Unilever 2006 Annual Report Download - page 39

36 Unilever Annual Report and Accounts 2006
Report of the Directors (continued)
Corporate governance (continued)
The Directors stop holding executive office on ceasing to be
Directors. Those appointed prior to 2004 retire at the latest by
the age of 62. Appointees from 2004 onwards retire at an age
between 60 and 65, as decided by either them or Unilever.
We do not grant our Executive Directors any personal loans or
guarantees.
There are no family relationships between any of our Executive
Directors, other key management personnel or Non-Executive
Directors. None of our Executive Directors are elected or
appointed under any arrangement or understanding. Executive
Directors are to obtain approval from the Chairman for all outside
Board appointments. Normally not more than one such
appointment should be accepted. For Executive Directors’
biographies see page 46.
Non-Executive Directors
The Non-Executive Directors share responsibility for the execution
of the Boards’ duties, taking into account their specific
responsibilities, which are essentially supervisory. In particular,
they comprise the principal external presence in the governance
of Unilever,and provide a strong independent element. See
page 46 for their biographies.
Role and Responsibility
The key elements of the role and responsibilities of our Non-
Executive Directors are:
•supervision of and advice to the Group Chief Executive;
•developing strategy with the Group Chief Executive;
•scrutiny of performance;
•controls;
•reporting of performance;
•remuneration of and succession planning for Executive
Directors; and
•governance and compliance.
Our Non-Executive Directors arechosen for their broad and
relevant experience and international outlook, as well as
their independence. They form the Audit Committee, the
Nomination Committee, the Remuneration Committee and
the Corporate Responsibility and Reputation Committee
(formerly External Affairs and Corporate Relations Committee).
The roles and membership of these key Boardcommittees are
described on page 37. The profile set by the Boards for the
Non-Executive Directors and the chart used for orderly
succession planning can be seen on our website at
www.unilever.com/investorcentre/corpgovernance.
Meetings
The Non-Executive Directors meet as a group, without the
Executive Directors present, under the chairmanship of the Senior
Independent Director.In 2006 they met twice as a group. In
addition, the Non-Executive Directors usually meet before each
Board meeting with the Chairman, the Group Chief Executive and
the Joint Secretaries.
Senior Independent Director
Our Non-Executive Directors have appointed David Simon as
Senior Independent Director. He acts as their spokesman. The
Senior Independent Director is consulted by the Chairman on
the agenda and arrangements for Board meetings. He is also,
in appropriate cases, a point of contact for shareholders and
other stakeholders.
Tenure
Our Non-Executive Directors submit themselves for re-election
each year. Their nomination for re-election is subject to continued
good performance which is evaluated by the Boards, based on
the recommendations of the Nomination Committee. The
Nomination Committee carefully considers each nomination for
reappointment. The Non-Executive Directors normally serve for a
maximum of nine years.
Remuneration
The remuneration of the Non-Executive Directors is determined by
the Boards, within the overall limit set by the shareholders at the
AGMs in 2006, and it is reported on page 61. Details of the
engagement of our Non-Executive Directors can be seen on the
Unilever website.
Independence
Taking into account the role of Non-Executive Directors, which is
essentially supervisory, and the fact that they make up the key
committees of the Boards, it is important that our Non-Executive
Directors can be considered to be independent.
Our definition of ‘independence’ for Directors is set out in
‘The Governance of Unilever’. It is derived from the applicable
definitions in use in the Netherlands, UK and US. Our current
Non-Executive Directors areconsidered to be independent of
Unilever,with the exception of Antony Burgmans. Our Boards
reached this conclusion after conducting a thorough review of all
relevant relationships of the Non-Executive Directors, and their
related or connected persons.
Anumber of relationships, such as non-executive directorships,
exist between various of our Non-Executive Directors and
companies that provide banking, insurance or financial advisory
services to Unilever. Our Boards considered in each case the
number of other companies that also provide or could readily
provide such services to Unilever,the significance to those
companies of the services they provide to Unilever, the roles
of the Non-Executive Directors within those companies and
the significance of that role to our Non-Executive Directors.
It concluded that none of these relationships threaten the
independence of the Non-Executive Directors concerned. For
example, the Boards have satisfied themselves that Leon Brittan’s
position at UBS Investment Bank does not involve him in any way
in its broking relationship with Unilever. They have noted that
Lynda Chalker’sinvolvement in consultancy services for Unilever
had been terminated beforeshe was elected a Non-Executive
Director in May 2004. The Boards have formed the view that the
fact that Antony Burgmans was a member of the Supervisory
Board of ABN AMRO until April 2006 and that David Simon is a
senior adviser of Morgan Stanley International, were not material.