Reuters.co.uk: Shell shareholders prepare to make AGM waves
Sun 20 June, 2004 21:03
Posted Monday 21 June 04
LONDON (Reuters) - Royal Dutch/Shell shareholders plan to give the embattled oil giant's directors a rocky ride at its twin annual general meetings on June 28, despite the concessions it made to them last week.
Investors say they want to see clearer reporting lines and a simpler management structure at the world's third largest oil company. Shell sacked three directors this year for their part in a failure to communicate long standing problems with reserves bookings to shareholders.
On Thursday, Shell bowed to the pressure and outlined how it intended to approach this issue in a review that will take until November and could end up with a unified board or even a unified company. It also moved to abolish priority shares which gave directors the sole right to propose future executives.
"It's encouraging that they've abolished the priority shares, but heaven knows why it took so much pressure to get this much transparency on the review, and I can't see why it should take until November," Richard Singleton, director of corporate governmenace at ISIS Asset Management, told Reuters last week.
"We'll be using the AGM to exert a bit of constructive pressure to move things along a bit".
One of the proposals on the Royal Dutch AGM voting form is usually a formality. It asks shareholders to agree "that the managing directors be discharged of responsibility in respect of their management for the year 2003," releasing them from any liability under Dutch law.
According to reports in the Observer, U.S. shareholder activist group Institutional Shareholder Services (ISS) is recommending shareholders vote against this motion in a move to embarrass management.
It said ISS also told investors they would find it harder to pursue legal action against directors, as some shareholders have, if they vote in favour of the discharge.
The Sunday Telegraph quoted one unnamed shareholder as saying he would vote against the proposal. ISS could not be reached for comment.
No such proposal appears on the AGM paper of the group's British arm, Shell Transport & Trading.
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