Unilever 2006 Annual Report Download - page 40

Unilever Annual Report and Accounts 2006 37
Report of the Directors (continued)
Corporate governance (continued)
The Boards consider that the Executive Directorship of Byron
Grote combined with the Non-Executive Directorship of Antony
Burgmans of BP p.l.c. does not affect Dr Grote’s status as
independent in relation to his Non-Executive Directorship of
Unilever. The Boards also consider that Jean-Cyril Spinetta’s
position as Chairman/CEO of Air France-KLM SA combined with
Kees Storm’s Chairmanship of the Supervisory Board of KLM Royal
Dutch Airlines N.V. does not affect their status as independent in
relation to their Non-Executive Directorships of Unilever.
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. Antony Burgmans will be succeeded
by Michael Treschow as an independent Chairman at the AGMs in
2007, subject to his election as a Non-Executive Director.
None of our Non-Executive Directors are elected or appointed
under any arrangement or understanding.
Board committees
The Boards have established the following committees, all
formally set up by Board resolution with carefully defined remits.
They are made up solely of Non-Executive Directors with the
exception of the Corporate Responsibility and Reputation
Committee which has an Executive Director as a member, and
report regularly to the Boards. The remits can be found on
our website.
Audit Committee
The Audit Committee is comprised only of independent Non-
Executive Directors with a minimum requirement of three. It is
chaired by Kees Storm, and its other members are Wim Dik,
Charles Golden and Byron Grote. The Committee met five times
in 2006, and the members attended all meetings. The Boards
have satisfied themselves that all the current members of the
Committee are competent in financial matters and have recent
and relevant experience and that, for the purposes of the US
Sarbanes-Oxley Act of 2002, Kees Storm is the Audit Committee’s
financial expert. The Committee’s meetings are attended, by
invitation, by the Chief Financial Officer, the General Counsel,
the Deputy Chief Financial Officer, the Chief Auditor and our
external auditors.
The Audit Committee assists the Boards in fulfilling their oversight
responsibilities in respect of the integrity of Unilever’s financial
statements; risk management and internal control arrangements;
compliance with legal and regulatory requirements; the
performance, qualifications and independence of the external
auditors; and the performance of the internal audit function. The
Committee is directly responsible, subject to local laws regarding
shareholder approval, for the nomination, compensation and
oversight of the external auditors.
The Audit Committee is fully compliant with the rules regarding
audit committees that are applicable in the Netherlands, UK and
US. The Committee’s responsibilities and powers are fully aligned
with all requirements in the UK, US and the Netherlands.
The Audit Committee is supplied with all information necessary
for the performance of its duties by the Chief Auditor, Chief
Financial Officer, and Deputy Chief Financial Officer. Both the
Chief Auditor and the external auditors have direct access to the
Audit Committee separately from management.
See page 63 for the Report of the Audit Committee to the
shareholders.
Nomination Committee
Our Nomination Committee comprises a minimum of three
independent Non-Executive Directors. It is chaired by David Simon
and its other members are Jean-Cyril Spinetta, Jeroen van der
Veer and Antony Burgmans. It met six times in 2006 and the
members attended all meetings except that David Simon was
absent for one meeting. The Committee recommends to the
Boards candidates for the positions of Director. It also has
responsibilities for succession planning and oversight of corporate
governance matters. It is supplied with information by the
Joint Secretaries.
See page 48 for the Report of the Nomination Committee
to shareholders.
Remuneration Committee
Our Remuneration Committee comprises three independent Non-
Executive Directors. It is chaired by David Simon and its other
members areJean-Cyril Spinetta and Jeroen van der Veer.It met
six times in 2006 and the members attended all meetings except
that David Simon was absent for one meeting.
The Committee reviews Directors’ remuneration and is responsible
for the executive share-based incentive plans. It determines,
within the parameters set by our shareholders, specific
remuneration arrangements for each of the Executive Directors,
the remuneration scales and arrangements for Non-Executive
Directors and the remuneration of the tier of management
directly below the Boards. The Committee is supplied with
information by Jan van der Bijl, Joint Secretary of Unilever.
The detailed report of the Remuneration Committee to
shareholders on Directors’ remuneration is on pages 49 to 62.
Corporate Responsibility and Reputation Committee
The Corporate Responsibility and Reputation Committee currently
comprises four Non-Executive Directors and one Executive
Director. It is chaired by Lynda Chalker and its other members
areLeon Brittan, Antony Burgmans, Wim Dik and Ralph Kugler.
Following the 2007 AGMs, subject to their election, Leon Brittan
will chair the Committee and its members will be Genevieve
Berger, Ralph Kugler, Narayana Murthy and Hixonia Nyasulu.
The Committee, which replaced the External Affairs and
Corporate Relations Committee, has responsibility for the
oversight of Unilever’sconduct with regardto its corporate
and societal obligations and its reputation as a responsible
corporate citizen.
See page 64 for the Report of the Corporate Responsibility and
Reputation Committee to shareholders.