Unilever 2003 Annual Report Download - page 52

Unilever Annual Report & Accounts and Form 20-F 2003 49
Corporate governance
External Affairs and Corporate Relations Committee
The External Affairs and Corporate Relations Committee currently
comprises four Advisory Directors and normally meets four times
a year. It is chaired by Lady Chalker, and its other members are
Lord Brittan, Senator George J Mitchell and Professor Wim Dik.
Charles R Shoemate retired as a member in 2003. The Committee
oversees the Code of Business Principles, advises on external
matters of relevance to the business – including issues of
corporate social responsibility – and reviews our corporate
relations strategy. The Committee is supplied with necessary
information by the Corporate Development Director.
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 was chaired by Frits Fentener van
Vlissingen until his retirement at the 2003 Annual General
Meeting and thereafter by Bertrand Collomb. Its other members
are Antony Burgmans, 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. The Committee’s terms of reference are
on our website at www.unilever.com/investorcentre/.
Remuneration Committee
The Remuneration Committee currently comprises three Advisory
Directors and meets at least three times a year. It was chaired
by Frits Fentener van Vlissingen until his retirement at the 2003
Annual General Meeting and thereafter by Bertrand Collomb.
Its other members are 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 54 to 68. The Committee’s terms of reference are on
our website at www.unilever.com/investorcentre/.
Other committees
The Boards and the Board Committees are assisted by:
• a Code Compliance Committee, that is responsible for
monitoring and reporting on compliance with the Code of
Business Principles. The Joint Secretaries are responsible for the
operation of this Committee; and
• a Disclosures Committee, that is responsible for helping the
Boards ensure that information that ought to be disclosed
publicly is disclosed and that the information that is disclosed
is complete and accurate. The Controller is responsible for the
operation of this Committee.
Committees are also set up to conduct routine business as and
when they are necessary. They comprise any two of the Directors
and certain senior executives and company officers. 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 these 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 – general
Unilever is subject to corporate governance requirements in the
Netherlands, the United Kingdom and the United States. 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, was, until recently, not a
feature of corporate governance in the Netherlands, and the
supervisory board, as recognised in the Netherlands, is hitherto
unknown in the United Kingdom. It is also the case that the role
of the board differs in certain key respects between the UK and
the US. 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 page 52 for details. It had hitherto not
been considered practicable to appoint supervisory or non-
executive directors who could serve on both Boards. However, as
indicated above, following a review in 2003, proposals to change
this aspect of Unilever’s corporate governance arrangements will
be put to shareholders for adoption in 2004.
Requirements – the Netherlands
In December 2003, the Corporate Governance Committee
(Tabaksblat Committee) published the definitive version of the
Dutch Corporate Governance Code (‘Dutch Code’) which replaces
the 1997 ’Recommendations on Corporate Governance in the
Netherlands’ of the Peters Committee. The Dutch legislature will
provide the Dutch Code with a legal basis, and is expected to
apply the Dutch Code to all companies, such as NV, whose
registered office is in the Netherlands and whose shares or
depositary receipts are officially listed on a recognised stock
exchange with effect from financial years starting on or after
1 January 2004.
Unilever’s compliance at present with the Dutch Code should
be considered in the light of the proposals that will be put to the
NV shareholders for consideration and approval at the Annual
General Meeting of 2004. Unilever has taken the Dutch Code
into account when making the changes to its governance
arrangements that will become effective, subject to shareholder
approval, as from the NV Annual General Meeting of 2004.
In this meeting we will discuss our corporate governance structure
and arrangements with the NV shareholders. The notice for the
Meeting will address Unilever’s main departures from the
Dutch Code.
As from the 2004 financial year onwards, Unilever will fully
disclose in its Annual Report & Accounts and Form 20-F its
compliance with the Dutch Code, as well as any non-application
of provisions of the Dutch Code and an explanation. Unilever
expects to comply with the Dutch Code to a substantial extent.
However, due to our structure, we may have to depart in certain
respects from the provisions of the Dutch Code. In line with the
recommendation made in the Dutch Code, NV intends to discuss
its compliance with the Dutch Code at the Annual General
Meeting of 2005.