Unilever 2004 Annual Report Download - page 58

Unilever Annual Report and Accounts 2004 55
Corporate governance
(continued)
Non-Executive Directors
The Non-Executive Directors share responsibility for the execution
of the Board’s duties, taking account of their specific
responsibilities, which are essentially supervisory. They, in
particular, comprise the principal external presence in the
governance of Unilever, and provide a strong independent element.
See pages 68 and 69 for their biographies.
The key elements of the role and responsibilities of our
Non-Executive Directors are:
• supervision of and advice to the Executive Committee;
• developing strategy with the Executive Committee;
• scrutiny of performance;
• controls;
• reporting of performance;
• remuneration of and succession planning for Executive
Directors; and
• governance and compliance.
Our Non-Executive Directors are chosen for their broad and relevant
experience and international outlook, as well as their independence.
They also form the Audit Committee, the External Affairs and
Corporate Relations Committee, the Remuneration Committee and
the majority of the Nomination Committee. The roles and
membership of these key Board Committees are described on
page 56.
The Non-Executive Directors meet regularly as a group, without the
Executive Directors present, under the chairmanship of the Senior
Independent Director. Subsequent to the Annual General Meetings
in May 2004 they met four times as a group.
As well as Directors’, Non-Executive Directors’ and the relevant
Board Committee meetings, Non-Executive Directors attend other
Directors’ conferences and quarterly meetings with the Chairmen.
Our Non-Executive Directors have appointed Bertrand Collomb as
Unilever’s Senior Independent Director. He chairs their separate
meetings and acts as their spokesman. The Senior Independent
Director is consulted by the Chairmen on the agenda and
arrangements for Board Meetings. He is also, in appropriate
cases, a point of contact for shareholders and other stakeholders.
The Boards plan to make Bertrand Collomb Vice-Chairman of NV
and PLC in 2005.
Our Non-Executive Directors are engaged by resolutions of the
Boards, normally for an initial term of three to four years and
thereafter for terms of three years. Their terms of engagement
are subject to their renomination by the Boards and their re-
election by shareholders each year.
Non-Executive Directors normally serve for no more than three
terms of three years each, although exceptions are made if there
are good reasons.
The remuneration of the Non-Executive Directors is determined
by the Boards, within the overall limit set by the shareholders, and
it is reported on pages 86 and 87. All engagements and
nominations are based on the recommendations of the
Nomination Committee, and re-engagements and renominations
are subject to continued good performance.
Full details of the engagement of our Non-Executive Directors can be
seen on the Unilever website at www.unilever.com/ourcompany/
investorcentre/. The profile set by the Boards for the
Non-Executive Directors and the chart used for orderly
succession planning can also be seen there.
Our definition of ‘independence’ for Directors is set out in ‘The
Governance of Unilever’, which can be seen on the Unilever
website at www.unilever.com/ourcompany/investorcentre/. It is
derived from the applicable definitions in use in the Netherlands,
UK and US. All our current Non-Executive Directors are considered
to be independent of Unilever. Our Boards reached this
conclusion after conducting a thorough review of all relevant
relationships the Non-Executive Directors, or their related or
connected persons, have with NV or PLC.
A number of relationships, such as non-executive directorships,
exist between several of our Non-Executive Directors and
companies that provide banking, insurance or financial advisory
services to Unilever. Our Boards considered in each case the
number of other companies that also provide or could readily
provide such services to Unilever, the significance to those
companies of the services they provide to Unilever, the roles of
the Non-Executive Directors within those companies and the
significance of that role to our Director. It concluded that none of
these relationships threaten the independence of the Non-
Executive Directors concerned.
In addition, the Boards have satisfied themselves that Lord
Brittan’s position at UBS Investment Bank did not involve him
in any way in its broking relationship with Unilever. They had
noted that Lady Chalker’s involvement in consultancy services for
Unilever, as reported in last year’s Annual Report and Accounts,
had been terminated before she was elected a Non-Executive
Director. The Boards have formed the view that the fact that both
Professor Dik and Mr Burgmans are non-executive directors of
ABN-AMRO was not material.
At a period of change our Boards wish to benefit from the
continuity that would be provided by Bertrand Collomb
continuing into a fourth term of three years. After careful
consideration, they have concluded that this should not prevent
him from continuing to be regarded as independent. This opinion
was supported by his subsequent selection by our Non-Executive
Directors as their Senior Independent Director.
Similarly, given that Claudio Gonzalez will retire in 2005 because
of the pressure of his other commitments, the Boards have
welcomed Oscar Fanjul’s preparedness to continue for a tenth
year. This provides continuity on the Audit Committee. The
Boards have re-affirmed their judgement that he remains
independent.
None of our Non-Executive Directors is elected or appointed
under any arrangement or understanding.