Financial Times: Shell does not need a Messier
By Paul Betts
Mar 23, 2004
Royal Dutch/Shell's crisis is not only smaller than scandals at Enron, WorldCom, Vivendi Universal and Parmalat: it is opposite in type. There is therefore a danger of drawing contradictory, and potentially wrong, conclusions.
Whereas many scandals resulted from a rampant chief executive exercising unrestrained power, the Anglo-Dutch oil giant's problems stem from too "collegiate" a culture. Shell has a Dutch supervisory board, a Dutch management board, a British plc board and a committee of managing directors, creating confusion about who is in charge.
UK institutions, some of which met Shell directors yesterday, are right to seek a simpler, unified structure. There may also be a case for an independent, non-executive chairman. Those who clamour for "new blood" should think, though, about what they mean.
The last thing Shell needs is a Jean-Marie Messier, for example. It needs to be led by a clear-sighted, communicative oil executive. After all Lord Browne, who oversaw BP's dramatic recovery in the 1990s, was a lifelong BP man.
Whoever ends up in charge must focus squarely on Shell's central problem: failure to replace reserves. Its decentralised structure encouraged executives to demand the wrong kind of investment, while over-booking of reserves went unnoticed. Any new structure must put that right.