The Independent: Investors to press Shell further on board shake-up

By Michael Harrison, Business Editor

23 March 2004

Institutional investors are to hold further talks with Shell to press the case for wholesale reforms to its board structure after a meeting yesterday with directors of the oil giant ended inconclusively.

Both Shell and the Association of British Insurers, which represents shareholders owning 25 per cent of Shell Transport and Trading, the London-listed arm of the Anglo Dutch company, described the talks as "constructive". However, they said the discussions were only part of an ongoing dialogue and that further talks would be necessary before any decisions were taken.

In the aftermath of two reserves downgrades and the sacking of the chairman, Sir Philip Watts, the oil major is being pressed to abandon its unusual dual-board arrangement and adopt a conventional corporate structure.

Lord Oxburgh, the interim non-executive chairman of Shell Transport and Trading who led the company delegation to the ABI yesterday, said: "A whole range of issues was discussed. Nothing was ruled in and nothing was ruled out."

Peter Montagnon, the ABI's head of investment affairs, said he was pleased that Shell was listening to the views of its investors but refused to go into details of what was discussed.

Apart from Lord Oxburgh, the other Shell representatives were Sir Peter Burt, the head of its audit committee, and Jyoti Munsiff, Shell Transport and Trading's company secretary and senior lawyer.

Shell was forced to downgrade its proven reserves for the second time last Thursday after the initial cut of 20 per cent or 3.9 billion barrels in early January. It also postponed publication of its report and accounts, due to appear on Friday, at just one day's notice, and put back the annual shareholders' meeting for two months to await the completion of a further review of its oil and gas reserves.

Shell denied that the hold up had been caused by the refusal of its auditors to sign off the accounts, saying they had not yet been finalised and therefore had not yet been presented to the auditors.

Analysts were puzzled, however, as to how Shell could have finalised its accounts, got them signed off, and then had them printed ready for distribution to one million shareholders, all in the space of 24 hours, if a decision had been taken to proceed as normal.

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