Royal Dutch/Shell Group finally responds to the market demand for a unified board structure. July 20, 2005 marked a major milestone in the history of Royal Dutch/Shell, the world’s third largest oil company. Bowing to the growing market pressure, the Anglo-Dutch Oil Group finally abandoned its dual board structure, which was largely blamed for the last year’s oil reserves crisis that eroded the Group’s decades of impeccable credibility. This involved merger of the Group’s two parent companies, the Hague-based Royal Dutch Petroleum Co and London-based Shell Transport & Trading Co into the Royal Dutch Shell PLC. The new company kicked off trading as a single entity from this date on London, Amsterdam and New York exchanges. Earlier, industry analysts had said that the dual structure was creating opacity in the company’s operations and was behind the slow decision-making process, which meant that it lagged behind its rivals. In the new set up, Shell is now incorporated in London, UK while its headquarters and a single management and supervisory board are based in Hague, The Netherlands.

The Group has been struggling after last year’s reserves scandal to win back investors’ trust. It managed to partially convince shareholders about the Group’s seriousness about damage control by ousting three of its top-notch executives including the then chairman, Sir Philip Watts. This was followed by an announcement of a share buyback program and a dividend pay out of about £ 5 bn. However, the reserves issue has remained a ‘millstone’ round Shell’s neck. And it needs to find more oil and look for potential targets in order to win back the support of investors.

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