The Financial Times: Shell directors to press for more resignations
By Carola Hoyos in Paris, Sundeep Tucker in London and Ian Bickerton in Amsterdam
Last Updated: March 13 2004 0:47
Some Royal Dutch/Shell board members are pressing for further resignations among top executives who knew about the wrongly booked reserves well before they were admitted to the public, people close to the board said on Friday.
The pressure to make management changes stems in part from a perceived need to show US regulators that the Anglo-Dutch company is taking the right remedial action.
Shell's shock announcement in January that its oil and gas reserves had been overstated by 20 per cent plunged the company into turmoil, forcing senior executives to resign.
The misreporting put the company in breach of standards required by the Securities and Exchange Commission.
One person close to Shell said on Friday night that matters could come to a head at high-level meetings in the next few days. The two executives viewed as most vulnerable are Jeroen van der Veer, the new chairman, and Judy Boynton, chief financial officer.
Shell's board is understood to be divided along partly national lines, with some British members urging further change in response to regulatory and market pressure and some Dutch "hoping the whole thing will go away", in the words of another person close to the company.
The resignation this month of Sir Philip Watts, Shell's chairman, is said to have been forced by the Dutch, among them Wim Kok, former prime minister of the Netherlands and a Shell director.
Walter van de Vijver, former head of the exploration and production division, also resigned.
Some board members are especially worried about the effect the crisis could have on Shell's prized top credit rating. On Friday Fitch revised its outlook for the company's credit rating to negative from stable. The change reflected the lower reserves, possibility of further management instability and potential shareholder litigation, Fitch said.
Because of the lack of clear successors to the current management, wide-ranging dismissals may be difficult and may take some time.
The crunch comes next week as leading UK shareholders in Shell Transport and Trading are to demand that the British arm of the beleaguered oil giant appoint an outsider as independent non-executive chairman.
Shell chairmen have traditionally been recruited internally but, with the company in crisis, UK investors say the time is right for Shell to employ outside talent.
The subject is expected to be among topics of discussion when UK institutional investors meet Lord Oxburgh, interim chairman of Shell's UK arm, and Sir Peter Burt, the senior non-executive, on March 22 at the Association of British Insurers, a leading investor group.