THE WALL STREET JOURNAL: Royal Dutch/Shell Begins to See Advantages of Unified Structure
Edited by Hugo Dixon
August 13, 2004
Shareholder pressure is getting somewhere with Royal Dutch/Shell. Only three months ago the Anglo-Dutch oil titan seemed impervious to calls to reform its cumbersome dual-headed structure. Now it has virtually accepted the argument that it must, at minimum, create a single unified board to run the group. It is also looking seriously at the more radical option of merging the two top companies into a single group. (See related article.)
What’s the advantage in going the whole hog? Well, there are really two. First, simplicity. Second, and most important, greater accountability. One of the reasons Royal Dutch/Shell has been so successful at resisting shareholder pressure for so long is that investors have had to lobby two separate groups in different countries. They have needed two keys to unlock the boardroom door. With a single company, shareholders would only have to concentrate on one pressure point. Royal Dutch/Shell’s parents are Royal Dutch Petroleum Co., of The Hague, and London-based Shell Transport & Trading Co.