Unilever 2004 Annual Report Download - page 60

Unilever Annual Report and Accounts 2004 57
Corporate governance
(continued)
Management Committees
The Boards and the Board Committees are assisted by the
following Management Committees. All these Management
Committees have been formally set up by resolutions of the
Executive Committee with carefully defined remits and they report
regularly.
Code of Business Principles Compliance Committee
This Committee is responsible for monitoring and reporting on
compliance with the Code of Business Principles. Our Joint
Secretaries are responsible for the operation of this Committee.
The other members of the Committee are the Chief Auditor,
Senior Vice President Human Resources Management
Development and Head of Corporate Relations Department. The
Committee meets quarterly, and has reported regularly to the
Executive Committee, the Audit Committee and to the Boards.
Corporate Risk Committee
Unilever’s system of risk management is outlined on page 92.
Responsibility for establishing a coherent framework for the
Group to manage risk resides with the Corporate Risk Committee.
The objective of the Committee is to assist the Boards to carry out
their responsibilities to ensure effective risk management and
systems of control. It has reported to the Executive Committee
and, as relevant, to the Audit Committee. The Committee is
supplied with information by the Controller. The Committee
currently comprises the Financial Director, the Foods Director, the
Home and Personal Care Director, the Personnel Director, the
General Counsel, the Chief Auditor and the Controller. It meets at
least four times a year.
The specific responsibilities of the Committee are, currently,
as follows:
• Identification of risks of Corporate significance, communicating
them to Divisions, Business Groups and Corporate
Departments, and ensuring progress on action plans to address
the identified risks.
• Monitoring completeness of the annual Positive Assurance
process, reviewing the Positive Assurance returns from
Divisions, Business Groups and Corporate Departments and
reporting on them to the Boards to assist in their assessment of
the effectiveness of risk management and internal control. The
Positive Assurance process comprises the Business Risk
Assessment, confirmation of compliance with the Code of
Business Principles and Corporate Policies and the Operational
Controls Assessment.
• Oversight of Division and Business Group Risk Committees,
including ensuring that progress is made on action plans
reported to the Corporate Risk Committee as part of the
annual Positive Assurance return.
Disclosures Committee
This Committee is responsible for helping the Boards ensure that
financial and other information that ought to be disclosed publicly
is disclosed in a timely manner and that the information that is
disclosed is complete and accurate. The Committee comprises our
Joint Secretaries, Treasurer and Controller, who is responsible for
the operation of this Committee.
Investment Review Committee
This Committee’s remit covers the financing and investment
aspects of our pension funds. It also sets the policies for the
management of the inherent risks in the financing and investment
aspects of our pension plans and oversees compliance with these
policies. The Committee is the responsibility of the Financial
Director and, in addition, comprises our Head of Corporate
Pensions, Personnel Director, Treasurer and General Counsel.
Routine Business Committees
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 our Boards or the
Executive Committee. The Joint Secretaries are responsible for the
operation of these committees.
Directors – various formal matters
In the case of a conflict of interest between Unilever and any of
our Directors, all applicable laws, regulations and corporate
governance codes are complied with. As a formal matter, under
Dutch law Directors are able to vote on transactions in which they
are materially interested so long as they are acting in good faith.
In general, PLC Directors cannot vote in respect of contracts in
which they know they are materially interested, unless, for
example, their interest is shared with other shareholders and
employees.
The borrowing powers of NV Directors on behalf of NV are not
limited by the Articles of Association of NV. PLC Directors have
the power to borrow on behalf of PLC up to three times the
Adjusted Capital and Reserves of PLC, as defined in its Articles of
Association, without the sanction of an ordinary resolution.
The Articles of Association of NV and PLC do not require Directors
of NV or Directors of PLC to hold shares in NV or PLC. The
remuneration arrangements applicable to our Executive Directors
contain requirements for the holding and retention of shares (see
the Remuneration report on page 72).
Other executive officers
Our executive officers, other than the Executive Directors, are also
full-time employees and appointed for an indefinite period. These
other executive officers are the corporate officers listed on page 69.
None of our other executive officers are elected or appointed
under any arrangement or understanding.
Nominations to the Boards
In order to try to ensure that NV and PLC have the same
Directors, only the holders of NV’s special shares (see page 132)
can nominate candidates for election to the NV Board, and only
the holders of PLC’s deferred stock (see page 132) can nominate
candidates for election to the PLC Board.