An interview with Shell CEO Jeroen van der Veer.

Max Christern| July/Aug 2007 issue
He thinks for a moment, folds his arms in front of his chest and then shakes his head almost apologetically. We’ve just asked him if he looks back on the past few years with satisfaction. After all, Jeroen van der Veer has helped Royal Dutch Shell through a very rough patch. More than three years after the oil giant saw its stock market value drop $13 billion in one day when it was discovered the company was overstating its oil reserves, its chief executive prefers not to use the word “satisfied.”
“That’s not the way I think,” he says. “I’m a person who always sees how much more work there is to be done. This is simply a job I have to do. As the boss of this company, every day I have to ask myself several questions: What’s going well today, and what’s going badly? Where do we want to be in 10 years, and how do we get there? You always have to keep looking ahead to the future. That’s leadership. You keep setting clear priorities, and keep up a decent pace.” You might expect a corporate chief to be a bit boring. But Van der Veer is anything but. We were riveted by how he described what’s on his mind in a plain, no-fuss, consistent manner.
He admits the past three years have been tough ones. “In the first few months, the three directors worked seven full days a week, and a lot of nights. Once in a while, I’d go jogging in the dunes in the mornings, but that was it. The three of us would often sit together here in The Hague on Saturday mornings, reflecting on the experiences of the past week. And we would have rather efficient meetings afterward. Yes, they were good.” He laughs at the paradox—good memories of one of the worst periods in Shell’s history. A period in which he, Jeroen van der Veer, born October 27, 1947, can rightly claim to have played a crucial role.
The Shell scandal is well known: At the beginning of 2004, the company was found to have overstated its proven oil and gas reserves. The U.S. Securities and Exchange Commission (SEC) levied a large fine. The affair cost two Shell executives their jobs: British CEO Philip Watts and Dutchman Walter van de Vijver. Van der Veer succeeded Watts. “It was March 3, 2004,” he says. “That night, I hand-wrote a memo listing Shell’s three top priorities; we needed to leave the reserves problem behind us as quickly as possible, concentrate totally on the business and work on the structure and the culture of the company.”
That week he delivered his message from the top of the staircase in the huge lobby of Shell’s headquarters in The Hague. Hundreds of employees were listening. “I said, What can you do for Shell?” he recalls, a conscious paraphrasing of John F. Kennedy. “That’s what it’s about right now. Not what Shell can do for you.”
Had the employees stopped thinking of what they could do for the company?
“Yes, but not just at Shell. It had to do with the aftermath of the fin de siècle mood. We’d gotten spoiled. Everything was growing; there was work everywhere; there seemed to be no end to it at a lot of companies. I think people needed to be brought back down to earth. I gave a speech to Shell’s 400 senior managers in Houston in May 2004. And I told them, No new gurus! We’re going to do it ourselves. The leaders must lead.”
Van der Veer gets out of his chair, walks to his desk and fishes a folder out of a drawer. “It’s in here, that speech. I wrote it myself.” He reads aloud: “We are going through a very difficult time in the history of Shell. We are a strong company, but some very serious mistakes were made.” He leafs through the pages. “No new gurus. Yes, I still know it by heart. You can’t make things complicated. Simple language—everyone understands that.”
Your critics use simple language too. They say Shell pollutes the environment and doesn’t do enough to generate sustainable energy.
“The fuels people use today are different from the ones they used 100 years ago, and in 100 more years they’ll be different again. Shell has to anticipate that by developing new technology faster than the competition and making it commercial. Ten years from now, Shell will have to have developed a form of alternative energy into a big commercial business. We just don’t know yet which alternative to oil and gas it will be. We have a few horses in the race: biodiesel, wind, thin-film solar-cell technology and hydrogen. It’s going to be one of those. That is my vision; that’s what this company should concentrate on.”
So the criticism from environmental organizations and activist shareholders is not unjustified, is it?
“The impact of our operations, in those people’s perception, is very often negative. If a refinery suddenly appears outside your door, it has an enormous impact. Shell has to get people to acknowledge the fact that energy has to be produced one way or another, and that when Shell does it there’s a good balance between all the parties involved. That includes the people who live in a place where we want to build a chemical complex, as we experienced in China. There, an entire village was moved, and it was really a great success. People shouldn’t think that Shell is only concerned with economic gain. The question is always how to find the right balance.”
Sometimes that balance tips in the wrong direction, such as in the Brazilian town of Paulínia, near São Paulo, where toxins from an old Shell chemical plant leaked into the soil and groundwater and children became seriously ill.
“After a great deal of medical research, there was found to be no link between our actions in Paulínia and those illnesses. That was officially determined at a public hearing by the environmental authorities in December 2005. But the people in the village, of course, aren’t really willing to believe that. And there’s also quite a financial component to it for them, don’t forget. Anyway, cleanup of the site has been underway for several years in consultation with the environmental authorities, and the process will continue for some time .”
Do responsibilities like those ever keep you awake at night?
“I can imagine that people have a genuinely different perception of how we work. And then it’s up to us to explain. We haven’t always been so good at that, although we’re working extremely hard on it. But you’ll always have situations in which you’re unable to convince somebody. What annoys me professionally—although I don’t lose sleep over it—is when people distort the facts, when they deliberately give an inaccurate representation of things and then act as if they know best. If we do that, everyone will jump on us immediately, but a lot of groups are allowed to say whatever they like without their errors being raised for discussion. That does amaze me sometimes.”
Professional annoyance—that’s about the strongest emotion you can catch the Shell boss having. Otherwise he follows a clear maxim: Stop talking and get on with things. Ask him who inspires him in this regard, and he sighs somewhat uncomfortably and confesses, “That’s a question I can’t answer. I’ve never had a favourite singer or a favourite book. I don’t have a role model. Listening is very important to me. I often get the best ideas that way. I listen to our people, but also to journalists, demonstrators, analysts. I want to understand where they’re coming from, how they think. I often ask them questions too. Then you can have a dialogue. And then you understand each other better. Many problems can be traced back to a difference in pace: One person is further along than the other.”
He glances at his watch, eager to get back to work. We try one more time: Do you ever have moments of pride? “Once again, I never think about things like that. I’m proud of this company in a general sense. Of course, we aren’t perfect, but some things, like the attitude of our staff, are pretty good.”
But what about real euphoria—butterflies in your stomach?
“No. When I’m watching a game at my hockey club and we score a goal, everybody around me might jump up and cheer, but I always stay sitting down. And back when I used to play myself and I’d score a goal, I’d think, All right— goal. But I’m not one to cheer. I don’t put up with things for very long either though.”
You must need to do something now and then to recharge your batteries.
“Set the alarm and get out of bed, is what I always used to say. Roll up your sleeves.”
We’re not getting anything more genuine than that out of Jeroen van der Veer. He’s said what he had to say, and he wants to get back to what he was doing when we came in. “OK, back to work!” he says, shaking our hands. Two seconds later, he’s back at his desk.