Statement of compliance with the UK Corporate Governance Code

The Board confirms that, throughout the year, the Company has applied the principles, both in spirit and in form, and complied with the provisions set out in the UK Corporate Governance Code issued by the Financial Reporting Council (FRC) in July 2018 (the “Code”), with the exception of provisions 5 and 19 noted below. A copy of the Code can be found on the FRC’s website: www.frc.org.uk.

Shell’s governance arrangements have been considered alongside the Code. The information set out in the Directors’ report, including the Board committee reports on (section “Nomination and Succession Committee”, section “Safety, Environment and Sustainability Committee”, section “Audit Committee Report” and section “Directors’ Remuneration Report”) is intended to provide an explanation of how the Code’s principles were applied practically throughout the year. We also provided clear and meaningful explanation below where we believe stakeholders may benefit from more specific information on a particular Code provision 4.

Chair tenure (Provision 19)

Charles O. Holliday (Chad) was appointed as Chair in 2015, after four and a half years as a Non-executive Director. In September 2019 he reached a tenure of nine years. Chad stood down from the Board at the 2021 AGM.

The 2018 UK Corporate Governance Code introduced a new requirement that the Chair not remain in post beyond nine years of the date of their first appointment. As a result, for part of the year in review (from January 1 to May 18, 2021), Shell did not comply with this provision. But the Code also notes that to facilitate effective succession planning and development of a diverse Board this period can be extended, particularly where the Chair was an existing non-executive Director on appointment. Within the 2019 Annual Report we provided a thorough explanation of why Chad was to remain on the Board for longer than nine years as we transitioned to the (then) new Code requirement. We also said when his tenure would end. An explanation also featured in section “The Board of Shell plc” of the 2020 Annual Report. Following the 2021 AGM, Chad was succeeded by Sir Andrew Mackenzie, in line with the timeline Shell disclosed in 2020 (within the 2019 Annual report).

Workforce engagement (Provision 5)

The size and diversity of our employee base and wider workforce have complicated the feasibility of implementing any of the three specific workforce engagement methods recommended in the Code. The Board believes that its current approach to workforce engagement continues to be pragmatic and effective, particularly when considered against the required coverage needed for a global organisation such as Shell.

Elsewhere in this Annual Report, we explain how our people are essential to the successful delivery of the Shell strategy, and how the Board recognises the importance of understanding their views through engagement. In previous Annual Reports, we communicated the Board’s desire and intention to increase its direct engagements, when the Board, committees and individual Directors visit our sites across the world. The ongoing travel restrictions associated with the COVID-19 pandemic again limited our ability to do this in 2021. While some engagements could not be held physically, many were held virtually, and there were opportunities for the Board to speak with our stakeholders and obtain feedback. The Board also intends to keep the effectiveness of the engagements under review. Stakeholder engagement also continues to be enhanced in management reporting. More information on the current approach and a description of the channels used by the Board, its committees, and the Executive Committee are outlined in “Workforce engagement”.

AGM Voting (provision 4)

At the 2021 AGM more than 20% of shareholders supported a resolution which the Board had recommended voting against. Provision 4 of the UK Governance Code requires certain actions to be undertaken if more than 20% of shareholders vote in a way which is different to what the Board recommended. There are three stages to these actions. First, explain when announcing the voting results what actions the company intends to take to consult shareholders to understand the reasons behind the voting result. Shell included this explanation with its voting results, published on May 18, 2021. Second, an update on the engagement with shareholders should be published no later than six months after the shareholder meeting. This statement was added to the Shell website in November 2021. Third, a final summary of the engagement and the actions taken should be included within the Annual Report. This information is provided in section “Understanding and engaging with our stakeholders”.

Corporate governance requirements outside the UK

In addition to complying with applicable corporate governance requirements in the UK, the Company complies with the rules of Euronext Amsterdam as well as Dutch securities laws because of its listing on that exchange. The Company likewise adheres to US securities laws and the New York Stock Exchange (NYSE) rules and regulations because its securities are registered in the USA and listed on the NYSE.