Partner Lois Herzeca quoted, <i>D&O Advisor</i>,

Partner Lois Herzeca quoted, D&O Advisor, "Shell Game"

In the September 4th D&O Advisor, an articled entitled "Shell Game" noted that "[o]ld habits die hard. In the wake of Royal Dutch/Shell Group of Companies' oil reserves reporting controversy earlier this year, the 97-year-old oil company promised to change its ways. In March the boards of each holding company...announced that they would undertake a comprehensive review of the governance structure and policies of Royal Dutch/Shell, which is set up as a unique - and critics say highly dysfunctional - joint venture....So how did a reporting problem evolve into a wholesale review - and probable overhaul - of the company's century-old governance structure? Investors and analysts alike fault Royal Dutch/Shell's awkward, bifurcated corporate structure for the breakdown in governance that led to the overstatements....'The channels of communication [are] less transparent, so it [is] more difficult to get information up to the board, and in this case, the board wasn't op top of what was happening,' says Lois Herzeca, a corporate governance expert and partner at New York's Fried, Frank, Harris, Shriver & Jacobson [LLP], who is not involved in the dispute."

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