SHELL’S directors yesterday suffered a humiliating rebuff in the Netherlands when investors in Royal Dutch Petroleum, representing almost 40 per cent of the Dutch holding company’s shares, voted against discharging the directors from liability.

The annual resolution to discharge managing directors and supervisory board directors is normally a formality at Royal Dutch meetings, but a number of Dutch pension funds yesterday took the chance to express anger over the misreporting of 4.5 billion barrels of oil and gas reserves.

In London, private shareholders used the annual meeting of Shell Transport & Trading to condemn the performance of Shell’s non-executive directors and protest against a £1 million severance payment to Sir Philip Watts, who in March was sacked as chairman of the committee of managing directors (CMD).

Sunil Pal, a private investor, asked why the non-executive directors had not done more to prevent the reserves scandal and he accused them of “abysmal performance”. Pointing to Sir Mark Moody-Stuart, a former chairman of Shell’s CMD who sits on the Shell Transport board, Mr Pal said: “When this scandal came up, Sir Mark was present. Why did he allow this departure from Shell’s business principles? He should resign from all his other directorships.”

Sir Mark is chairman of Anglo American, the miner.

Knight Vinke, the adviser to Calpers, the US pension fund, complained that the steering group charged with reviewing Shell’s board structure was packed with people connected to Shell’s management, including Jeroen van der Veer, the current CMD chairman, Maarten Van der Bergh, a former managing director, and Jonkheer Aarnout Loudon, the son of a former managing director.

Eric Knight, head of Knight Vinke, said: “They need to go the extra mile. It needs to be seen to be independent.”

In contrast to the anger in the Hague, protests by institutions at the London AGM were muted, with 10 per cent of shares voted against Shell’s remuneration committee report. However, there was criticism by private shareholders. One said that if Sir Philip deserved a retirement present, “the board should do what we do in my company and club together to pay for it”.

Sir Peter Job, head of the remuneration committee, said that Sir Philip was paid no bonus for 2003 and £3 million of shares were forfeited.

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