Unilever 2002 Annual Report Download - page 48

Corporate governance 45
Unilever Annual Report & Accounts and Form 20-F 2002
Section 1 Section 2 Section 3 Report of the Directors
introduce undesirable and unnecessary complexity. Since
the Advisory Directors are not formally members of the
Boards, it would be inappropriate for one of them to act
as Chairman.
In all other respects, PLC has complied with the Combined
Code throughout 2002.
Auditors
Subject to the annual appointment of auditors by the
shareholders and in addition to our ongoing process of
monitoring the auditors’ performance, we undertake a
formal review every three years. The most recent review was
completed in November 2002. As a result, and on the
recommendation of the Audit Committee, the directors will
be proposing the re-appointment of PricewaterhouseCoopers
at the AGMs on 7 May 2003 (see pages 134 and 137).
Both the Executive Committee and the auditors have for
many years had safeguards to avoid the possibility that
the auditors’ objectivity and independence could be
compromised. In particular, our procedures in respect of
other services provided by PricewaterhouseCoopers are:
• Audit related services – This is work that, in their
position as the auditors, they must or are best placed to
undertake. It includes formalities relating to borrowings,
shareholder and other circulars, various other regulatory
reports and work in respect of acquisitions and disposals.
•Tax services – In cases where they are best suited, we use
the auditors. All other significant tax consulting work is
put to tender.
•General consulting – Throughout 2002 our policy was
that our external auditors may not tender for any new
general consulting work. Previously, they were able to
tender for general consulting projects.
These safeguards have been approved by the Audit
Committee and are regularly reviewed and updated in the
light of internal developments, external requirements and
best practice. Non-audit services to be undertaken by our
external auditors are now approved in advance by the Audit
Committee.
The auditors report to the directors and the Audit
Committee on the actions they take to comply with
the professional and regulatory requirements and best
practice designed to ensure their independence from
Unilever, including, for example, the periodic rotation
of key team members. The lead partner in charge of the
audit changed in 2001.
See note 2 on page 77 for the actual payments made to
PricewaterhouseCoopers.
Relations with shareholders and other investors
We believe it is important both to explain the business
developments and financial results to investors and to
understand their objectives. Within the Executive
Committee, the Financial Director has lead responsibility
for investor relations, with the active involvement of the
Chairmen. They are supported by an Investor Relations
Department which organises presentations for analysts and
institutional investors. Such presentations are generally made
available on our website. Briefings on quarterly results are
given via teleconference and are accessible by telephone or
via our website. Briefings are similarly given to update the
market between each quarterly announcement. For further
information visit our website at www.unilever.com.
Both NV and PLC communicate with their respective
shareholders through the Annual General Meetings. At the
AGMs, each Chairman gives a full account of the progress
of the business over the last year and a review of the
current issues. A summary of their addresses is published
on our website and released to stock exchanges and media.
Copies are freely available on request.
Our Chairmen, both in communications about the Annual
General Meetings and at the actual meetings, encourage
shareholders to attend and to ask questions. Question and
answer sessions form an important part of the meetings
in both the Netherlands and the United Kingdom. We are
committed to efforts to establish more effective ways of
shareholder communication. We actively participate in the
Shareholders Communication Channel which facilitates
proxy voting in the Netherlands.
Electronic communication is becoming an important
medium for shareholders, providing ready access to
shareholder information and reports, and for voting
purposes. Shareholders of PLC in the United Kingdom can
now choose to receive electronic notification that the
Annual Review, Annual Report & Accounts and Form 20-F
and Notice of Annual General Meeting have been published
on our website, instead of receiving printed copies, and can
also electronically appoint a proxy to vote on their behalf at
the Annual General Meeting. Registration for electronic
communication by shareholders of PLC can be made at
www.shareview.co.uk.
Reporting to shareholders
The directors’ responsibilities are set out formally on
page 63 and 64. The report to shareholders on directors’
remuneration and interests is set out on pages 49 to 60.
The report of the Audit Committee is set out on page 61.
The responsibility of the auditors to report on these
matters is set out on page 65.