Unilever 2002 Annual Report Download - page 46

Unilever Annual Report & Accounts and Form 20-F 2002
Corporate governance 43
Report of the Directors
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 46. 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 independent
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 below.
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.
Their remuneration is determined by the Boards and this is
reported on page 59. 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. The report on
pages 59 and 60 describes the relationships between the
Advisory Directors and Unilever.
Unilever has always aspired to high standards of corporate
governance and in the light of the latest developments in
Europe and the US, it is keeping its arrangements under
active review. We currently anticipate concluding this review
early in 2004.
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 at least
monthly 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. The Committee has historically met three
times a year and in accordance with its new charter plans to
meet five times a year from 2003. It is chaired by Hilmar
Kopper, and its other members are Oscar Fanjul and Claudio
X Gonzalez. The Committee’s meetings are attended by the
Financial Director, the General Counsel, the Controller, the
Chief Auditor and our external auditors. The Committee
reviews the overall risk management and control
environment, financial reporting arrangements and
standards of business conduct. It also provides independent
monitoring of internal control arrangements. The Chief
Auditor ensures that the Committee is supplied with
necessary information. Both the Chief Auditor and the
external auditors have direct access to the Audit Committee
separately from other management.
See page 61 for the Report of the Audit Committee to
the shareholders.
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 Chief Auditor 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
risk management and systems of 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 five Advisory Directors and normally
meets four times a year. It is chaired by Lady Chalker, and
its other members are Lord Brittan, Senator George J
Mitchell, Charles R Shoemate and Professor Wim Dik. The
Committee oversees the Code of Business Principles, 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.