Unilever 2014 Annual Report Download - page 4

GOVERNANCE OF UNILEVER
ABOUT UNILEVER
Unlever NV (NV) and Unlever PL (PL), together wth ther group
companes have, snce the Unlever roup was formed n 1930,
operated as nearly as practcable as a sngle economc entty Ths
s acheved by specal provsons n the Artcles of Assocaton of NV
and PL, together wth a seres of agreements between NV and PL
whch are together known as the Foundaton Agreements (descrbed
below) These agreements enable Unlever to acheve unty of
management, operatons, shareholders’ rghts, purpose and
msson and can be found on our webste
The Equalsaton Agreement makes the economc poston of the
shareholders of NV and PL, as far as possble, the same as f
they held shares n a sngle company The Equalsaton Agreement
regulates the mutual rghts of the shareholders of NV and PL
Under the Equalsaton Agreement, NV and PL must adopt the
same fnancal perods and accountng polces
The Deed of Mutual ovenants provdes that NV and PL and ther
respectve subsdary companes shall co-operate n every way for
the purpose of mantanng a common operatng polcy They shall
exchange all relevant nformaton about ther respectve busnesses
– the ntenton beng to create and mantan a common operatng
platform for the roup throughout the world The Deed also contans
provsons for the allocaton of assets between NV and PL
Under the Agreement for Mutual uarantees of Borrowng
between NV and PL, each company wll, f asked by the
other, guarantee the borrowngs of the other and the other’s
subsdares These arrangements are used, as a matter
of fnancal polcy, for certan sgnfcant borrowngs They
enable lenders to rely on our combned fnancal strength
NV’s Artcles of Assocaton contan, among other thngs, the
obects clause, whch sets out the scope of actvtes that NV s
authorsed to undertake They are drafted to gve a wde scope
and provde that the prmary obectves are to carry on busness
as a holdng company, to manage any companes n whch t has
an nterest and to operate and carry nto effect the Equalsaton
Agreement At the 2010 PL AM, the shareholders agreed that
the obects clause be removed from PL’s Artcles of Assocaton
so that there are no restrctons on ts obects
Each NV ordnary share represents the same underlyng
economc nterest n the Unlever roup as each PL ordnary
share However, NV and PL reman separate legal enttes wth
dfferent shareholder consttuences and separate stock exchange
lstngs Shareholders cannot convert or exchange the shares of
one for the shares of the other
wwwunlevercom/legalstructure
BOARDS
The Boards of NV and PL have ultmate responsblty for the
management, general affars, drecton, performance and long-
term success of our busness as a whole The Boards are one-ter
boards, the same people are on both Boards and the responsblty
of the Drectors s collectve, takng nto account ther respectve
roles as Executve Drectors and Non-Executve Drectors Durng
2014, Unlever contnued to have two Executve Drectors, the hef
Executve Offcer (EO) and hef Fnancal Offcer (FO), who are
also members of the Unlever Leadershp Executve (ULE) and are
full-tme employees of Unlever The maorty of the Drectors are
Non-Executve Drectors who essentally have a supervsory role
A lst of our current Drectors, ther roles on the Boards, ther
dates of appontments and ther other maor appontments s set
out on page 54
The Boards have delegated the operatonal runnng of the roup
to the EO wth the excepton of the followng matters whch are
reserved for the Boards structural and consttutonal matters,
corporate governance, approval of dvdends, approval of overall
strategy for the roup and approval of sgnfcant transactons or
arrangements n relaton to mergers, acqustons, ont ventures
and dsposals, captal expendture, contracts, ltgaton, fnancng
and pensons The EO s responsble to the Boards and s able
to delegate any of hs powers and dscretons whch he does to
members of the ULE The ULE s chared by and reports to the
EO The bographes of ULE members are on page 55
BOARD COMMITTEES
The Boards have establshed four Board ommttees the
Audt ommttee, the ompensaton ommttee, the orporate
Responsblty ommttee and the Nomnatng and orporate
overnance ommttee The terms of reference of these
ommttees can be found on our webste and the reports of
each ommttee can be found on pages 56 to 77 Attendance
tables can be found wthn each ommttee Report
wwwunlevercom/commttees
THE GOVERNANCE OF UNILEVER
Further detals of the roles and responsbltes of the harman,
Vce harman, EO and other corporate offcers and how our
Boards effectvely operate as one board, govern themselves and
delegate ther authortes are set out n the document enttled
‘The overnance of Unlever’, whch can be found on our webste
The overnance of Unlever also descrbes the Foundaton
Agreements, Drectors’ appontment, tenure, nducton and
tranng, Drectors’ ablty to seek ndependent advce at Unlever’s
expense and detals about Board and Management ommttees
(ncludng the Dsclosure ommttee)
wwwunlevercom/corporategovernance
BOARD EFFECTIVENESS
BOARD MEETINGS
A mnmum of fve face-to-face meetngs are planned throughout
the calendar year to consder, for example, the half-year and
full-year results announcements of the roup and the Annual
Report and Accounts Other Board meetngs and telephone
conferences are held to dscuss matters that arse as well as
roup strategc ssues Meetngs of the Boards may be held
ether n London or n Rotterdam or such other locatons as the
Boards thnk ft, wth one or two off-ste Board meetngs a year
The harman sets the Boards’ agenda, ensures the Drectors
receve accurate, tmely and clear nformaton, and promotes
effectve relatonshps and open communcaton between the
Executve and Non-Executve Drectors
41Unilever Annual Report and Accounts 2014 Governance
ORPORATE
OVERNANE