Unilever 2003 Annual Report Download - page 54

Unilever Annual Report & Accounts and Form 20-F 2003 51
Corporate governance
Both the Executive Committee and the auditors have for many
years had safeguards to avoid the possibility that the auditors’
objectivity and independence could be compromised. In overview,
our procedures in respect of services provided by
PricewaterhouseCoopers are:
• Statutory audit – Procedures in respect of statutory audit
services are detailed on page 50. This category includes fees for
the statutory audit of Unilever’s financial statements and those
of its subsidiaries.
• Other audit services – This is audit and similar work that
regulations or agreements with third parties require the
auditors to undertake. These services include formalities relating
to borrowings, shareholder and other circulars and various
other regulatory reports.
• Audit-related services – This is work that, in their position as
the auditors, they are best placed to undertake. It includes
internal control reviews, other reports and work in respect of
acquisitions and disposals.
• Tax services – In cases where they are best suited, we use
the auditors. All other significant tax consulting work is put
to tender.
• General consulting and other services – Since early 2002, our
policy has been that our external auditors may not tender for
any new general consulting work. We use our auditors to
perform a limited number of other services, including risk
management advisory work and training, where these are
compatible with their work and subject to the appropriate level
of pre-approval.
The Audit Committee has approved a policy regarding the
above three non-audit categories. This lists in detail the
particular services which PricewaterhouseCoopers is and is not
permitted to provide. In the case of the types of work which
PricewaterhouseCoopers is allowed to perform, the policy
provides that they are only appointed to an assignment if
proper consideration has been given to other potential service
providers, there must be bona fide advantages in using
PricewaterhouseCoopers, and, in addition, if the fee is over
€100 000, the engagement must be specifically approved in
advance by the Chairman of the Audit Committee.
Potential engagements for any services not already covered
by this policy must be referred to the Chairman of the Audit
Committee for specific pre-approval (to be ratified at the next
meeting of the Audit Committee) before PricewaterhouseCoopers
can be appointed.
The policy is regularly reviewed and updated in the light of
internal developments, external developments and best practice.
The external auditors report to the Directors and the Audit
Committee on the actions they take to comply with
the professional and regulatory requirements and best
practice designed to ensure their independence from Unilever,
including, for example, the periodic rotation of key team
members. The lead partner in charge of the audit changed
in 2001.
See note 2 on page 85 for the actual fees payable to
PricewaterhouseCoopers.
Relations with shareholders and other investors
We believe it is important both to explain the business
developments and financial results to investors and to understand
their objectives. Within the Executive Committee, the Financial
Director has lead responsibility for investor relations, with the
active involvement of the Chairmen. They are supported by
an Investor Relations Department which organises presentations
for analysts and investors. Such presentations are generally made
available on our website. Briefings on quarterly results are given
via teleconference and are accessible by telephone or via our
website. For further information visit our website at
www.unilever.com/investorcentre/.
Both NV and PLC communicate with their respective shareholders
through the Annual General Meetings. At the Annual General
Meetings, each Chairman gives a full account of the progress of
the business over the last year and a review of the current issues.
A summary of their addresses is published on our website and
released to stock exchanges and media. Copies are freely
available on request.
Our Chairmen, both in communications about the Annual
General Meetings and at the actual meetings, encourage
shareholders to attend and to ask questions. Question and
answer sessions form an important part of the meetings in both
the Netherlands and the United Kingdom. We are committed
to efforts to establish more effective ways of shareholder
communication. We actively participate in the Shareholders
Communication Channel which facilitates proxy voting in
the Netherlands and make CREST electronic proxy voting
available to institutional shareholders in the UK.
Electronic communication is becoming an important medium for
shareholders, providing ready access to shareholder information
and reports, and for voting purposes. Shareholders of PLC in the
United Kingdom can now choose to receive electronic notification
that the Annual Review, Annual Report & Accounts and Form
20-F and Notice of Annual General Meeting have been published
on our website, instead of receiving printed copies, and can
also electronically appoint a proxy to vote on their behalf
at the Annual General Meeting. Registration for electronic
communication by shareholders of PLC can be made at
www.shareview.co.uk.
We publish the proxy vote at the meetings and the outcome of
the vote, including the proxy vote, on our website.
Reporting to shareholders
The Directors’ responsibilities are set out formally on page 71.
The report to shareholders on Directors’ remuneration and
interests is set out on pages 54 to 68. The report of the Audit
Committee is set out on page 69.
The responsibility of the auditors to report on these matters is set
out on page 72.