Unilever 2004 Annual Report Download - page 67

Audit Committee
The responsibilities and powers of the Audit Committee are set
out on pages 56 and 90 and are fully aligned with the
requirements in the UK and US. They also encompass the most
important of the duties and responsibilities referred to in the
Dutch Code. The exceptions are supervision over the financing of
the Company, tax planning and the application of information
and communication technology (bpp III.5.4), where our Audit
Committee assists the Board in fulfilling its oversight
responsibilities.
Depositary receipts for shares
The arrangements of Nedamtrust are to a large extent compliant
with the Dutch Code. See page 61. However, Nedamtrust is a
public limited liability company (naamloze vennootschap) instead
of a foundation (stichting), meaning that its directors are not
appointed by co-optation, as the Dutch Code recommends, but
by its shareholders. Nedamtrust does not generally hold meetings
of holders of depositary receipts and there are no formal rules
relating to the influence of holders of depositary receipts on the
composition of Nedamtrust’s board (bpp IV.2.1-3).
In 2005 a proposal will be submitted to the holders of
Nedamtrust certificates that the administration of the shares
be transferred to a newly established foundation, Stichting
Administratiekantoor Unilever N.V. (‘the Foundation’), whose
directors will appoint themselves. Nedamtrust will convene a
meeting of certificate holders at which they will be asked to
approve this transfer. More information is given in the notice
for this meeting (see www.unilever.com/ourcompany/
investorcentre/shareholder_holderinfo/).
The new arrangements are intended to make the Foundation
compliant with the Dutch Code.
Provision of information
We consider it important to comply with all applicable statutory
regulations on the equal treatment of shareholders and provision
of information and communication with shareholders and other
parties (P IV.2 and P IV.3). In the communications between us and
our shareholders and other parties, we comply with all applicable
legislation and regulations.
Meetings of analysts and presentations to investors
We have extensive procedures for handling relations with and
communicating with shareholders, investors, analysts and the
media (see description on page 58). Whilst the important
presentations and meetings are conducted in accordance with
bpp IV.3.1, due to the large number of such presentations and
meetings and overlap in information, some of the less important
ones are not announced in advance, made accessible to everyone
or put on our website.
Requirements – the United Kingdom
PLC is required, as a company that is incorporated in the United
Kingdom and listed on the London Stock Exchange, to state how
it has applied the principles and how far it has complied with the
provisions set out in Section 1 of the Combined Code issued in
1998, as revised in 2003 (‘the Combined Code’), appended to the
United Kingdom Listing Rules.
In the preceding pages we have complied with the requirement to
report on how we apply the Principles (‘P’) and provisions (‘pn’) in
the Combined Code.
With reference to P A.2, as already explained on page 62, the
principal tenet of Unilever’s governance philosophy that the most
senior roles in NV and PLC are shared has hitherto found its
expression in two people who each combine the roles of
Chairman and Chief Executive. This carefully balanced
arrangement has served our unique constitutional arrangements
well for many years but, as already indicated, will be changed in
2005 by separating the two roles.
As already indicated, in order to develop our arrangements
further in line with current best practice, we created in May
2004 the position of Senior Independent Director (pn A.3.3).
This gives leadership to the Independent Non-Executives, who
are a majority on our Boards. In 2005 the Senior Independent
Director will be made Vice-Chairman of NV and PLC.
It will be appreciated that, prior to the election of Non-Executive
Directors to our Boards in May 2004, our previous Board
arrangements, involving Executive Directors and Advisory
Directors, met the spirit but not the letter of P A.1 and P A.3.
Given that the current arrangements have only been in place for a
limited period, some aspects are still evolving. As will be seen, the
arrangements for performance evaluation (page 54) during 2004
might not be regarded as being as extensive as P A.6
recommends. Also, there have not yet been appropriate occasions
for the Senior Independent Director and other Non-Executive
Directors to meet major shareholders (page 58) in the manner
anticipated by P D.1.
Members of our Audit, Remuneration and Nomination
Committees will be available to answer questions at the Annual
General Meetings of both NV and PLC. The members attending
each meeting do not necessarily include the Chairman of the
Committee, since these meetings have hitherto taken place at
about the same time in Rotterdam and London respectively
(pn D.2.3). We plan to change this practice in future.
Requirements – the United States
Both NV and PLC are listed on the New York Stock Exchange and
must therefore comply with such of the requirements of US
legislation, such as the Sarbanes-Oxley Act of 2002, regulations
enacted under US securities laws and the Listing Standards of The
New York Stock Exchange as are applicable to foreign private
issuers. In some cases the requirements are mandatory and in
other cases the obligation is to ’comply or explain’.
We have complied with the requirements concerning corporate
governance that were in force during 2004. Attention is drawn in
particular to the remit of the Audit Committee on page 56 and
the Report of the Audit Committee on page 90.
Actions already taken to ensure compliance that are not
specifically disclosed elsewhere or otherwise clear from reading
this document include:
64 Unilever Annual Report and Accounts 2004
Corporate governance
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