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PLC Law Department: General Counsel File – Beat Hess, Shell

Part of a PLC Law Department series profiling general counsel in the world's leading companies.
Brief career to date: Held various positions in private practice, government and courts. From 1977, worked in various legal roles for Brown Boveri of Switzerland, including as head of the Brown Boveri legal department where he, together with his legal team, handled the merger between ASEA of Sweden and Brown Boveri. Since that merger in 1988, held the role of senior vice president, general counsel and secretary to the board of ABB until 2003 when assumed the role of group legal director for the Royal Dutch/Shell Group of Companies.
Location of company headquarters: The Hague, The Netherlands.
Primary industry sector: Oil and Gas.
Number of employees worldwide: Over 112,000 within the Shell Group.
Turnover of the company in the last financial year: Net income of US $18,536 million (approximately UK£10.498 million).
Subsidiaries: Approximately 1,947 active subsidiaries
How many lawyers are there in the company worldwide? Approximately 650 (excluding tax lawyers).
In which locations is the law department based? Principally in The Hague, London and Houston. Additionally, however, there are numerous in-house lawyers employed by various Shell companies around the world in over 50 countries.
How is the legal function structured? See previous answer. Additionally, the legal function is multi-structured along business function lines, headquarter function lines, and regional lines.
Who has overall responsibility within the company for the business ethics and corporate governance functions? A combination of me, Jyoti Munsiff (our chief ethics & compliance officer) and Michiel Brandjes (the Royal Dutch Shell plc corporate secretary). They both report to me, but also have direct access to the Chief Executive and Chairman.
Which areas of legal risk do you predominantly encounter in your sector? US litigation risk; regulatory compliance legal risks; health, safety & environmental legal risks; product liability risks and so on.
Which areas of law does the legal function provide advice on, and which does it tend to outsource and why? Our in-house lawyers provide advice in all areas of the law. External lawyers are used on an exceptional basis, either to handle litigation or where a particular expertise or resource is needed which cannot be accessed in-house.
Which two law firms (anywhere in the world) that you have instructed over the last few years have most impressed you and why? Kirkland & Ellis (David Bernick) and Debevoise Plimpton (Ralph Ferrara, Ann Ashton, Jon Tuttle, Kolby Smith).
What type of actions would be most likely to induce you to dismiss an external law firm? Poor quality of work and refusal to work within agreed standards or guidelines.
What do you consider to be the three most successful improvements you have introduced to your department over the last few years?
1) Globalisation of the legal function by establishing a “One Team” model where all lawyers providing in-house legal services to Shell companies feel and are part of a global functional legal team;
2) Functional reporting world-wide (i.e., all Shell lawyers functionally report, directly or indirectly, to me as legal director); and
3) Movement toward a single global legal functional budget.
What have been the three most challenging issues that your law department has faced over the last two years?
1) Litigation and regulatory investigations resulting from hydrocarbon reserves recategorisation issues;

2) Unification of our former parent companies into one parent company (Royal Dutch Shell plc); and
3) Functional globalisation and unification of the various Shell legal departments world-wide.
What are the three most challenging issues that your law department is likely to face over the next two to three years?
1) Apparent increasing trend of US courts and regulatory authorities extending their jurisdiction extraterritorially;

2) Continued management of “big ticket” legal risks, and
3) Successful legal management succession planning.
How would you describe your typical day? I generally get in around 07:30 or 08:00. I drive into the office. My first priority is to vet my email and voicemail for urgent messages. My closing time varies considerably depending on the issues of the day. On a “normal” day I get home around 19:30.
Which piece of technology could you not operate without ? The telephone, to talk to my wife and children.
If not a lawyer what would you be? A painter or a medical doctor.
What is the one piece of advice you would pass on to any prospective general counsel? Don’t say “Yes” if you would prefer to say “No”.

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