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The Shell CEO who preferred to stay in the shade

But when the United Nations called for an oil boycott of the South African Apartheid regime, Van Wachem unintentionally ended up in a high-rise political debate. The shareholders’ meetings were suddenly visited by angry activists who had purchased a share from the Royal Dutch. Radicals cut the fuel hoses from Shell’s gas stations. But Van Wachem knew nothing about it. In a letter to the World Council of Churches, he pointed out that there were six other major oil companies operating in South Africa. He also hired an American agency to investigate what he could do against those activists.

Printed below is an English translation of an article published today by the Dutch FT, Financieele Dagblad

Shell CEO preferred to stay in the shade

Louis Hoeks: 29 August 2019

Lo van Wachem during the presentation of Shell’s annual figures for 1985. Photo: Rob Bogaerts on behalf of the FD

Amsterdam, spring 2004. At the shareholders’ meeting of Philips, Peter Paul de Vries of the Vereniging van Effectenbezitters (VEB) asks why the bonus of chairman Gerard Kleisterlee has tripled. “Not on the agenda,” grumbles to Commissioner Lo van Wachem. “It is an issue, because I am asking you,” De Vries insists. But Van Wachem is simply silent. It is not the first collision between the two. A few years earlier, Van Wachem had threatened to have the shareholder foreman removed by security.

In the late 1990s, Van Wachem was considered the most influential Dutchman in international business. In addition to being a supervisor of large groups such as Philips, IBM, AkzoNobel, BMW, Bayer and insurance company Zurich, he was Shell’s top boss for seven years. Financial analysts from the United States proclaimed him the best CEO in the oil industry. But in his difficult handling of criticism from society, Van Wachem looked like an old-fashioned regent. He died on Saturday 24 August at the age of 88.

Fuel hoses cut

Van Wachem preferred to operate in the shade. Television appearances and newspaper interviews were an abomination to him. “The center fits a modest role behind the scenes,” he said, somewhat cryptically. But when the United Nations called for an oil boycott of the South African Apartheid regime, Van Wachem unintentionally ended up in a high-rise political debate. The shareholders’ meetings were suddenly visited by angry activists who had purchased a share from the Royal Dutch. Radicals cut the fuel hoses from Shell’s gas stations.

But Van Wachem knew nothing about it. In a letter to the World Council of Churches, he pointed out that there were six other major oil companies operating in South Africa. He also hired an American agency to investigate what he could do against those activists. It also had personal consequences. In 1987 his alma mater, TU Delft, received Van Wachem’s honorary doctorate.

Photographic memory

Lodewijk Christiaan van Wachem was a dedicated member of the Shell family. His father worked in India as an accountant for legal predecessor NV Bataafsche Petroleum Mij. A family vacation in the Netherlands, at the end of April 1940, resulted in a forced longer stay. In 1953, the 22-year-old chemical process engineer joined the oil giant. He would stay there for 49 years. While the company saw production and profit triple in two decades, Van Wachem climbed the ladder, from distant places such as Brunei, Venezuela and Nigeria.

In 1976 he returned to The Hague. He and his wife and three children lived in a villa in Wassenaar. He would no longer lose his global view. “From Singapore, the world looks very different from Rotterdam.” In 1982 Van Wachem Shell started leading the Netherlands. Three years later he succeeded Dirk de Bruyne as the highest boss of the entire group.

The down-to-earth engineer was praised for his crisis resilience and efficiency. Colleagues appreciated his dry humor and – thanks to a photographic memory – impressive file knowledge. Van Wachem had a helicopter view, but was also able to delve deep into the details before he made a decision, Rene Dahan, the second man of arch rival Exxon, observed.

Mandela

But Van Wachem was not only struggling with social criticism. He had trouble with human relationships anyway. Without naming its predecessor by name, the new Shell chief Cor Herkströter denounced bureaucracy, syrupy decision-making and the poor flow in the top of the company in 1993. After his departure as CEO, Van Wachem was President of Shell for ten years. The rest of his time was spent on his supervisory directorships.

In October 1993 he was finally able to close the book South Africa. When President Mandela and his predecessor De Klerk received the Nobel Peace Prize together, the Shell chief and his wife were also invited. Van Wachem was satisfied. “Then I knew I had made the right decision.”

In 1985, Lo van Wachem became chairman of the CMD (committee of group directors) of the Shell group. Without going into details, one can describe the course of the group under his regime as sober, crisis-proof and strategically alert. But Van Wachem had little sense of public contact and the relationship with society, he failed to seriously address the disrupted relationship with Shell, allowed the bureaucracy in the head offices to continue, and paid little or no attention to moving on to the top, in particular that on the Dutch side, for which he was directly responsible as CEO of the Royal Dutch.

It has never become entirely clear why Herkströter felt it was right at that time to initiate a broad and radical cultural revolution, to push the group on the Anglo-Saxon track at a rapid pace and at the same time to carry out a major attack on the bureaucratic apparatus. According to historian Stephen Howarth, author of the anniversary book that Shell Transport & Trading published in 1997, it started with a moment of ‘reflective unease’ about the future, which Herkströter expressed at a meeting in the US in November 1993. Others also report afterwards a vague unrest. ”

There was a lack of discipline, the company was internally focused and the people were complacent. The family culture was shattered. Some people were very comfortable, but did not find any challenge in their work. They were completely encapsulated, “says the director of a major Shell joint venture. “We had always done well. Shell was the largest oil company in the world.

But there was too much bureaucracy, the decision making became too syrupy, “notes one of the former Shell country directors.

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