Sir Philip Watts, chairman of Shell, will this week face further attacks from major institutional investors who still believe he should resign.
The growing opposition signals his failure after last week's full-year results to quell shareholder anger. Shareholders have not started openly lobbying the board for Sir Philip's removal. But one fund manager due to meet the board this week admitted to The Independent on Sunday that if directors pressed him on the issue, he would not support the chairman.
Sir Philip, who intends to meet shareholders controlling 50 per cent of the company, will begin his City charm offensive this week. Analysts had described last week's results as the "single most important event for the company's share price since the 1998 Asia crisis". Sir Philip apologised for being absent last month from a company conference call explaining why a fifth of Shell's "proven" reserves were being reclassified as "probable". He also promised a review of the Anglo-Dutch oil giant's unwieldy dual management structure.
But most shareholders contacted by the IoS were unimpressed. Another fund manager, who told the IoS before the results he was prepared to work with Sir Philip to push through changes, now thinks this may no longer be possible. He will also meet Sir Philip this week. "A lot will depend on the meeting," he added, although he stopped short of calling for the chairman's resignation.
Other members of Shell's board have also come in for criticism. Non-executive directors led by Lord Oxburgh met shareholders on Monday to listen to their concerns. One shareholder said he came away feeling that the whole board was being "a bit complacent". "They seemed to think it was a local UK issue which could be managed. The feedback I get is always that everything is always OK," he said. However, another shareholder who also attended meetings with Lord Oxburgh disagreed that the board appeared complacent.
William Claxton-Smith, of Insight Investment Management, argued that Sir Philip needed more time. "We are still concerned. But this is not something where you would expect to see overnight developments. We feel this is an issue which is being appropriately addressed."
Shareholders also believe the unwieldy management structure concentrates too much power in one person. As well as being chairman of the Committee of Managing Directors, which overseas the Shell companies - Royal Dutch and Shell Transport & Trading - Sir Philip is also managing director of Shell Transport. Where a chief executive is preparing to stand down, a chairman will usually oversee the appointment of a replacement. There is no similar figure at Shell who could continue reforms initiated by Sir Philip when he steps down next June.
He has had a difficult relationship with the City and has been criticised for some of his acquisitions. Before becoming chairman, he was head of the exploration and production division responsible for booking the reserves that were recently reclassified.
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