Financial Times: R.Dutch/Shell lays course for governance review (ShellNews.net)

By Deborah Hargreaves and Sundeep Tucker

Published: August 2 2004 04:00 | Last updated: August 2 2004 04:00

Royal Dutch/Shell is expected to reveal some details about the direction of its far-reaching governance review when it announces its strategy plan at the end of September.

Jeroen van der Veer, group chairman, said: "I do not know how far we will have progressed with our studies on governance in September, but it is reasonable to say what we can say at that stage."

He said at the minimum, the Anglo-Dutch oil company could confirm the timetable for the governance announcement, but that may not be good enough.

Investors have been pressing Shell to reveal details of its governance review before the announcement in November.

Mr van der Veer also indicated that shareholders were largely in agreement about the company's need to unify its complex board structure, but it was a question of how to do it. He said that more "drastic options" were still under consideration.

Eric Knight, of US-based Knight Vinke Asset Management, an activist investor in Shell, said the company's recent acceptance that it needed to unify its boards was "encouraging" and that investors wanted to be consulted before any decisions on governance were taken.

He added: "It would not be unreasonable to expect that shareholders be told in September what options are being considered or, at the very least, what options have been discarded."

Shell instituted a review of its governance structures following the debacle in January over its downgrade of proved oil reserves by 20 per cent. The crisis led to the departure of three executives, including Sir Philip Watts, Mr van der Veer's predecessor.

Mr van der Veer said the September strategy announcement would show how the group planned to change its portfolio of upstream and downstream developments.