Unilever 2002 Annual Report Download - page 47

44 Corporate governance
Unilever Annual Report & Accounts and Form 20-F 2002
Nomination Committee
The Nomination Committee comprises a minimum of three
Advisory Directors and the Chairmen of NV and PLC and
meets at least once a year. It is chaired by Frits Fentener
van Vlissingen and its other members are Antony Burgmans,
Bertrand Collomb, Niall FitzGerald, Lord Simon and Jeroen
van der Veer. It recommends to the Boards candidates for
the positions of Director, Advisory Director and Executive
Committee member. The Committee is supplied with
information by the Joint Secretaries.
Remuneration Committee
The Remuneration Committee currently comprises four
Advisory Directors and meets at least three times a year.
It is chaired by Frits Fentener van Vlissingen, and its other
members are Bertrand Collomb, Lord Simon and Jeroen van
der Veer. It reviews executive directors’ remuneration and
is responsible for the executive share-based incentive plans.
The Committee determines specific remuneration packages
for each of the directors. The Committee is supplied with
information by J A A van der Bijl, Joint Secretary of Unilever.
The detailed report to shareholders on directors’
remuneration is on pages 49 to 60.
Routine business committees
Committees are set up to conduct routine business as and
when they are necessary. They comprise any two of the
directors and certain senior executives and officers of the
Company. They administer certain matters previously
agreed by the Boards or the Executive Committee.
The Joint Secretaries are responsible for the operation
of these committees.
All committees are formally set up by Board resolution
with carefully defined remits. They report regularly and
are responsible to the Boards of NV and PLC.
Requirements in the Netherlands and the UK
Unilever is subject to corporate governance requirements in
both the Netherlands and the United Kingdom. A vital factor
in the arrangements between NV and PLC is their having the
same directors. The concept of the non-executive director, as
recognised in the United Kingdom, is not a standard feature
of corporate governance in the Netherlands, and the
supervisory board, as recognised in the Netherlands, is
unknown in the United Kingdom. It has hitherto not been
considered practicable to appoint supervisory or non-
executive directors who could serve on both Boards.
Nevertheless, Unilever’s Advisory Directors have long
provided a strong independent element, performing many
of the functions of supervisory and non-executive directors.
The Audit, External Affairs and Corporate Relations and
Remuneration Committees consist exclusively of Advisory
Directors and the majority of the members of the
Nomination Committee are Advisory Directors. See pages
46 and 47 for details.
The Committee on Corporate Governance in the
Netherlands issued its report ‘Recommendations on
Corporate Governance in the Netherlands’ in 1997.
NV applies the Committee’s recommendations for
supervisory directors to its Advisory Directors in so far
as these are in line with their specific role within Unilever.
NV complies with all other recommendations of the
Committee except that the Board of Directors takes the view
that requests for an item to be placed on the agenda for a
shareholders’ meeting must be supported by more than an
insignificant proportion of the shareholders and will
therefore only accept requests from a shareholder or group
of shareholders holding at least 1% of the voting rights
attaching to the issued share capital of NV. Requests must
be submitted, at the latest, 60 days prior to the date of the
meeting.
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 (‘the Combined Code’)
appended to the United Kingdom Listing Rules.
As already explained, the Boards exercise control through
the Executive Committee. Responsibilities are shared by the
Chairmen of NV and PLC, while the Advisory Directors
perform many of the functions of the supervisory board
members or non-executive directors, although they are not
formally members of the Boards. For the purposes of the
Combined Code, the Boards have not appointed a senior
independent director, on the basis that issues for the
Boards can be raised with whichever Advisory Director is
the Chairman of the relevant Board Committee and the
Advisory Directors are entitled to meet as a body and
appoint a senior member as their spokesman.
Unilever’s remuneration policy is contained within the report
on the directors’ remuneration and interests on pages 49 to
60. This also deals with aspects of non-compliance with the
Combined Code in this area. Members of the Audit,
Remuneration and Nomination Committees will be available
to answer questions at the Annual General Meetings of
both NV and PLC. The members attending each meeting will
not necessarily include the Chairman of the Committee,
since these meetings take place at about the same time in
Rotterdam and London respectively.
A description of Unilever’s compliance with ‘Internal
Control – Guidance for Directors on the Combined Code’
is given on pages 63 and 64.
Unilever has, since its inception, adopted the principle
that it is good practice that the most senior roles in NV
and PLC are shared and not concentrated in one person.
As a consequence it is a principal tenet of its governance
philosophy, which finds expression in two people who each
combine the roles of Chairman and Chief Executive and
who meet regularly for joint decision making. This carefully
balanced arrangement has served Unilever’s unique
constitutional arrangements very well for many years and
the Boards believe that to separate these roles would only