The Times: Shell will respond to worries over transparency
By Carl Mortished, International Business Editor
June 17, 2004
SHELL will respond this week to demands from CalPERS, the Californian civil service pension fund, that the oil company end the secrecy surrounding the review of its board structure.
The Anglo-Dutch group has come under criticism for failing to reveal the identities and terms of reference of an internal team appointed after the reserves scandal to consider reforms to the complex governance of Shell and its multi-board structure.
The growing chorus of shareholders requesting more disclosure about the review has provoked an internal argument within Shell over the process, say sources close to the company. Those favouring a legalistic approach to the review want the team to remain in camera, similar to the investigation earlier this year into the misreporting of reserves. They fear that the team will be subjected to undue pressure if the process is made public.
Others within Shell believe the company could head off a confrontation at the annual meeting in London on June 28 by appearing more open to shareholder scrutiny.
CalPERS and Knight Vinke, one of the US fund’s investment advisers, are critical of the complex relationship between the supervisory board of Royal Dutch Petroleum, the board of Shell Transport & Trading and the executive committee of managing directors for the reserves scandal.
In a letter to the Financial Times, Knight Vinke and CalPERS requested that Shell’s review deal specifically with four issues — the role of a chief executive, the need for transparency in management succession, shareholder involvement in board appointments and composition of the boards.