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You can’t be sure of Shell

By Fiona Maharg Bravo

Royal Dutch/Shell's problems stem from the multinational group's lack of accountability to investors. After the recent debacle over a mis-statement of its oil reserves in its accounts, it might have been expected that the group would have started to listen to them. But that's not the case.

The Dutch/British group's new chairman, Jeroen van der Veer, has mounted a defence of the existing double-headed board structure. His argument in general is that Royal Dutch/Shell's problems can be attributed to a few rotten apples, not to its corporate governance or culture. Sure, the group needs to tidy things up a bit around the edges. But there's no way it needs to rethink its structure.

What's more, van der Veer has introduced an element of British versus Dutch into the debate. And as there is real concern in the Netherlands that a reorganization might mean loss of industrial sovereignty, the move might ultimately make meaningful reform harder to achieve.

Weak arguments for inaction

Most of the arguments that the group has made in favour of the status quo are pretty weak. One is that the existing regime has worked well for a century; so why fix what isn't broken? Another is that the reserves debacle was the responsibility of a few guilty people – including Royal/Dutch Shell chairman Sir Philip Watts and the group's head of exploration and production, Walter van der Vijver – and they have now resigned.

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