The Guardian (UK): My head is on the block, admits Shell chief executive: “Jeroen van der Veer, Shell's chief executive, has admitted privately that many of his own managers have deep misgivings about the way the company is being run by him and his team.”: “And he admitted that if "I look at what our middle levels think about the company, I'm very concerned". (ShellNews.net) 17 Dec 04
Dec 17, 2004
Jeroen van der Veer, Shell's chief executive, has admitted privately that many of his own managers have deep misgivings about the way the company is being run by him and his team.
The gloomy message contrasts with more upbeat public statements from senior directors that the company was bouncing back. Shares fell 5.25p yesterday to 428p.
In an internal speech given at Shell headquarters in The Hague to the oil group's top 100 executives but obtained by the media, the Dutchman said many staff believed: "Shell can be led better."
And he admitted that if "I look at what our middle levels think about the company, I'm very concerned".
Too many in the exploration and production division "walk with their heads down" and changing the culture of an organisation was like "pushing a string through a hole", he said.
Mr Van der Veer said he would "only sleep well" when he knew for certain that 100% of the reserves were consistent with US stock market regulations. "Our reserves review is on schedule. We are doing a well-by-well, field-by-field review, and I expect a close out with the publication of our annual report.
"And we must get it right . . . my head, Malcolm's [Brinded, exploration boss] and those of EP [exploration and production] leadership are all on the block," he said.
The chief executive also touched on the question of safety after a string of accidents in the North Sea. He admitted: "It is disappointing that industrial safety - where we should have more control - has not improved."
The damning indictment of the slow pace of change at Shell compares with an upbeat message delivered only last week to the Guardian by the UK arm's chairman, Lord Oxburgh. He argued that Shell was on the mend; citing better staff morale as a reason along with an increased share price and a positive response from the City to its decision to change corporate governance. The Shell Transport & Trading chairman also stressed the strong commitment to safety.
The Anglo-Dutch group was hit by crisis in January when it admitted that more than 20% of its reserves should not have been claimed because they were inconsistent with rules of the US securities and exchange commission.
This prompted an internal review and a string of further downgrades, which led to the exit of Shell's chairman of the managing directors, Sir Philip Watts, plus the exploration head, Walter van de Vijver. Legal action by angry shareholders is still pending.
Mr Van der Veer also believes that good progress has been made this year in rebuilding Shell's reputation. But he admits: "It is simply a long journey over a rocky road and the troops are only slowly regaining their self-confidence and their comradeship."
He also talks about a wasteful culture at Shell, which is changing only slowly. "I see some good initiatives but we still love to talk to one another and to travel the world to do so," he argues.
A source said there was nothing overly negative about the speech. "It was just trying to say that the buck stops with him [Mr Van der Veer] and he is determined to get things right," argued the source.