Page 5: Shareholders and resolving conflicts
The start of the case study focused on the importance of shareholders. Shell's main shareholders consist of large institutional stockholders, employees and the general public.
Shell believes that it has a key responsibility to protect shareholders' investment and provide a long-term return competitive with those of other leading companies in the industry. Shell's profits have then been used to reward shareholders in the form of dividends and to plough back into research and investment in new products, new forms of energy for the future and better ways of managing fuel reserves.
Shell believes that through stakeholder dialogue and balancing the needs of different stakeholders it can continue to grow and help meet the world's energy needs.
Shell employs three criteria in making such decisions. It assesses whether:
- the economic impact of the activity is likely to yield a good return for shareholders
- the social impact will be suitable for employees and communities
- the long-term effect of its activity will harm the environment.
To avoid conflict, Shell sets minimum levels that must be met for all three areas before making a major decision or investment in any one. For example, when planning new activity on land that was previously used for other purposes such as timber or agriculture, Shell looks to strike a balance between the social opportunities or impact and financial return or risk.