THE executives left at Shell’s headquarters have been far too busy hunting the missing barrels of oil to have time to browse through the company’s website. But a visit to it underlines just how big a gulf there can be between the platitudes that companies peddle and reality.

“Our core values of honesty, integrity and respect for people define who we are and how we work,” declares Shell. “These values have been embodied in our Business Principles” since 1997. Shell’s former chairman does not appear to have been aware of these Business Principles. He and the head of exploration have both left the company as details emerge of a longrunning campaign of deception which has shocked the City.

“The corporate scandals of the last year have underlined the importance of not just having core values but living up to them consistently in practice,” preaches the Shell website. Yet now it is itself the centre of a massive corporate scandal. Those who had complacently muttered that an Enron could never erupt in Britain cannot now be so sure. For if Shell, a pillar of Europe’s business establishment, can turn out to have been conning investors for years, who can guess what might be going on behind some of the racier corporate façades?

Shell, to be fair, is not about to implode, Enron-style. It is not just a highly imaginative creation with the odd wind farm attached, as Enron turned out to be. Shell has real assets, oil fields and exploration rigs, pipelines and petrol stations; it just does not have as much as it said it had. Losing the equivalent of 400 billion barrels of oil means that the company is worth many billions of pounds less than the stock market had thought.

The scandal is that the chairman, Sir Philip Watts, had known for some time that this was the case, as had the exploration director, and they may not have been the only ones. Judy Boynton, for instance, has been removed from the role of finance director and is no longer likely to feature in those lists of the country’s top businesswomen.

Cover-ups cannot last for ever and this one began unravelling last year. By December, the board had called in lawyers and their report provides some fascinating insights into how a multinational company can, at its heart, be just a few rival egos with a dubious approach to language. Walter van de Vijver, the departed exploration director, helpfully set out in e-mails his thoughts on the differences between the probable value of Shell’s oil reserves and the numbers in the books. His jargon is horrible but the sentiments expressed are chilling. Here we have a senior director of a major company detailing the conditions necessary to “fool” the market and “play for time”. Eventually, a combination of nervousness and peevishness appears to overcome him and he tells his chairman that he is “sick and tired about lying” about the reserves.

But Mr Van de Vijver’s predicament was the result of the over-optimistic valuations that had first been made when Sir Philip was in charge of that area of the business.

The City’s instant reaction to the scandal has been to declare it a massive failing in corporate governance and to blame it on a complicated structure which is shaped around Shell’s dual nationality. In the Netherlands, there is Royal Dutch Shell and in the UK, there is Shell Transport and Trading. If there were a single board, of the approved design, then this could not have happened, argue the corporate governance police.

But it could. It could happen in any organisation which is headed by a strong man surrounded by those who will not challenge him. Sir Philip prided himself on being a plainspeaking engineer who would rather get on the job than spend time courting the City or making speeches. Internally, that translated into someone who was regarded as a bully.

His role was effectively that of chairman and chief executive, concentrating a fearsome amount of power in a single individual. But even if the role had been split, Sir Philip might still have ruled alone at Shell. A curb on the power of a bully depends on there being those who are brave enough to mount the challenge. Merely having bodies in the seats marked non-executive chairman or director does nothing to stop the would-be dictator doing exactly what he wants.

Shell had often been criticised for its extraordinarily bureaucratic procedures. It seemed to employ pen-pushers on a Civil Service scale, housing them in some of the most valuable real estate in London. In recent years, that has changed, but outsiders did not realise the extent to which the company had become one man’s fiefdom.

It is not the first time that this has happened in a British boardroom. Robert Maxwell surrounded himself with a collection of theoretically respectable directors who did not interfere with his way of doing business. More recently, Lord Black of Crossharbour has provided ample evidence of the way that a raft of dignitaries can be rercruited to provide a veneer of respectability to a boardroom while doing nothing to stop the boss doing exactly what he likes. Of course, he recruited them and paid them for their support, but that should not amount to buying their silence. Perhaps they just did not realise what was going on at Hollinger as remarkable amounts of money found themselves destined for Lord Black’s personal coffers.

It must be said that the cover-up at Shell was not engineered with the aim of enriching the chairman — well not beyond his handsome salary package. But there was ego at stake. And that is often valued more highly than cash.

Join the Debate at comment@thetimes.co.uk

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts