Unilever 2006 Annual Report Download - page 37

34 Unilever Annual Report and Accounts 2006
Report of the Directors (continued)
Corporate governance (continued)
In 2007, Unilever plans to appoint its first independent Non-
Executive Chairman, Michael Treschow, subject to his
appointment as a Non-Executive Director at the AGMs.
The text that follows describes the corporate governance
arrangements since the 2006 AGMs. More information on
our corporate governance arrangements is set out in
‘The Governance of Unilever’, the Boards’ statement of
their internal arrangements, which can be found at
www.unilever.com/investorcentre/corpgovernance.
The Boards
The Boards of NV and PLC comprise the same Directors and have
the same Chairman. This ensures unity of governance and
management by ensuring that all matters are considered by the
Boards as a single intellect, reaching the same conclusions on the
same set of facts (save where specific local factors apply).
The Boards are one-tier boards, comprising Executive Directors
and, in a majority,Non-Executive Directors. The Boards have
ultimate responsibility for the management, general affairs,
direction and performance of the business as a whole. The
responsibility of the Directors is collective, taking into account
their respective roles as Executive Directors and Non-Executive
Directors. The Executive Directors have additional responsibilities
for the operation of our business as determined by the Group
Chief Executive.
Our Directors have set out a number of areas of responsibility
which are reserved to themselves and other areas for which
matters aredelegated to the Group Chief Executive and
committees whose actions are regularly reported to and
monitored by the Boards. These are described on pages 35 to 38.
Further details of how our Boards effectively operate as one
board, govern themselves and delegate their authorities are set
out in ‘The Governance of Unilever’, which can be found at
www.unilever.com/investorcentre/corpgovernance.
Appointment of Directors
Directors are appointed by shareholders at the AGMs. All existing
Directors unless they are retiring submit themselves for election
every year and shareholders can remove any of them by a simple
majority vote.
In order to seek to ensurethat NV and PLC have the same
Directors, the Articles of Association of NV and PLC contain
provisions which are designed to ensure that both NV and PLC
shareholders are presented with the same candidates for election
as Directors. This is achieved through a nomination procedure
operated by the Boards of NV and PLC through Unilever’s
Nomination Committee.
The Nomination Committee, based on the evaluation of the Boards,
its Committees and its individual members, recommends to the
Boards a list of candidates for nomination at both the Annual
General Meetings of NV and of PLC. In addition, since 2006
shareholders have been able to nominate Directors for this list but
to do so they must put a resolution to both meetings in line with
local requirements for requisitioning a resolution. In order to
ensure that the Boards remain identical, anyone being elected as a
Director of NV must also be elected as a Director of PLC and vice
versa. If an individual fails to be elected to both companies then
he or she will be unable to take their place on the Boards.
The provisions in the Articles of Association for appointing
Directors cannot be changed without the permission, in the case
of NV, of the holders of the special ordinary shares numbered
1 - 2400 inclusive and, in the case of PLC, of the holders of
PLC's deferred stock. The NV special ordinary shares may only be
transferred to one or more other holders of such shares. The
joint holders of both the NV special ordinary shares and the
PLC deferred stock are N.V. Elma and United Holdings Limited,
which are joint subsidiaries of NV and PLC. The boards of N.V.
Elma and United Holdings Limited comprise the members of the
Nomination Committee.
Board meetings
Our Boards meet at least seven times a year to consider important
corporate events and actions, such as:
•approval of corporate strategy;
•approval of the corporate Annual Plan;
•review of risks and controls;
•authorisation of major transactions;
•review of the functioning of the Boards and their Committees;
•preparation of the Annual Report and Accounts;
•declaration of dividends;
•agreement of quarterly results announcements;
•convening of shareholders’ meetings;
•nominations for Boardappointments; and
•approval of Board remuneration policy.
In 2006 the Boards of NV and PLC met eight times. All our
Executive Directors attended all meetings. All the Non-Executive
Directors attended all meetings, except for Wim Dik who missed
one meeting; Lynda Chalker, David Simon and Jean-Cyril Spinetta
who each missed two meetings, and Jeroen van der Veer who
missed three meetings. Board meetings are normally held either
in London or Rotterdam. The Chairman is assisted by the Joint
Secretaries, who ensure that the Boards are supplied with all the
information necessary for their deliberations. The Chairman and
the Joint Secretaries involve the Senior Independent Director (see
page 36) in the arrangements for Board meetings.
Board induction and training
Upon election, Directors receive a comprehensive Directors’
Manual and are briefed thoroughly on their responsibilities.
Updates on corporate governance developments and investor
relations matters are frequent items at Board meetings.
On-going training is provided for Directors by way of site visits,
presentations, circulated updates, teach-ins and agenda items
at Boardor Board committee meetings on, among other things,
Unilever’sbusiness, corporate governance, regulatory
developments, and investor relations matters. In 2006, a Board
meeting was held at Port Sunlight which included a visit to one
of Unilever’s Research and Development facilities.