Unilever 2001 Annual Report Download - page 38

Unilever Annual Report & Accounts and Form 20-F 2001
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The appointment of Advisory Directors is provided for in
the Articles of Association of both parent companies,
although they are not formally members of the Boards.
They are therefore not entitled to vote at meetings of the
Boards and bear no legal responsibility for the Boards’
actions. Their terms of appointment, role and powers are
enshrined in resolutions of the Boards. As well as Board
committee meetings, they attend the quarterly directors’
meetings, other directors’ conferences, and other meetings
with the Chairmen. In addition, the Advisory Directors may
meet as a body, at their discretion, and appoint a senior
member as their spokesman.
Our Advisory Directors are chosen for their broad
experience, international outlook and independence.
They are appointed by resolutions of the Boards, normally
for an initial term of three to four years and thereafter for
terms of three years. They are usually appointed for a
maximum of three consecutive terms and retire at age 70.
Their remuneration is determined by the Boards. All
appointments and re-appointments are based on the
recommendations of the Nomination Committee.
In the context of Unilever’s unique arrangements for
corporate governance, all the Advisory Directors are
considered to be independent of Unilever.
Board Committees
The directors have established the following committees:
Executive Committee
The Executive Committee comprises the Chairmen of NV
and PLC and five other members: the two division directors
for Foods and for Home & Personal Care; the Corporate
Development Director; the Financial Director; and the
Personnel Director. Members of the Executive Committee
are appointed by all of the directors for one year at a time.
The Executive Committee is responsible for agreeing
priorities and allocating resources, setting overall corporate
targets, agreeing and monitoring divisional strategies and
plans, identifying and exploiting opportunities created by
Unilever’s scale and scope, managing external relations at
the corporate level and developing future leaders. The
Executive Committee generally meets formally every three
to four weeks and is chaired, alternately, by the Chairmen
of NV and PLC. The Committee is supplied with information
by the Executive Committee Secretariat.
Audit Committee
The Audit Committee comprises a minimum of three
Advisory Directors and meets at least three times a year.
It is chaired by Hilmar Kopper, and its other members
are Oscar Fanjul, Claudio X Gonzalez and Onno Ruding.
The Committee’s meetings are attended by the Head of
Corporate Audit and our external auditors, who have
direct access to its Chairman. It reviews the overall risk
management and control environment, financial reporting
arrangements and standards of business conduct. The Head
of Corporate Audit ensures that the Committee is supplied
with necessary information.
Corporate Risk Committee
The Corporate Risk Committee currently comprises the
Financial Director, the Foods Director, the Home & Personal
Care Director, the Personnel Director, the General Counsel,
the Head of Corporate Audit and the Controller. It meets
at least twice a year. The objective of the Committee is to
assist the Boards to carry out their responsibilities to ensure
effective systems of risk management and internal control.
It reports to the Boards, the Executive Committee and,
as relevant, to the Audit Committee. The Committee is
supplied with information by the Controller.
External Affairs and Corporate Relations Committee
The External Affairs and Corporate Relations Committee
currently comprises four Advisory Directors and normally
meets four times a year. It is chaired by Lady Chalker, and
its other members are Lord Brittan, Senator George Mitchell
and Charles R Shoemate. The Committee advises on
external matters of relevance to the business – including
issues of corporate social responsibility – and reviews our
corporate relations strategy. The Committee is supplied with
necessary information by the Corporate Development
Director.
Nomination Committee
The Nomination Committee comprises a minimum of three
Advisory Directors and the Chairmen of NV and PLC and
meets at least once a year. It is chaired by Frits Fentener van
Vlissingen and its other members are Antony Burgmans,
Bertrand Collomb, Wim Dik, Niall FitzGerald and
Lord Simon. It recommends to the Boards candidates for
the positions of Director, Advisory Director and Executive
Committee member. The Committee is supplied with
information by the Joint Secretaries.
Remuneration Committee
The Remuneration Committee currently comprises four
Advisory Directors and meets at least twice a year. It is
chaired by Frits Fentener van Vlissingen, and its other
members are Bertrand Collomb, Wim Dik and Lord Simon.
It reviews executive remuneration and is responsible for
the executive share-based incentive plans. The Committee
determines specific remuneration packages for each of the
directors. The Committee is supplied with information by
the Head of the Private Administration Department.
Routine business committees
Committees are set up to conduct routine business as and
when they are necessary. They comprise any two of the
directors and certain senior executives. They administer
certain matters previously agreed by the Boards or the
Executive Committee. The Joint Secretaries are responsible
for the operation of these committees.
All committees are formally set up by Board resolution
with carefully defined remits. They report regularly and
are responsible to the Boards of NV and PLC.
Requirements in the Netherlands and the UK
Unilever is subject to corporate governance requirements
in both the Netherlands and the United Kingdom.
A vital factor in the arrangements between NV and PLC
is their having the same directors. As the concept of the
non-executive director, as recognised in the United
Kingdom, is not a feature of corporate governance in the
Netherlands, and the Supervisory Board, as recognised in
CORPORATE GOVERNANCE
Report of the Directors