Daily Mail: Power shift
By Alex Brummer,
23 March 2004
The idea of Shell's senior non-executives trooping into the Association of British Insurers to receive their marching orders from big shareholders might once have seemed unlikely. But Shell is no longer an imperial power upon whom the good and the great might humbly call.
It might have wrapped itself in the image of corporate responsibility after Brent Spar but beneath the glossy facade we now know there is a governance vacuum.
There have been two downgrades of reserves, the dismissal of Sir Phil Watts and Walter van de Vijver and the humiliating disclosure that the board had to postpone releasing the accounts amid concerns about whether the auditors would sign them.
The Shell bosses can no longer dictate the timetable of change at the group. It is the investors who are in the driving seat. The idea that they are going to sit around until 2005 waiting for a unified board and a strong new chairman, who can restore confidence in the group's reporting standards, is pie in the sky.
The temporary chairman Lord Oxburgh and senior non-executive Sir Peter Burt find themselves in much the same kind of position as Sir Christopher Bland when he took over at BT and set about remaking the group from the top down.
In Shell's case there is no need for refinancing. The present high oil price keeps the profits gushing. But no one is going to trust the present management to clean up the mess.
Lord Oxburgh - admirable as he may be - is not by any standards a City heavyweight. Burt might fit the bill to become new chairman, but he is barred now that he has taken on ITV.
So where to look? If Shell needs an energy person then David Varney at mmO2, but formerly of Shell and BG, is the kind of figure who would command City confidence.
Or the group could look at former BP bosses who have a good record of turning around sleeping oil giants - perhaps Lord Simon could tear himself away from the Cabinet Office. What is plain is that Shell has a surprisingly weak board filled with impressive figures but lacking hard-nosed business and City experience.
Reform needs to come from the top, and soon.
http://www.thisislondon.com/news/business/articles/timid76133