VP Planning Royal Dutch Shell plc by Hein van den Wildenberg


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Seminar: Culture eats Strategy
Date: 2.Dec. 2010

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VP Planning Royal Dutch Shell plc by Hein van den Wildenberg

  1. 1. CULTURE EATS STRATEGY2 December 2010Maastricht UniversityHein van den WildenbergVP Planning Royal Dutch Shell plc 1 December 2010 1 December 2010 1
  2. 2. AGENDA Shell, een korte introductie Voorbeelden van het belang van cultuur/gedrag in Shell De rol van Finance Stellingen 1 December 2010 2
  3. 3. DISCLAIMER STATEMENTThe companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and“Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, thewords “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no usefulpurpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in thispresentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or theright to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or“associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointlycontrolled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/orindirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company,after exclusion of all third-party interest.This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. Allstatements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements offuture expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties thatcould cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statementsinclude, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’sexpectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrasessuch as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’,‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal DutchShell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including(without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell’s products; (c) currency fluctuations; (d) drillingand production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associatedwith the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk ofdoing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments includingregulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, includingthe risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects anddelays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation areexpressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance onforward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31,2009 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statementspeaks only as of the date of this presentation, 2.12.2010. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly updateor revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differmaterially from those stated, implied or inferred from the forward-looking statements contained in this presentation.The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only provedreserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existingeconomic and operating conditions. We may have used certain terms in this presentation that SECs guidelines strictly prohibit us from including in filingswith the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.You can also obtain these forms from the SEC by calling 1-800-SEC-0330. 1 December 2010 3
  4. 4. SHELL IN GETALLENFINANCIAL METRICS EMPLOYEES REVENUE $ 278 BILLION INCOME $ 12.7 BILLION AVERAGE NUMBERS 2009 Rounded to the nearest thousand Upstream 23,000 Downstream 62,000 DIVIDENDS DECLARED PER SHARE $ 1.68 EARNINGS PER SHARE $ 2.04 Corporate* 16,000 Total 101,000 Source: 2009 Annual Report and Form 20-FGLOBAL RANKING BY REVENUE INDUSTRY MARKET CAPITALISATION Rank 2009 revenues ($ million) 2009 profits ($ million) Wal-Mart Stores 1 408,214 14,335 Shell 2 285,129 12,518 ExxonMobil 3 284,650 19,280 BP 4 246,138 16,578 Toyota 5 204,106 2,256 Japan Post Holdings 6 202,196 4,849 Sinopec 7 187,518 5,756 State Grid 8 184,496 -343 AXA 9 175,257 5,012 China National Petroleum 10 165,496 10,272 Source: Fortune Global 500, 2010 1 December 2010 4
  5. 5. WERELDWIJDE SPREIDING MEDEWERKERS IN 2009(IN ‘000) EMPLOYEES BY COUNTRY (AVERAGE NUMBERS), source: 20-F 2009 Argentina 3 Australia 3 Brazil 2 Canada 6 China/Hong Kong 4 France 1 Germany 5 India 2 Malaysia 7 Morocco 1 The Netherlands 9 Nigeria 2 Norway 1 Philippines 3 Poland 2 Qatar 1 Singapore 3 South Africa 2 Thailand 1 UK 8 USA 22 Draft and of World Rest subject to review 13 1 December 2010 5 5
  6. 6. 1 December 2010 6
  7. 7. OUR STRATEGY“ we want to be the most competitive and innovative energy company in the world” NEXT GENERATION PROJECT OPTIONS • Upstream growth potential to ~2020 2012-13 • 8 bln boe resources; 35 new projects • Financial growth in focus PRODUCTION GROWTH • +11% Upstream growth 2009-12 • Enhanced Downstream portfolio • Cashflow growth:~50-80% 2009-12 2010-11 PERFORMANCE FOCUS• Improved operating performance• $1 billion 2010 cost reduction• Downstream restructuring SHARPER DELIVERY – PROFITABLE GROWTH – DIFFERENTIATING TECHNOLOGY COMMERCIALEXTERNAL FOCUS DELIVERY SPEED SIMPLICITY MINDSET Draft and subject to review 1 December 2010 7
  8. 8. THE ENERGY CHALLENGE RISING DEMAND SECURITY OF SUPPLY ENVIRONMENT & SOCIETY Population growth End of ‘easy oil’ Hydrocarbons remain dominant Economic growth Resource nationalism CO2 consequences More affluent society More unconventionals9 billion people… 2 billion cars….. 70% of people in cities Draft and subject to review 1 December 2010 8
  9. 9. DEMAND GROWTH AND SUPPLY TRANSITION RISING GLOBAL ENERGY DEMAND CHANGING ENERGY MIX 100 = global primary energy demand 2000 Million barrels oil equivalent per day 300 400 high 300 low 200 high low 200 100 100 0 0 2000 2025* 2050* 2000 2025* OIL NUCLEAR GAS LARGE SCALE HYDRO COAL ALTERNATIVE ENERGY * Shell estimates Draft and subject to review 1 December 2010 9
  10. 10. ALGEMENE BELEIDSUITGANGSPUNTEN VAN SHELL Gemeenschappelijke kernwaarden van oprechtheid, integriteit en respect voor mensen Bijdragen aan duurzame ontwikkeling Erkennen verantwoordelijkheid jegens aandeelhouders, klanten, medewerkers, met degenen met wie wij zaken doen en jegens de samenleving “…reduce the environmental “Long-term profitability is impact of our operations, products essential…” and services…” “…be good neighbours… “…balancing short and long manage the social impacts of our term interests…” activities… enhance benefits to local communities…” “…integrating economic, “…regular dialogue and environmental and social engagement with our considerations into business stakeholders is essential…” decision-making…” 1 December 2010 10
  11. 11. CODE OF CONDUCT= GEDRAGSCODE Om te helpen kernwaarden en beleidsuitgangs- punten na te leven 1 December 2010 11
  12. 12. DIVERSITY & INCLUSION Diversity: all the ways we differ (age, gender, ethnicity, thought styles, religion, sexual orientation, education, ...) Inclusion: creating a working culture where differences are valued Why? Attract and retain the best Increase productivity Stronger customer/market focus Various levers to achieve success Measures of success 1 December 2010 12
  13. 13. SAFETY CULTURE Goal Zero, no harm to people, no significant incidents Supported by 3 behaviours: Comply, Intervene, Respect Safety: Personal safety 12 Life Saving Rules Process safety suite of tools“I believe that an organization with all the right systems and tools in place tomanage and reduce risks to people and processes will fall short if it does not also have a culture where safety is seen and felt in every aspect of the organization. The systems, processes and culture all must work together.” Marvin Odum, president Shell Oil Company, November 9 National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling 1 December 2010 13
  14. 14. SHELL PEOPLE SURVEY Anonieme enquete, jaarlijks uitgevoerd door derde partij Hoe staat het met de algehele betrokkenheid van de medewerkers staat – wat gaat goed, waar is verbetering nodig Vragen in de trant van: wat vindt een medewerker van de algehele koers van Shell, de kwaliteit van haar leiding en of naar Shell’s waarden en Algemene Beleidsuitgangspunten wordt gehandeld. Ook vragen over: gerichtheid op klanten en externe stakeholders, de besluitvorming, vereenvoudiging, communicatie en overleg. Uitkomsten zijn beschikbaar tot op verschillende niveaus in organisatie en worden actief gebruikt bij formuleren verbeterplannen etc. 1 December 2010 14
  15. 15. SHELL CONTROL FRAMEWORK Source: Form 20F 2009 1 December 2010 15
  16. 16. ROL VAN FINANCE De balans vinden ... tussen controls en vertrouwen Business Performance management 1 December 2010 16
  17. 17. STELLING 1• Cultuur/Gedrag krijgt (te) weinig aandacht in opleidingen als RC/EMFC 1 December 2010 17
  18. 18. STELLING 2• Een goede strategie, die slecht gedragen wordt door de organisatie is niet goed... Maar een slechte strategie, die volledig door de organisatie wordt omarmd, is niet beter... 1 December 2010 18
  19. 19. 19 1 December 2010 19