UK - Pension funds have put the management structure at oil giant Shell under scrutiny after an over-estimation of its oil and natural gas reserves.
The move follows the group’s announcement that 3.9bn barrels of oil and gas – 20% of its reserves – would be reclassified as “non-proved”.
The announcement led to a drop in Shell’s share prices and sparked industry questions about the company’s management structure and the future of chairman and executive director Sir Philip Watts.
Sir Philip’s twin roles contravene corporate governance best practice set out in the Higgs Review, which states that chairmen should be non-executive.
A spokesman for the National Association of Pension Funds said the situation was being closely monitored ahead of Shell’s AGM in April and release of full year results on February 5.
Rating agency Standard & Poor’s is considering cutting Shell’s triple-A rating as a result of the over-estimation.
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