SHELL PAKSITAN

CONTROL FRAMEWORK

Presenter : Noman, Asad and

Ahmed

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 ROYAL DUTCH SHELL PLC

Our purpose
Our objective is to engage efficiently and responsibly in oil, gas and other selected
businesses and participate in the development of energy sources.
Our values
The Shell General Business Principles, Code of Conduct and Code of Ethics help
everyone at Shell act in line with our core values.
Our people
We employ around 87,000 people in more than 70 countries and territories.
Leadership
Royal Dutch Shell has a single-tier Board of Directors. The executive management is
led by Chief Executive Officer, Peter Voser.

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ROYAL DUTCH SHELL PLC

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 SHELL PAKISTAN LIMITED

Shell has a rich legacy and long association with Pakistan. As one of the oldest
multinational companies in the country, Shell has been a partner in the region’s growth
and development for over a century, dating back to 1898 when Royal Dutch Petroleum
Company began supplying oil products to the subcontinent.
With this distinguished heritage, Shell Pakistan Limited leads the industry when it
comes to the introduction of new technology and services that make us a world
renowned provider of energy. Shell is the largest international player in retail outlets in
Pakistan and we provide fuel to around 1 million customers daily.
The goal of our company is to constantly improve on our customer’s experience, and
in an increasingly competitive environment, Shell’s commitment to providing top
quality, right quantity and superior service has been the driving strength of our
business in Pakistan.
Being at Shell Pakistan Limited is about values, our core values of honesty, integrity
and respect for people are at the heart of the way we manage our business. These
principles embody our commitment to society and to our country.

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INTRODUCTION

The Shell Control Framework is designed to provide

reasonable assurance that Shell will achieve its
objectives and fulfill its external obligations and
commitments. It is the single overall control framework
that applies to all Shell companies, i.e. Royal Dutch Shell
plc and all companies in which Royal Dutch Shell plc
either directly or indirectly has a controlling interest.

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THE SHELL CONTROL FRAMEWORK

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 SHELL GENERAL BUSINESS PRINCIPLES

The Shell General Business Principles describe the objectives of the

Shell Group, its core values - honesty, integrity and respect for people, its
responsibilities, and the principles and behaviors by which it does
business. They also include Shell’s commitment to contribute to
sustainable development – the need to balance short and long term
interests, integrating economic, environmental and social considerations
into business decision making. By acting in accordance with the business
principles, Shell maintains high standards of business integrity in its daily
operations.
The custodian of the business principles is the Chief HR and Corporate
Officer.

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CODE OF CONDUCT

The Code of Conduct instructs individuals on how to behave in

accordance with the Shell General Business Principles. All staff in
Shell companies must follow the Code of Conduct. The Code also
provides directions to additional sources of information including how
to report concerns or seek advice. There are no exemptions from the
requirement to comply with the Shell General Business Principles
and Code of Conduct.
The custodian of the code is the Chief Ethics and Compliance
Officer.

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STANDARDS AND MANUALS

Standards are mandatory rules established where major risks are

present that require common treatment across the Shell Group.
Senior leadership is accountable for the implementation and
consistent application of relevant Standards. Standards are subject
to specific rules for their development, maintenance and retirement.

All Standards have a designated custodian who has authority to

approve exceptions on the application. Businesses/Functions
maintain a record of any approved exception.

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 STANDARDS AND MANUALS CONT….

Group Standards
Group Standards are adopted for matters that present significant Group-
level risks or matters that are subject to external stakeholder expectations
and external disclosures. They also establish mandatory rules on how to
comply with legal and regulatory requirements and how to operate in
accordance with the Shell General Business Principles. They apply
across all of Shell’s activities and are mandatory for all Shell companies.
Authority for new Group Standards (and substantial changes to these)
has been delegated to the Chief Executive Officer (CEO), except for the
Finance Standards for which authority has been delegated to the Chief
Financial Officer (CFO).

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STANDARDS AND MANUALS CONT….

Operating Standards
Operating Standards define mandatory rules that are needed in
addition to the Group Standards, to manage significant risks
encountered in specific business activities. These Standards are
approved by the relevant Business Head(s) or one level below and
are mandatory for staff involved in the specific business activity.
Manuals
Manuals provide more detailed mandatory instructions on how to
implement Group or Operating Standards or other Foundation
components. Guidance with non-mandatory instructions or
documentation like good practice, templates and tools assist staff to
carry out their duties in compliance with applicable Standards and
Manuals.
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 MANAGEMENT PROCESS
The objectives of Shell are to engage efficiently, responsibly and profitably
in oil, gas, chemicals and other selected businesses and to participate in the
search for and development of other sources of energy to meet evolving
customer needs and the world’s growing demand for energy. The strategy,
planning and appraisal processes are designed to translate the Group’s
objectives into a Shell strategy, to develop and implement plans that deliver
the strategy and to appraise performance to enable timely intervention.
Strategy
The Shell strategy is the framework within which Business and enabling
strategies are developed. The CFO is responsible for the development of
Shell strategy, for approval by the Board. Business strategies are developed
to give substance to the Shell strategy at Business level. Business Heads
are responsible for their development for approval by the CEO. Function
Heads are responsible for the development of Functional strategies to
support the Shell and Business strategies, for approval by the CEO. 12
 MANAGEMENT PROCESS CONT….

Planning
The objective of strategic planning is to translate the strategic direction
into specific objectives, measures, targets and initiatives that guide the
actions and resource allocation of the business. The strategic planning
process is a ‘top down’ process, cascading Royal Dutch Shell plc targets
to Businesses, Functions and Business Units, with clear accountabilities
against which progress will be appraised to enable intervention when
required.
The strategic plan is reviewed and approved by the Board every three
years to establish strategic intent based on an assessment of the
external environment, competitive position and the Shell portfolio.
Annually the underlying assumptions will be tested to ensure continued
relevance of the strategic plan and assess whether an earlier update is
required.
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 MANAGEMENT PROCESS CONT….
Appraisal
Performance appraisal concentrates on the execution of the strategic and
operating plans. On a quarterly basis, the CEO holds performance
appraisal discussions with Business Heads in a one-to-one setting,
focusing on performance trends and a forward look relative to the
objectives as agreed in the strategic and operating plans.
The purpose of the quarterly performance appraisal is to drive
accountability for business performance, in particular by ensuring that
early action is taken where performance falls short of plan or where the
environment in which the business is being conducted diverges
significantly from that expected.
The performance appraisal covers financial and non-financial metrics
focused on the short term delivery and the longer term achievement of
strategic goals. Businesses and Functions will conduct similar reviews at
lower level. 14
MANAGEMENT PROCESS CONT….

Individual Performance Reviews

Everyone in Shell should know what they are accountable for – and
to whom.

Individual annual goals and targets are agreed between staff

members and their line managers to help deliver their Business
Unit’s objectives for the year and foster the development of the
individual. Performance reviews against these goals and targets
(with no compromise on the business principles and Code of
Conduct) are undertaken on a common basis and performance
reward processes are executed consistently across Shell.

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 STATEMENT ON RISK MANAGEMENT

Shell operates in an environment of uncertainty and recognizes that risk

management enables informed resource allocation. Shell’s risk-based
approach is described in its Statement on Risk Management and Group-
wide instructions for its implementation. This risk-based approach applies
to the overall design of the Shell Control Framework and all of its
components.
The Statement on Risk Management requires Businesses and Functions
to understand the relationship between the business environment,
objectives, risk (upside and downside) and performance, and to establish
appropriate risk responses to deal with both routine risks and the need to
maintain business continuity in a range of emergency scenarios and
events.
The custodian of the statement is the Group Controller.
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 RISK MANAGEMENT

The Statement on Risk Management applies to all Businesses, Functions

and Business Units and to all activities that they undertake. This includes
opportunity development, project execution and day-to-day operations.

Risk is defined as a potential future event that may influence the

achievement of objectives in either a positive or negative manner.
Effective risk management protects and increases the value from
business decisions, because conscious choices are made in relation to
risks that have an impact on, or result from, these business decisions.
The objective of risk management is not, therefore, arbitrarily to reduce or
eliminate risk.

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CONTROLS AND ASSURANCE

Controls
Management puts in place and maintains controls to help ensure that
it will achieve its objectives and fulfill its external obligations and
commitments.
Internal control is a process effected by people (directors,
management and their staff); it is accomplished by what they do and
say. The overall control environment is a fundamental prerequisite for
the effective operations of controls.
Controls are continuous, structured activities or mechanisms that
help ensure that Businesses and Functions achieve their objectives,
including compliance with legal and regulatory requirements.
In short, the modify RISKS.

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CONTROLS AND ASSURANCE CONT...

Self Assessment
Management is accountable for regularly self-assessing that all
controls, individually and collectively, continue to be designed and
operated effectively to mitigate risk.
Self assessment methods (for example a confirmation by the control
operator or a sample based test) take into account the relative
importance of the control as well as its risk of failing.
Businesses and Functions identify, investigate, share and learn from
incidents or compliance issues. They operate incident reporting and
management procedures covering control failures.

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CONTROLS AND ASSURANCE CONT...

Independent Assurance (External Audits):

The independent assurance providers focus on the effectiveness of the risk-based
control framework, including the review of the self-assessment mechanisms as
operated by Businesses and Functions. Businesses and Functions are required to
provide all necessary assistance to enable independent assurance providers to carry
out their duties.

Shell Internal Audit:

Shell Internal Audit’s Business Integrity Department investigates ethics and
compliance incidents (including fraud) and is custodian of a global helpline. Significant
issues are reported to the Business Integrity Committee, the Audit Committee, the
Executive Committee and other senior executives.

Process Safety & HSSE & SP Controls Assurance Team:

Through its mandate from the Corporate and Social Responsibility Committee,
provides independent assurance as to the effectiveness of the HSSE&SP Controls,
including Process Safety Controls.
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CONTROLS AND ASSURANCE CONT...

Shell Ethics and Compliance Office:

It monitors and reports on compliance program effectiveness to the Executive
Committee, the Corporate and Social Responsibility Committee, the Audit Committee
and ultimately the Board. The Shell Ethics and Compliance Office is headed by the
Chief Ethics and Compliance Officer (CECO) who reports to the Legal Director.

Resources Assurance and Reporting team:

Provides independent assurance as to the compliance of Discovered
Resource Volumes and in-field Prospective Resources and to the
effectiveness of the Integrated Resource Control Framework.

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 CONCLUSION

It is clear that the Shell Control Framework can only work with a culture that
is based on our shared core values of honesty, integrity and respect for
people. These shared values, driven by the right tone at the top, and
supported by empowered and disciplined staff at all levels, underpin all the
work we do.
The External Environment is of huge importance to an enterprise like Shell.
Not only do laws, regulations and commitments to external stakeholders
matter, so are geo-political, societal, technological developments, actions by
our competitors, commodity prices etc. of great influence to our strategy and
therefore to our objectives. Shell operates in an environment of uncertainty
and significant volatility, that provides risks (upside and downside) to meeting
objectives.
Shell has therefore defined a risk-based approach to the overall design of the
Shell Control Framework and its components.
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