Unilever 2005 Annual Report Download - page 50

Report of the Directors
Unilever Annual Report and Accounts 2005 47
Corporate governance
(continued)
Anti-takeover constructions and control over the company
With reference to bpp IV.3.9, NV has no anti-takeover
constructions, in the sense of constructions that are intended
solely, or primarily, to block future hostile public offers for its
shares. Nor does it have any constructions whose specific purpose
is to prevent a bidder, after acquiring 75% of the capital, from
appointing or dismissing members of the Board and subsequently
altering the Articles of Association. The acquisition through a
public offer of a majority of the shares in a company does not
under Dutch law preclude in all circumstances the continued right
of the board of the company to exercise its powers.
Meetings of analysts and presentations to investors
We have extensive procedures for handling relations with and
communicating with shareholders, investors, analysts and the
media (see description on page 40). Whilst the important
presentations and meetings are conducted in accordance with
bpp IV.3.1, due to the large number of such presentations and
meetings and overlap in information, some of the less important
ones are not announced in advance, made accessible to everyone
or put on our website.
Provision of information
We consider it important to comply with all applicable statutory
regulations on the equal treatment of shareholders and provision
of information and communication with shareholders and other
parties (P IV.2 and P IV.3). In the communications between us and
our shareholders and other parties, we comply with all applicable
legislation and regulations.
Requirements – the United Kingdom
PLC is required, as a company that is incorporated in the United
Kingdom and listed on the London Stock Exchange, to state how
it has applied the principles and how far it has complied with the
provisions set out in Section 1 of the Combined Code issued in
1998, as revised in 2003 (‘the Combined Code’), appended to the
United Kingdom Listing Rules.
In the preceding pages we have complied with the requirement to
report on how we apply the Principles and the provisions in the
Combined Code.
2005 was the first year of our new Boards’ operation. To ensure
optimal functioning of the Board and the individual Directors and
compliance with the most recent developments in best practice,
the Nomination Committee commissioned Spencer Stuart to carry
out a full review of the functioning of the Boards and of its
governance arrangements. This review concluded that our
arrangements stood comparison with our peers. A full report was
made to the Boards in February 2006 and a range of minor
changes in terms of the day-to-day operations of the Boards will
be introduced during the balance of the year. A Board evaluation
and Chairman and individual director appraisal process is
scheduled for the second quarter of 2006. Thus, the changes
following the said review can be taken into account in the
evaluations.
Antony Burgmans, who before May 2005 was an Executive
Director, is not considered to be independent. The Nomination
Committee and the Boards nominated him for election as a
Non-Executive Director in 2005 because of his thorough
knowledge of Unilever and its operations. In addition to his role
as Chairman, the Board considered his knowledge of the business
to be essential to see through the changes resulting from the
structure review.
The Board considers that the Chairmanship of Bertrand Collomb
and the Non-Executive Directorship of Oscar Fanjul, and Lynda
Chalker’s membership of the International Advisory Board, of
Lafarge, do not affect their status as independent in relation to
their Non-Executive Directorships of Unilever.
Due to the requirement for Unilever to hold two AGMs for its
respective companies on consecutive days, it may not always be
possible for all Directors and possibly the Chairmen of the Audit,
Remuneration and Nomination Committees to be present at both
meetings. The Chairman therefore ensures that a majority of
Directors attend both meetings and that at least one member of
each Committee attends each AGM.
Requirements – the United States
Both NV and PLC are listed on the New York Stock Exchange and
must therefore comply with such of the requirements of US
legislation, such as the Sarbanes-Oxley Act of 2002, regulations
enacted under US securities laws and the Listing Standards of The
New York Stock Exchange as are applicable to foreign private
issuers. In some cases the requirements are mandatory and in
other cases the obligation is to ’comply or explain’.
We have complied with the requirements concerning corporate
governance that were in force during 2005. Attention is drawn in
particular to the remit of the Audit Committee on page 39 and
the Report of the Audit Committee on page 70.
Actions already taken to ensure compliance that are not
specifically disclosed elsewhere or otherwise clear from reading
this document include:
• the issuance of a Code of Ethics for senior financial officers;
• the issuance of instructions restricting the employment of
former employees of the audit firm; and
• the establishment of a policy on reporting requirements under
the SEC relating to the standards of professional conduct for US
attorneys.
In each of these cases, existing practices were revised and/or
documented in such a way as to conform to the new
requirements.