Royal Dutch Shell

Shell's big surprise: van Beurden to replace Voser as CEO

July 9, 2013: 2:34 PM ET

Ben van Beurden is a Shell lifer who will likely inspire the technology divisions as the oil giant's new CEO.

By David Whitford, editor-at-large

Ben van Beurden

Ben van Beurden

FORTUNE -- The only thing that shouldn't surprise us about the choice of Ben van Beurden as the new CEO of Royal Dutch Shell, announced Tuesday, is that his choice comes as a total surprise.

"It matters slightly less who is the CEO of Shell than the CEO of Exxon Mobil," argues Christian Stadler, an assistant professor at Warwick Business School in the U.K., whose book, Enduring Success, is about European companies that have survived more than 100 years.

Unlike its smaller American competitor, Shell, the No. 1 company on Fortune's Global 500 list, has never had a tradition of strong central leadership. Until the first decade of the 21st century it never even had a CEO. Instead it was run by a committee of managing directors comprised of representatives from the two companies that came together, loosely, in 1907, to form the company we know as Shell: Royal Dutch Petroleum and Shell Transport and Trading.

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During the 1950s, says Stadler, McKinsey took a look at Shell's unorthodox arrangement and recommended it install an American-style CEO. But Shell (RSDA) refused, and while lately it has taken steps toward more centralized leadership, old habits die hard.

In some ways that's been a plus. Big Oil is as global as it gets, but local conditions vary widely. Shell's willingness to push decision-making down the chain of command has helped strengthen its ties to local markets. On the minus side, it's harder to control costs that way. That might have something to do with the fact that Shell earned $18.3 billion less in 2012 than Exxon Mobil (XOM) did, despite $31.8 billion more revenue.

Van Beurden, 55, knows the system. Like outgoing CEO Peter Voser, who is retiring, van Beurden is a Shell lifer who's been with the company for three decades. But where Voser was a finance guy, van Beurden's background is in operations and technology. He ran Shell's chemicals business until January this year, when he became downstream director in charge of refineries and was promoted to Shell's executive committee. "His appointment will inspire the technology people in the company," says Stadler.

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