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If you can’t be sure of Shell …

The lawyers’ independent report into what went wrong at Shell makes for terrible reading. There are some tragi-comic revelations: the oil reserves internal auditor was a part-time individual who visited oil fields on a four-year cycle and, when he voiced a few concerns some years ago, feared for his job and decided not to press the point. This seems like a bizarre way for an internal auditor to behave and says more about the culture at Shell than we ever thought we knew.

As for the finance function, it turns out that, until recently, the business unit FDs had no reporting lines to Judy Boynton, the group CFO. (The lawyers don’t say whether the new reporting lines are solid or dotted – but that’s because, ironically, their report is in plain English, not management-speak.)

At the heart of the crisis lies the long-running dispute between Sir Philip Watts – who, as head of the Exploration & Production unit in the 1990s was responsible for being too aggressive in booking oil reserves – and his successor, Walter van de Vijver – who tried for three years to ‘debook’ the reserves. But ultimately van de Vijver played his role in trying to buy time, hoping eventually that the reserve figures would be justified, and acquiesced in making a press statement that hid the true cause of the problem. Both men have now lost their jobs.

This is what corporate governance is all about. No boxes, no ticks. Just organisational culture. But now, sadly, incredibly, we have to add Shell’s name to the list of companies where ‘accounting irregularities’ – or cashless frauds, as so many of them really are – have been committed in the name of performance targets.

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