Unilever 2000 Annual Report Download - page 32

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Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors
Corporate governance
History and organisational structure of Unilever
NV and PLC are the two parent companies of the Unilever
Group of companies. NV was incorporated under the
name Naamlooze Vennootschap M argarine Unie in the
Netherlands in 1927. PLC w as incorporated under the
name Lever Brothers Limited in Great Britain in 1894.
Since 1930 when the Unilever Group was formed, NV and PLC
have operated, as nearly as is practicable, as a single entity.
They have the same directors, adopt the same accounting
principles, and are linked by a series of agreements. The
Equalisation Agreement, w hich regulates the mutual rights of
the two sets of shareholders, is particularly important. It makes
the position of the shareholders of both companies, as far as
possible, the same as if they held shares in a single company.
NV and PLC are separate companies, with separate stock
exchange listings and different shareholders. You cannot
convert or exchange the shares of one for shares of the
other and the relative share prices on the various markets
can, and do, fluctuate. This happens for a number of
reasons, including changes in exchange rates. How ever,
over time the prices of NV and PLC shares do stay in
close relation to each other, in particular because
of our equalisation arrangements.
NV and PLC are holding and service companies. Our
businesses are carried out by our Group companies around
the world. The holding companies have agreed to co-operate
in all areas, to exchange all relevant business information
and to ensure all group companies act accordingly. In most
cases, shares in the group companies are held ultimately by
either NV or PLC. The main exception is that US companies
are ow ned by both – 75% by NV and 25% by PLC. These
arrangements are designed to create a balance between the
funds generated by the NV and PLC parts of the Group.
Shares in Bestfoods’companies worldwide were acquired
by Unilever United States, Inc. As a result they are currently
ultimately owned by NV and PLC in the ratio 75:25.
See page 101 for a listing of the Group’s principal
subsidiaries and also Control of Unilever on page 112.
Directors
The Chairmen and all of the directors are full-time
executives and directors of both NV and PLC and, as w ell
as holding specific management responsibilities, they are
responsible for the conduct of the business as a w hole. The
Chairmen of NV and PLC are the principal executive officers
of Unilever.
During 2000, our operations worldw ide were organised into
12 Business Groups, each w ith a Business Group President.
With effect from 1 January 2001, our operations have
been organised into tw o global divisions – Foods and
Home & Personal Care (HPC) – headed by Division Directors.
For details of the Division Directors and Business
Presidents, see pages 33 to 35.
The directors have set out a number of areas for w hich the
Boards have direct responsibility for decision-making. They
meet to consider the following corporate events and actions:
•Agreement of quarterly results announcements
•Approval of the Annual Report and Accounts
•Declaration of dividends
•Convening of shareholders’ meetings
•Approval of corporate strategy
•Authorisation of major transactions
All other matters are delegated to committees w hose
actions are reported to and monitored by the Boards.
Board meetings are held in London and Rotterdam and
chaired by the Chairmen of NV and PLC. The Chairmen
are assisted by the Joint Secretaries, w ho ensure the Boards
are supplied with all the information necessary for their
deliberations. Information is normally supplied a week
prior to each meeting.
Directors are elected by shareholders at the Annual General
Meetings of NV and PLC, to hold office until the end of the
next AGM. For details of the nomination procedure for
directors, see Control of Unilever on page 112. All directors
submit themselves for re-election each year and retire at the
latest by the age of 62. They are executive officers, and
cease to hold executive office on ceasing to be directors.
We appoint our other executive officers, w ho are full-time,
for an indefinite period. None of our directors or executive
officers is elected under any arrangement or understanding.
All of our directors have been with Unilever full-time for
at least five years, and in most cases for most of their
business careers. For details see pages 33 to 35.
There are no family relationships between any of our
directors or executive officers.
Advisory Directors
The Advisory Directors are the principal external presence in
the governance of Unilever. The role of an Advisory Director
involves giving advice to the Boards in general, and to the
Executive Committee in particular, on business, social and
economic issues. One of their key roles is to assure the
Boards that our corporate governance provisions are
Legal structure of the Group
Directors
NV Equalisation and
other agreements PLC
NV Owned
Operating Companies Jointly Owned Operating Companies PLC Owned Operating Companies
Shareholders Shareholders