The Times: Shell may shift to Anglo-US corporate structure
By Carl Mortished, International Business Editor
March 05, 2004
SHELL is considering a shift to an Anglo-American style management structure with divisional heads reporting to a chief executive.
A move to concentrate power at the top of the Anglo-Dutch group is being considered as fears mounted in the City that Shell may be at risk over the misreporting of its oil and gas reserves.
The Anglo-Dutch company has appointed Davis Polk Wardwell, a leading New York law firm, to advise its internal audit committee, which is investigating events surrounding the reserve recategorisation in January. The company yesterday confirmed that this investigation had led to the removal on Wednesday of Shell’s chairman, Sir Philip Watts, and Walter van der Vijver, the head of exploration.
City analysts were concerned that the investigation may have unearthed damaging evidence about the reserve recategorisation. JJ Traynor, an analyst at Deutsche Bank, said: “It was done by the audit committee. They are charged with risk management and I wonder if they found evidence of malpractice.”
Shell would not comment on the contents of the audit committee’s report, which will not be completed for several weeks. It will be made available to the US Securities and Exchange Commission, which has already opened a formal inquiry into the misreporting of reserves.
Shell’s audit committee has six non-executive directors from the two holding companies. They are Sir Peter Burt, the former HSBC director, Luis Giusti and Nina Henderson, representing Shell Transport, Aad Jacobs, Lawrence Ricciardi and Henny de Ruiter, representing Royal Dutch.
Shell sources say no decision has been made to change the corporate structure but “all the options are being considered”.