His family has been the fist in the shadows for Stormwind's kings since the city was rebuilt. His grandmother Pathonia founded the Stormwind Assassins, an organization that existed to kill Stormwind's enemies. She raised her grandson to follow her into that line of work, and follow her he has.
One could ask why Stormwind needs spies and killers, of course, as their very existence could be seen as an affront to the ideals of the Alliance and the kingdom they represent, but Mathias Shaw knows better. Stormwind has been wholly destroyed in the past. Stormwind and her kings have been betrayed, have been plotted against, have suffered cruelly from those who scurry in the darkness, avoiding the light. Mad cultists, disgruntled stoneworkers, even malefic black dragons have worked to subvert and suborn the city of lions. Stormwind has enemies.
To those enemies, Mathias Shaw and SI:7 eternally stand opposed in the very darkness these scurrying rats call home. Whether it be defending their home city or taking the battle to Cho'gall's forces in the Twilight Highlands, SI:7 stands ready to destroy all enemies of their people. And Mathias Shaw is not afraid to be the first in the fray.
Shaw's been a fixture of Stormwind for years now, but it's true that until recently he's been relatively confined to that city. To be fair, he had a lot on his plate with the disappearance of the king, the unrest between the stonemasons and the House of Nobles, and the strange machinations of the Defias Brotherhood, as well as incursions from Blackrock orcs into Redridge and a riot in the Stockades. He and his old friend Elling Trias participated in attempting to unravel the mystery of the Missing Diplomat, and it was Shaw who helped uncover the true fate of Nathanos Marris the Blightcaller. SI:7 agents under his command worked to defend Stormwind and the Alliance and ferret out their enemies even before the return of King Varian and the rooting out of Onyxia, the true agent operating against the city and its people.
But for all that, Shaw and his men and women didn't get much use in Outland or Northrend. It's understandable that they weren't deployed to an alien world where the Alliance already had forces on the ground and didn't really require much in the way of espionage. And as far as the war in Northrend is concerned, well, the Lich King wasn't trying to hide anything, and the Horde generally is pretty hard to infiltrate. While the cold war between factions turned hot after the Wrathgate, the only direct action resulting from that was the Battle for the Undercity, which was not the kind of operation that Shaw and SI:7 tend to organize.
Hammer against stiletto
With King Varian's return and the conflict between Horde and Alliance more active, as well as increased cult activity from the Twilight's Hammer, Shaw finds his city and people under attack from threats both overt and covert. After assisting young Prince Anduin Wrynn in unmasking Major Samuelson and his role in the Twilight cult, Mathias heads up a daring operation in the very heart of the Bastion of Twilight to oppose Cho'gall's forces, slay his minions and disrupt his operations. Shaw personally kills several highly placed and deadly Twilight agents, as well as helping bring down the mammoth Skullcrusher, a gronn serving under Cho'gall directly. Shaw is also instrumental in helping open Grim Batol to attack.
But who is Mathias Shaw, exactly? Described as a fairly unremarkable-looking man with brown hair and eyes, able to blend into almost any social situation and be unobtrusive, how did he rise to lead the spy agency of Stormwind? One could say it was nepotism, since it was his own grandmother Pathonia Shaw who effectively founded Stormwind's first shadow organization, the Stormwind Assassins.
The family business
Pathonia herself was chosen for the job while she was in jail for being a thief, and she was recruited to form an agency that would serve to stop people like her, on the principle that the best thief-takers are usually thieves. In addition, Stormwind saw the need for a group to do the various dirty jobs like assassination that needed doing but which no one wanted to admit needed doing. Being neither a common cutpurse nor a common killer, Pathonia decided that her group would not just be the knife in the dark but would go about its ugly business with flair.
The Stormwind Assassins became an elite group under her watchful eye, trained to be loyal to the rebuilding nation of Stormwind and each other. The Assassins saw use in the years of the First and Second Wars, but due to the nature of their opposition, it was hard for them to do more than whittle away at their enemies. (The Horde was too numerous and dedicated to a principle of leadership that resists outsiders infiltrating it, and no Assassin got lucky enough to be personal friends with Blackhand or Doomhammer, the way Garona manged to get close enough to assassinate Llane Wrynn via her relationship with Medivh.)
Shaw grew up in his grandmother's organization. His mother was a member of the Assassins and died when he was a child, his father unknown. He became an assassin himself before he was a teenager and made his way through the organization, learning as he went. He killed the person his mother died trying to kill on his very first assignment. It's unsure exactly when, but at some point during all this, Mathias became close friends with young Edwin Van Cleef and helped teach him the skills of a roofwalker and throatcutter, skills that Edwin would resume using after his attempt to return to stonemasonry ended in the betrayal of the nobles.
The exact relationship between SI:7 and the Stormwind Assassins is unknown. It's fair to assume that they are effectively one and the same, with SI:7 the slightly more public "intelligence agency" concealing the work of the Assassins. Shaw makes use of agents all over Azeroth and may even undertake missions without the approval of his king or other Alliance leaders, since the loyalty of his agents is nearly absolute. (It's entirely possible that Shaw at least knew about the attempt to kidnap Thrall near the Lost Isles.) For the past 10 years, since his grandmother's decision to retire, Shaw has been in fact if not actually in name the most powerful spy and assassin in the Alliance ranks.
With recent events showing Shaw taking a more active hand in affairs, it's possible the spymaster will become a more visible force, but the Shaws generally prefer the shadows, and Mathias is no exception. His work in discovering Cho'gall's crafting of the Hammer of Twilight and killing the ogre mage's lieutenants was accomplished from a position of secrecy, and it is in darkness that the chief assassin of Stormwind works.
While you don't need to have played the previous Warcraft games to enjoy World of Warcraft, a little history goes a long way toward making the game a lot more fun. Dig into even more of the lore and history behind the World of Warcraft in WoW Insider's Guide to Warcraft Lore.