lawler in Stavanger through the London newsroom
2166 or at [email protected]


To contact the editor responsible for this story:
Tim Coulter at [email protected]

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