S&P says it has positive view of Shell's structural overhaul

Ratings agency Standard & Poor's said Wednesday it viewed positively the proposed overhaul of Shell's complicated corporate structure outlined by the company last week. Shell said it planned to create a "one company, one board, one CEO" structure after almost 100 years of being governed by joint parent companies in the UK and the Netherlands. The plans, which still need to be approved by shareholders at annual meetings next year, will reduce the"governance-related concerns" S&P voiced in its latest credit review andseparate governance assessment of Shell in July this year. The proposed new structure could simplify decision-making, create direct lines of communicationbetween management and non-executive directors and enhance independentoversight, S&P said. The agency cut its long-term credit rating on Shell in April this year to "AA+" from "AAA" after successive downgrades to thecompany's proved oil and gas reserve base.The structural changes planned by Shell are expected to address the issues regarding complexity, opacity and lack of accountability that S&P believes contributed to the reserves debacle. But although the shake-up is likely to improve Shell's corporate governance, in the short term the company could see its credit rating cut further, the agency said. In addition to announcing its plans to change the company's structure, Shell last week also warned that a further restatement of reserves was possible, a move which prompted S&P to put the company's "AA+" rating on negative credit watch.