History of Shell: Code of Conducts

2021-05-07 19:05:52
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Businessperson Marcus Samuel, a shopkeeper's decision to expand his business to trade in shells from the Far East laid the foundation for the beginning of a global brand (Shell Global, 2016). There was a confined market for oil until the development of the internal combustion engine and the arrival of Karl Benz and the first Mercedes. The boom in the automobile industry in the United States opened up avenues for new business enterprises such as sale of gasoline. A trip to Asia got Marcus interested in oil export business (Shell Global, 2016). He commissioned a steamer for the bulk transport of oil. Bulk transport of oil was a revolution in the oil industry since it significantly cut down costs. Samuels company was initially named the Tank Syndicate but later in 1897, changed to Shell Transport and Trading Company (Shell Global, 2016).

The Royal Dutch Company was set up in 1890 to exploit the oilfields in Sumatra (Shell Global, 2016). Shell Transport and Trading Company and The Royal Dutch Company merged into the Royal Dutch Shell Group in 1907 (Shell Global, 2016). The Royal Dutch Shell Group began selling gasoline imported from Sumatra to the United States in 1912 with their direct competition from the Standard Oil Company. The group rapidly expanded to have a global presence. The group began exploring and producing oil and associated products in Russia, Romania, Venezuela, Mexico and the United States (Shell Global, 2016).

Code of Conducts in Shell

The code of ethics of the Royal Dutch Shell plc is a guideline developed alongside the Statement of General Business Principles ("SGBP") that among other things designates that conflict of interest between personal financial interests and their role in the running of the business (Shell Global, 2016). The code has been made in line with Section 406 of the Sarbanes Oxley Act and the listing requirements of the New York Stock Exchange (Shell Global, 2016). Subsequently, the guidelines provide requirements related to disclosure control and the management of code of ethics in the context of Royal Dutch Shell plc.

The code of ethics requires all members to act with honesty, integrity and expect the same measure to be accorded to them by others in the work environment and relationship with colleagues. The code also requires staff to excuse themselves from instances in which they have to make decisions that pose conflict of interest as stated in the applicable terms and conditions in the employment contract. Employees are further advised to desist from having any personal interests vested in contracts or deals with a Shell company or a company associated with a Shell company or a deal where immediate family members have vested interest (Moody-Stuart, 2014).

Employees are also held responsible for the decisions related to the code of ethics that are in their control. This statement is aimed at fostering accountability of the staff to the code of ethics. Deviation from the code of ethics leads to sanctions such as stern disciplinary action, dismissal, removal from office and other solutions appropriate to the situation and within the confines of the law (Moody-Stuart, 2014). All individuals bound by the code of ethics have the responsibility to report in writing to the prescribed authorities any breach they witness. Any individual who reports a suspected breach or conflict of interest is protected by the code of ethics from retaliation and any jobholder involved in retaliation is subject to the sanctions earlier mentioned.

Strategic Responses towards Unethical Behavior

Royal Dutch Shell plc has been cited in the past for alleged involvement in unethical practice in India, Nigeria, United States and the United Kingdom (Corporate Watch, 2005). In response to climate change and their role in production of greenhouse gases from combustion of hydrocarbons, Royal Dutch Shell plc took a defensive strategy. In a 2000 deal with Siemens, Royal Dutch Shell plc stated their dedication to combatting global warming and began exploring technology that would absorb carbon dioxide gas from the atmosphere and pump it underground (Royal Dutch Shell plc .com, 2013). However, it was discovered that the technology was aimed at pressurizing more oil to be drained from the underground reserves as opposed to genuine concerns over global warming (Royal Dutch Shell plc .com, 2013).

Following pressure from human rights bodies, Royal Dutch Shell plc took an apparent stand against injustices going on in various countries and regions of its operation for instance Nigeria and Pakistan (Moody-Stuart, 2014). Prior to that, the company continued to operate benefiting regimes that violated human rights. This response by Royal Dutch Shell plc to acknowledge the emerging agenda of human rights violations in its operations was an accommodative strategy to maintain a positive image to the public of a multinational that had respect for human dignity, basic rights, and local traditions (Moody-Stuart, 2014).

Ethics are established to govern the operations of an institution and to ensure the individuals working for the institution stick to the fundamental principles of the institution. Deviation from ethical codes is usually met by sanctions. The Royal Dutch Shell plc is a multinational that began a little over a century ago and expanded to be a global brand. Given its size, Royal Dutch Shell plc has to stick to codes of conduct to govern its large operation. Royal Dutch Shell plc has been accused of ignoring malpractices such as human rights violations in many countries of its operation. They have taken a defensive and accommodative strategy in various instances. Organizations should recognize the impact of their operations and implement proactive strategies that would build their corporate image.

 

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