The decision to reform and the associated changes to its statues was taken by the board of directors and is to be considered at an extraordinary meeting of shareholders on 10th December.
The company plans to change from a dual share structure (type A – Royal Dutch Shell and B – Shell Transport and Trading with identical rights) to a single type of share. After the moves to simplify structures, shareholders will continue to hold the same legal, ownership, voting and capital distribution rights in Shell as previously. Shares will continue to be listed in Amsterdam, London and New York.
Shell’s corporate governance structure will remain unchanged.
The process of unification will improve opportunities for a return on investment for shareholders. In July, the company announced the start of a share buyback totalling $2 billion. And in September, it pledged to return to shareholders a further $7 billion after completing the sale of assets in the Permian Basin in the United States.
The company will also align its tax residency with its country of incorporation in Great Britain, where it will hold board meetings and where it will also be determined where the CEO and CFO will operate. The Hague will continue to host the global production division, the integrated gas businesses and the renewable energies hub as well as the projects and technology division.
In 2005, when the Koninklijke Nederlandsche Petroleum Maatschappij and the Shell Transport and Trading Company merged, Shell was registered in Britain with tax residency in The Netherlands and a dual share structure. It was assumed from the outset that the A/B structure would not be permanent, the company said.
After these latest changes are completed, Shell presumed that the company will no longer meet the requirements to use the name “Royal”.
“Carrying the Royal designation has been a source of immense pride and honour for Shell for more than 130 years. However, the company anticipates it will no longer meet the conditions for using the designation following the proposed change,” the company said in a statement.
“Therefore, subject to shareholder approval of the resolution, the Board expects to change the company’s name from Royal Dutch Shell plc to Shell plc.”
Company officials link the changes to the need to fit a new energy and climate policy within the framework of the energy transition.
“The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” the Chairman of the Board of Directors, Sir Andrew MacKenzie, said as part of the company statement. “As a result, Shell will be better positioned to seize opportunities and play a leading role in the energy transition.”
