The Guardian: Calpers demands review at Shell

Jill Treanor

Thursday June 10, 2004

Calpers, America's largest pension fund, with a reputation for instilling change in big companies, yesterday turned its fire on Shell by demanding a high level review of its boardroom structure.

The California public employee's retirement scheme has put the embattled Anglo-Dutch oil group on its annual hit list of companies which need to boost performance.

The "focus list" is compiled after an analysis of the 1,600 or so stocks in which it invests and this year contains three other companies which have been facing wider questions about boardroom structure and share performance. They are Walt Disney, Emerson Electric and Maytag.

The decision to name Shell on the focus list puts additional pressure on the company at a time when it is struggling to restore investor confidence after four downgrades of its reserves and the ousting of chairman Sir Philip Watts and exploration director Walter van de Vijver.

Other companies which might have made it on to Calpers' list managed to avoid being named by pledging to make changes at private meetings. Shell executives failed to satisfy the influential investor at a recent meeting in New York that necessary changes were under way, Calpers said.

"We want them to really do a nuts and bolts review of the group. We want them to establish a board level committee with this in mind, to look at the role of the chief executive and management succession."

Calpers noted that Shell's shares had lagged behind their peers for five years and expressed concern that the board had failed to respond effectively to shareholder demands.

Shell stunned the City after it emerged it had been overstating its oil reserves. The disclosures forced it to delay publication of its annual report.

Shell was not available for comment last night.

http://www.guardian.co.uk/business/story/0,3604,1235329,00.html