Unilever 2001 Annual Report Download - page 37

Unilever Annual Report & Accounts and Form 20-F 2001
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CORPORATE GOVERNANCE
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 Margarine Unie in the
Netherlands in 1927. PLC was incorporated under the
name Lever Brothers Limited in Great Britain in 1894.
Since 1930 when the Unilever Group was formed,
NV and PLC together with their group companies 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, which 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. However,
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 owned by
both. These arrangements are designed to create a
balance between the funds generated by the NV and PLC
parts of the Group.
See page 97 for a listing of the Group’s principal subsidiaries
and also Control of Unilever on page 107.
Legal Structure of the Group
Directors
The Chairmen and all of the directors are full-time
executives and directors of both NV and PLC and, as well
as holding specific management responsibilities, they are
responsible for the conduct of the business as a whole.
The Chairmen of NV and PLC are the principal executive
officers of Unilever.
Since 1 January 2001, our operations have been organised
into two global divisions – Foods and Home & Personal Care
– headed by division directors. Reporting to their respective
division directors are the Foods and the Home & Personal
Care Business Presidents, responsible for the profitability
of their regional and global businesses. For details of the
division directors and Business Presidents, see pages 37
to 39.
The directors have set out a number of areas for which
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
and Form 20-F
> Declaration of dividends
> Convening of shareholders’ meetings
> Approval of corporate strategy
> Authorisation of major transactions
All other matters are delegated to committees whose
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, who 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 107. 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, who are full-time,
for an indefinite period. None of our directors or executive
officers is elected under any arrangement or understanding.
A procedure is in place to enable directors, if they so wish,
to seek independent professional advice. On election,
directors are briefed thoroughly on their responsibilities.
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 37 to 39. 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
adequate and reflect, as far as possible, best practice.
They serve on certain key Board committees, the roles
and membership of which are described on page 35.
Shareholders Shareholders
Directors
NV PLCEqualisation and
other agreements
NV Owned
Operating Companies
PLC Owned
Operating Companies
Jointly Owned
Operating Companies