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Eerie echo for new Shell boss

London Evening Standard: Eerie echo for new Shell boss

“Whether van der Veer turns out to be the leader Shell needs is not yet clear.”: “another faceless unknown emerged from the depths of a huge oil company to explain why the business was on its knees, why the board had decided to fire the chairman and what he, as the new man in charge, planned to do to put things right.”

Anthony Hilton,

24 September 2004

WATCHING new Shell boss Jeroen van der Veer twist in the wind in front of sceptical analysts and an occasionally hostile Press this week, as he outlined his plan to restore the fortunes of this huge oil company, was eerily reminiscent of a scene acted out in similar circumstances just a few hundred yards away, but in June 1992.

On that earlier, celebrated occasion, another faceless unknown emerged from the depths of a huge oil company to explain why the business was on its knees, why the board had decided to fire the chairman and what he, as the new man in charge, planned to do to put things right.

The man was David Simon – he who as Lord Simon is now a Government minister – the company was BP and the sacked chairman and chief executive was Bob Horton, who went on to leave his indelible mark on Railtrack.

It is easy to forget now as the BP colossus towers above the oil world, that, at that low point, having overpaid massively for acquisitions in the 1980s, BP was arguably in far worse financial shape than Shell is today. The writing on its wall was even more uncompromising than the messages being delivered to Shell. But Simon and his successor John – now Lord – Browne, transformed the company into one of the most respected and envied in the world.

With hindsight it is easy to see how it was done but the point is that, at the fateful first meeting with the investment community, almost no one believed he could do it. Just as they don’t think van der Veer can pull off a transformation at Shell.

No one prepares people like Simon or van der Veer for the PR and ambassadorial role they have as chairman. No one rises to the top in companies like theirs because of their communications skills, yet once they are in the top job, as we have seen in the comments on van der Veer, it is on these, that they are initially judged. And it is nonsense.

No big and traditionally successful company will change unless there is a crisis because it is only when the business is seriously threatened that an agenda for reform becomes an issue around which the permanently warring internal factions will unite.

Whether van der Veer turns out to be the leader Shell needs is not yet clear. But he deserves rather more of the benefit of the doubt than he has been given by the markets this week.

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