Outlook: Royal Dutch/Shell

WONDERFUL THING, consensus management. Everyone agrees, so everyone's happy. Better still, claim exponents, it makes executives less worried about doing "the wrong thing", so far from leading to corporate paralysis, it ought to generate quite adventurous and decisive executive action. Unfortunately, it also makes it hard to the point of impossibility to hold any one accountable, since all decisions carry collective responsibility. Furthermore, the easiest consensus to reach is always the passive one - to do nothing.

At Royal Dutch/Shell, it has been the disadvantages of consensus management, rather than its claimed advantages, that have been more in evidence in recent years. No one was ever fired at Shell over the Brent Spar fiasco. Come to think of it, few people are ever fired at all at Shell.

For many years this was seen as a sign of good and inspired management. Not for Shell the go-getting, hire and fire mentality of the modern corporation. Shell seemed to be able to maintain its position as one of the world's most successful and admired companies without resorting to such methods. This perception may always have owed more to the sheer size and power of the company than the underlying reality.

It has taken the investment community a while to recognise it, but in recent years Shell has slipped seriously behind its peers in terms of return on capital, the most obvious benchmark of management's ability to generate shareholder value. Belatedly, and spurred on by the ever falling oil price, Shell is beginning to act.

Out go the business committees and national fiefdoms and in comes executive- led decision making across product groups. It is not yet certain whether this management shake-up also includes making Mark Moody Stuart, the present chairman, into an American style, all-powerful chief executive. He's always been against such an approach in the past, but this stance too may have been more the product of entrenched culture and consensus thinking than anything else. Presumably we'll know more on Monday, when Mr Moody Stuart meets increasingly disgruntled City analysts and investors.

Certainly they are demanding a good deal more than the somewhat half- hearted management restructuring announced yesterday. They'll want to see a concrete plan for bringing Shell up to industry standards in terms of return on assets. To match Exxon Mobil, this for Shell means doubling up on its present performance, which in turn requires taking a great deal more out of costs than the already draconian cuts announced a couple of months back. Has Shell got the stomach for it? We'll see.