By Adam Lusher on May 13, 2021
Growing up in Nashville, Tennessee, the country music capital of the USA, Charles “Chad” Holliday Junior had plans.
He would learn guitar from the Grand Ole Opry star who lived across the street, and eventually take over running the family industrial equipment business from his father Charles Holliday Senior.
But when Chad was nearing the end of an industrial engineering degree at the University of Tennessee, his father called.
“Son, I hope your grades are good,” said Holliday Senior, “Because I just sold the business.”
So Holliday Junior’s life headed in another direction. It took him to being chosen for the top job at global chemicals company DuPont before he was 50, to the United Nations, and to serving as Chair of the Board of Royal Dutch Shell (RDS) for the past six years.
Subject to shareholders’ approval, Chad will hand over to his successor Sir Andrew Mackenzie at Shell’s Annual General Meeting (AGM) on May 18.
Chad has helped guide Shell through some pivotal years as it laid the foundations for success in the energy transition to a low-carbon future.
He became Chair in 2015, the year 195 nations signed the Paris Agreement on how to tackle climate change.
He is standing down as planned after seeing through the launch of Powering Progress, Shell’s strategy for accelerating its progress through the energy transition.
At the heart of Powering Progress is a target to become a net-zero emissions energy business by 2050, in step with society’s progress towards the goal of the Paris Agreement.
The strategy is led by Shell’s purpose: to power progress together by providing more and cleaner energy solutions.
At the 2021 Annual General Meeting, Shell will become the first energy company to hold an advisory shareholder vote on its energy transition strategy.
“We must continue to engage in an adult conversation with our owners and society about climate change,” says Chad. “This is a key moment for Shell, one that will set us on the path to a successful future.
“If we don’t seize the opportunities of the energy transition, others will.”
He may be a veteran businessman, but his enthusiasm remains as strong as when he began, back in his Tennessee childhood.
“I was always pretty entrepreneurial,” he says in his Southern accent. “I guess it kind of stuck with me.”
He started his first business as an 11-year-old, mowing his neighbours’ lawns.
The Grand Ole Opry star was “Whisperin’ Bill” Anderson, who was later inducted into the Country Music Hall of Fame. He agreed to pay Chad for his lawn mowing by giving him guitar lessons.
At his mother Ann’s family farm, Chad learned to drive a tractor long before he could legally drive a car, and got an early demonstration of the wrong way to do safety.
“When my uncle broke his hand, he put me in the tractor to shift the gears for him,” he says. “I was eight. We figured my mother didn’t need to know.”
He joined DuPont as an engineer in 1970. One night in the early 1970s, while supervising a crew of machine operators at a manufacturing plant, Chad saw the challenges that others face.
“My fellow manager was a good guy, really popular, an African-American.
“But someone stuck a racist death threat in his locker saying, ‘We will shoot you when you walk out to your car’.
“I was shocked. I tried to reassure him that no one would ever go through with such a threat.
“When he asked if I would walk to his car with him, I said yes.
“Believe me, it felt like a very long walk to his car that night.
“When I see the reports about the Black Lives Matter movement, I remember that night. It gave me a small sense of what he had to live with.”
The impact of George Floyd’s death provoked some serious soul-searching among Shell leaders.
“Shell responded to the murder of George Floyd by taking a thorough, self-critical look at how we can better help all our staff feel included,” says Chad. “ It has led to initiatives like the global Diversity and Inclusion (D&I) Council for Race, sponsored by our Chief Executive Officer Ben van Beurden.
“We’ve made progress too in other areas. I’m proud that at the Shell AGM, shareholders will get the chance to appoint a Board which for the first time in our history will consist equally of men and women.
"The business case for diversity is that better understanding of a wider range of people means better decision-making.
“But there is also the duty to do the right thing.”
Chad is known at Shell for his personal, direct leadership style and human approach. He began to develop this way of working in those early years at DuPont by observing and listening.
“The camaraderie, seeing how they supported each other. That shaped me tremendously.
“To lead is to serve. You should care about people, listen to them and give them what they need to succeed. There is no limit to what you can achieve if you do not care who gets the credit.”
A sustainable future
In October 1997, at the age of 49, Chad was named the next CEO of the company. He was DuPont's third-youngest senior executive at the time.
Whisperin’ Bill was pleased to hear what became of the boy who cut his grass: “The local paper asked for his reaction. He remembered who I was.”
During Chad’s time as CEO, DuPont received the National Medal of Technology, the USA’s highest honour for technological innovation, for devising alternatives to chlorofluorocarbons (CFCs) that were causing a hole in the Earth’s ozone layer.
At the same time, Chad was becoming increasingly concerned about the dangers of climate change. He put DuPont on a path to reduce its greenhouse gas emissions, and his passion for sustainable development steadily grew.
He is convinced businesses can lift people out of poverty through responsible economic growth that avoids destroying the environment and the climate:
"Sustainable development is about social justice, eradicating poverty. But it also demands justice for future generations: we can’t leave a wrecked planet to our children. And because it is about the whole planet, it requires extensive international co-operation.”
By 2012, while Chair of Bank of America, he led the executive committee of the United Nations Sustainable Energy for All initiative, which works to promote progress towards the UN Sustainable Development Goal of universal, affordable, and reliable energy.
He was also the Chair of Shell’s Corporate and Social Responsibility Committee – the forerunner of today’s Safety, Environment and Sustainability Committee – having joined the RDS Board in 2010, a year after leaving DuPont.
More and more people were demanding action on climate change. Environmental, social and governance (ESG) investors were becoming more influential. The need to adapt to the demands of the emerging energy transition became more urgent.
In 2017, with Chad now Chair of the RDS Board, Shell announced its ambition to significantly reduce the carbon intensity of the energy products it sells, or its Net Carbon Footprint (NCF), by 2050.
It was the first time an international oil and gas company had included in its NCF figure the carbon emissions produced by its customers’ use of its fuel and other energy products, even though it does not control them and they account for around 90% of Shell’s total.
In April 2020, Shell announced it would seek to become a net-zero emissions energy business by 2050, in step with society, so that it would stop adding to the total amount of greenhouse gases in the atmosphere.
By the time of the announcement, the world was grappling with the growing health and economic impact of the COVID-19 pandemic. Energy demand fell sharply. To preserve cash, Shell reset its dividend for the first time in 75 years.
“This was like no recession we had ever seen before,” says Chad, “And it was happening because of a pandemic that was inflicting enormous suffering and would claim the lives of 20 of our Shell colleagues before the year was out.
“When we rebased the dividend, there were no vaccines available, no way of knowing how bad things would get or when they would end.
“We knew how important the dividend was to our shareholders, but ultimately we had to be responsible and ensure Shell could weather this unprecedented storm.
“I am very pleased that our first-quarter results in 2021 have signalled a return to something like pre-pandemic form. We have been able to make progressive dividend increases and drive net debt down towards $65 billion, the point at which we can further increase shareholder distributions. That shows Shell’s strength and resilience.”
Shell announced its Powering Progress strategy in February 2021, setting out how getting to net-zero emissions by 2050 will help it succeed as a business.
“There are incredible opportunities,” says Chad. “The Global Commission on Economy and Climate has estimated that bold action on climate could mean $26 trillion in economic benefits for the world by 2030, in terms of new jobs, competitiveness and market opportunities.
“We are not going to settle for the easy get-outs. We could immediately sell all our oil and gas assets and say, ‘We got out of fossil fuels.’
“But that would be farcical. Those oil and gas assets would still be operated, just not by Shell.
“That’s not us. We are going to do smart things that make a real difference.
“We will gradually reduce our traditional oil business. We will find ways to produce liquefied natural gas (LNG) with fewer and fewer methane leaks.
“Right now, the world – as it actually is – still needs oil and gas. But we can use our oil and gas assets to provide the financial muscle to fund shareholder returns, to invest in low-carbon businesses, and to support solutions to the challenge of climate change.”
The key to Shell’s business success, he says, will be its customers.
“We serve 30 million people at our service stations every day. We have more than a million business customers.
“We can figure out what people want and supply it. We are already forming smart strategic alliances with companies like Microsoft. We plan to work with our customers to help develop new markets for low-carbon energy.
“And we must strive to do everything safely. In 2020, for the first year in our history, there were zero fatal accidents in Shell-operated facilities. We must aim to make that the norm.
“It will never be easy, but Shell people thrive on challenges. Look at how they rose to the challenge of COVID-19. Faced with the threat of a deadly virus, they helped power the hospitals, fuel the ambulances and keep the lights on in their neighbours’ homes.
“That’s the kind of quality you find in Shell people. They believe in this strategy, and as one of them said to me just the other day, ‘We are fired up like never before’.”
As Chad prepares to leave Shell, he admits he will miss the people – “the heart of a great company”. You wonder whether he will completely kick his habit of finding any excuse to look around a Shell service station “because I like to see what they are doing”.
But he enthuses about his three grandchildren, about continuing some projects, and starting others: “I will probably choose to work with a charity involved in sustainability or the environment.”
He has lived by his own advice: “enjoy your work.” Because although Whisperin’ Bill taught him as well as anyone could, Chad’s calling was business, not music.
“How good was my guitar playing?” he says. “Put it this way, by the time I was a teenager, I was involved in a band. As the manager.”