Charles O. Holliday
My comments today will focus on the Shell theme developed in the 1930’s: You can be sure of Shell. It is a slogan about trust – and it is even more important today. We must earn the trust of all our stakeholders: customers, investors, employees, and wider society. As a company, we provide fuels, we supply energy, which enables people to have not only clean water and safe food but shelter clothing and comfort. We are in the broader processing industry where safety is the leading factor to build trust and confidence.
We strive to eliminate all injuries – yes, that is a challenging goal but we must work toward it every day.
Last year we had our best-ever personal safety record – the lowest number of people hurt while working for Shell. But I am not at all happy that, after five years of improvement, we saw an increase in process safety incidents. Last year Shell launched 10 process safety fundamentals, the process safety equivalent of our 12 Life-Saving Rules for personal injury, in my over 35 years working in the process industry, this is the single most important step I have seen to avoid serious events.
We cannot talk about safety and not mention Pakistan. It is the most difficult situation, I have ever had to communicate.
On June 25 of last year there was a devastating event where a fuel tanker overturned and spilled fuel. It was operated by a sub-contractor of Shell Pakistan Limited, outside of the operational control of Shell Pakistan Limited. To the best of our knowledge, no one was critically injured at the time of the incident. People from a nearby village later approached the accident site to collect the fuel. Tragically, the fuel ignited. 221 people died and 56 people were significantly injured. We must learn from this devastating event and apply the lessons throughout Shell and share it with other members of our industry. We must learn, otherwise our bond of trust will fail. It will take time to fully implement the deep learnings from this tragedy. But we will not stop until it is completed.
Trust is at stake here. And we will build this trust with all our stakeholders by our daily actions, not just our words. We must build this trust in all our stakeholders by our daily actions not just our words.
Let me share with you the breath of our daily actions. Each one of these interactions is an opportunity to build it up or take it down. We serve over 30 million retail customers each day. That is more than 10 billion transactions a year. We refuel an airplane at one of the 850 airports we serve every 14 seconds. 7 of the 10 largest car companies put Shell lubricants into their new cars. We supply enough bitumen, a road paving material, to pave a road from here to Paris every day.
With so much at stake we expect the highest standards of ethical behavior form each of our over 84,000 employees in over 70 countries. Our business principles were first published in 1976 and you can read them today in 16 languages on our web site. We have 3 core values: honesty, integrity and respect for people. Honesty: always tell the truth. Integrity: Always do the right thing. Respect for people: treat others as you would like to be treated, or even better how you want your mother or father son or daughter to be treated.
I have served the Shell board for 8 years. I have looked for our values every time I interact with Shell people. I have never been associated with a company that had higher ethical standards than Shell.
But that does not mean we are perfect. We have a strong policy to protect anyone making an allegation in good faith.
In 2017, our internal investigations confirmed 261 Code of Conduct violations. As a result, we dismissed or terminated the contracts of 73 employees and contract staff. They all left Shell. We must be tough when people break our Code of Conduct because we all suffer when trust is broken.
With this foundation, let me now shift to our 3 strategic ambitions:
First, we aspire to become a world-class investment for our shareholders. Without this we cannot gain the resources we need to move forward.
Second, we plan to thrive through this period of huge change in the energy system, this period we call the energy transition. I was the speaker at an engineering college graduation 2 weeks ago. My subject was the energy transition. I reminded the students that they have a about a half-century to make the energy transition to avoid the most devastating impacts on our planet. In other words, in their working career we will make the changes needed or come up short.
Third, we aspire to be valued for making a real contribution to peoples’ lives, sustaining a strong license to operate. The videos we started this meeting with are just a few of the examples of what Shell is doing it this arena. Ben will share in more detail the steps your company is and will take to deliver on all three of these ambitions.
Your board of directors strives to do our part in making you sure of Shell. Allow me to describe, some examples of how we perform the job you elected us to do. We strive to be a highly engaged board, asking the questions that get to the core issues. We operate from a concept of: go, see and listen.
Recognising the positives of a company is important but trust only endures and grows if we also face the tough questions and visit areas facing complex problems. Shell faces some issues where societal trust has been shaken. We must restore that trust.
Our Corporate Social Responsibility committee has visited Groningen to get a first-hand view of the issues. In addition, they have visited Nigeria 3 times in the last 7 years, the last visit included Hans, Catherine and Nigel, earlier this year.
Gerard, chair of our Remuneration committee, actively meets with shareholders every year and fully considers their suggestions with the Remuneration committee. Our Audit committee including Euleen, Roberto and Gerrit were in London yesterday on the Shell trading floor, talking with employees and reviewing how risk is managed.
We formed a special committee last year with Linda as Chair to focus on the Nigeria litigation issue.
This past March, the entire board met with a cross sectional groups of employees asking them about dilemmas they face in their Shell roles, we listened hard. We heard everything from their views on the Shell people survey to having to manage a tight budget in a tough situation. We learned a lot!
Now let me turn to the people that lead your company every day, Ben and his Executive Committee. The Executive committee attend our board meetings. We want the key company leaders in the room to fully understand each subject.
In addition to Ben and Jessica, this includes Andy, John, Harry, Maarten, Donny and Ronan. In my role as Board Chair I spend a lot of unstructured time with each of these leaders to really understand them. My first observation is the name Executive Committee does not properly describe a true team of Senior leaders who pull together and support each other. Under Bens leadership this committee has truly become a team.
The question I ask myself when evaluating a leader is would I like to report to him or her, in other words: what if they were my manager or boss? I can say without hesitation I would be delighted to report to any of these leaders and would look forward to coming to work every day.
This is a trusted team making Shell fit for the future. Before I turn to floor to Ben, let me describe the Ben my board colleagues and I see. Ben is not only trusted, but trusting. He is a good listener. He knows that diverse points of view improve the quality of decisions. He does not only give you the answer but also shares the background to it, along with his logic and reasoning. You will hear this today in answering your questions.
Ben has made some critical decisions in his over 4 years of leading your company including pulling back from Alaska, selling our oil sands operations, and buying the BG group. You can be sure of Shell to make the decisions you can trust.
Ben, over to you.