Unilever 2003 Annual Report Download - page 51

Corporate governance
retire at the latest by the age of 62. They are executive officers,
and cease to hold executive office on ceasing to be directors.
We appoint our other executive officers, who are full time, for an
indefinite period. These other executive officers are the corporate
officers listed on page 53. None of our Directors or executive
officers are elected or appointed under any arrangement
or understanding.
All of our Directors have been with Unilever full time for at least
five years, and in most cases for most of their business careers.
For details see pages 52. There are no family relationships
between any of our Directors or executive officers.
A procedure is in place to enable Directors, if they so wish,
to seek independent professional advice. On election, Directors
are briefed thoroughly on their responsibilities and updates on
corporate governance developments are a frequent item at board
meetings. The Directors regularly visit Unilever’s operations
around the world and the Business Presidents routinely give
presentations to the Boards.
The Joint Secretaries are appointed and removed by the Boards.
Advisory Directors
The Advisory Directors have hitherto been the principal external
presence in the governance of Unilever. The role of an
independent Advisory Director involves giving advice to the
Boards in general, and to the Executive Committee in particular,
on corporate governance, business, social and economic issues.
They serve on certain key Board committees, the roles
and membership of which are described below.
The appointment of Advisory Directors is provided for
in the Articles of Association of both parent companies, although
they are not formally members of the Boards. They are therefore
not entitled to vote at meetings of the Boards and bear no legal
responsibility for the Boards’ actions. Their terms of appointment,
role and powers are enshrined in resolutions of the Boards.
As well as Board committee meetings, they attend the quarterly
Directors’ meetings, other Directors’ conferences, and other
meetings with the Chairmen. In addition, the Advisory Directors
may meet as a body, at their discretion, and appoint a senior
member as their spokesman.
Our Advisory Directors are chosen for their broad experience,
international outlook and independence. They are appointed
by resolutions of the Boards, normally for an initial term of three
to four years and thereafter for terms of three years.
Their remuneration is determined by the Boards and it, and
any other financial relationships, are reported on page 67.
All appointments and re-appointments are based on the
recommendations of the Nomination Committee.
In the context of Unilever’s unique arrangements for corporate
governance, all the Advisory Directors are considered to be
independent of Unilever. The report on pages 59 and 67
describes the relationships between the Advisory Directors
and Unilever.
The position of Advisory Director will cease if shareholders accept
the proposals being put to the NV and PLC shareholders at the
Annual General Meetings in 2004. See page 47.
Board Committees
The Directors have established the following committees:
Executive Committee
The Executive Committee comprises the Chairmen of NV and PLC
and five other members: the two Division Directors for Foods and
for Home & Personal Care; the Corporate Development Director;
the Financial Director; and the Personnel Director. Members of
the Executive Committee are appointed by all of the Directors for
one year at a time. The Executive Committee is responsible for
agreeing priorities and allocating resources, setting overall
corporate targets, agreeing and monitoring divisional strategies
and plans, identifying and exploiting opportunities created by
Unilever’s scale and scope, managing external relations at the
corporate level and developing future leaders. The Executive
Committee generally meets formally at least monthly and is
chaired, alternately, by the Chairmen of NV and PLC. The
Committee is supplied with information by the Executive
Committee Secretariat.
Audit Committee
The Audit Committee comprises a minimum of three Advisory
Directors. The Committee met five times in 2003. It is chaired
by Hilmar Kopper, and its other members are Oscar Fanjul and
Claudio X Gonzalez. The Boards have satisfied themselves that
all the members of the Committee are competent in financial
matters and that, for the purposes of the US Sarbanes-Oxley
Act of 2002, Hilmar Kopper is the Committee’s financial expert.
The Committee’s meetings are attended by the Financial Director,
the General Counsel, the Controller, 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 Chief
Auditor ensures that the Committee is supplied with necessary
information. Both the Chief Auditor and the external auditors
have direct access to the Audit Committee separately from
other management.
See page 69 for the Report of the Audit Committee to the
shareholders.
The Committee’s terms of reference, including its full
responsibilities, can be read on the Unilever website at
www.unilever.com/investorcentre/.
Corporate Risk Committee
The Corporate Risk Committee currently comprises the Financial
Director, the Foods Director, the Home & Personal Care Director,
the Personnel Director, the General Counsel, the Chief Auditor
and the Controller. It meets at least four times a year. The
objective of the Committee is to assist the Boards to carry out
their responsibilities to ensure effective risk management and
systems of internal control. It reports to the Boards, the Executive
Committee and, as relevant, to the Audit Committee. The
Committee is supplied with information by the Controller.
48 Unilever Annual Report & Accounts and Form 20-F 2003