Unilever 2002 Annual Report Download - page 45

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. Usually, shares in the group companies are
held ultimately by either NV or PLC, with the main exception
being that the US companies are owned by both and, as a
result of the legal integration of Bestfoods into Unilever, a
number of the group companies are partly held by Unilever
United States, Inc. These group companies are therefore also
ultimately owned jointly by NV and PLC.
These arrangements are designed to create a balance
between the funds generated by the NV and PLC parts of
the Group.
See pages 128 to 131 for a listing of the Group’s principal
subsidiaries and also Control of Unilever on page 138.
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.
Our operations are 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 46 to 48.
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
aweek 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 Annual General Meetings. For details of the nomination
procedure for directors, see Control of Unilever on
page 138. 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. These
other executive officers are the corporate officers listed on
page 48. None of our directors or executive officers is
elected or appointed 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.
Unilever Annual Report & Accounts and Form 20-F 2002
42 Corporate governance
Shareholders Shareholders
Directors
NV PLCEqualisation and
other agreements
NV Owned
Operating Companies
PLC Owned
Operating Companies
Jointly Owned
Operating Companies