BusinessCompany NewsLack of checking cost Boynton her job

Lack of checking cost Boynton her job

Shell group CFO Judy Boynton was forced to step down after an independent report slammed her for taking 'virtually no action' to enquire into the basic facts relating to the oil giant's 'aggressive' oil reserves bookings.

Link: Shell lied about oil reserves

Her resignation was the latest saga in the ongoing controversy that has surrounded Shell’s accounts and reserves for the past two months. It also involved a further restatement of the company’s reserves.

The report found that the compliance role of the finance function ‘was not effective’ on the reserves, and although Boynton was responsible for ensuring that financial disclosures to the market and regulators were correct, she took ‘virtually no action’ to check the facts behind the figures.

Instead, she relied on Shell’s existing ‘checks and balances’, and was ‘reassured’ that its exploration and production department was ‘focused on issues’.

Davis Polk & Wardwell investigated Shell over its ‘recategorisation’ of four billion barrels of oil reserves for the period up to the end of 2002. The report was requested by Shell’s group audit committee and external auditors KPMG and PricewaterhouseCoopers.

The ‘strained’ relationship between former chairman and chief executive Sir Philip Watts and exploration and production CEO Walter van de Vijver also came under the microscope. They have both since quit Shell.

Vijver had expressed concern about the EP department’s ability to meet various targets or ‘external promises’, particularly those related to reserves. He stated in a letter that ‘…EP was in a far worse state in mid 2001 than was ever portrayed by my predecessor to senior management’.

In an email to Sir Philip, Vijer also said that he was ‘sick and tired of lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings’.

Shell has fully accepted the findings and ‘will ensure prompt action on its recommendations’. Consultant Ryder Scott Company is expected to be appointed as full-time external auditors of the oil reserves.

Related Articles

M&S business rate liabilities based on £570m rateable value

Company News M&S business rate liabilities based on £570m rateable value

4m Emma Smith, Managing Editor
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

12m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

1y Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

1y Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

1y Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

1y Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

1y Emma Smith, Managing Editor