Unilever 2005 Annual Report Download - page 43

40 Unilever Annual Report and Accounts 2005
Corporate governance
(continued)
Directors – Various formal matters
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 approval of shareholders by 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. However,
the remuneration arrangements applicable to our Executive
Directors require our Executive Directors to build and retain a
personal shareholding in Unilever equal to at least 150% of their
annual base pay.
Directors – Indemnification
Directors’ indemnification, including the terms thereof, is provided
for in article 19 of NV’s Articles of Association.
The power to indemnify directors is provided for in PLC’s Articles
of Association. Deeds of indemnity were issued to all PLC
Directors during 2005.
Appropriate Directors’ and Officers’ liability insurance is in place
for all Unilever Directors.
Directors – Conflicts of interest
We attach special importance to avoiding conflicts of interest
between NV and PLC and their Directors. In the case of a conflict
of interest between NV and PLC and any of our Directors, all
applicable laws, regulations and corporate governance codes are
complied with. Conflicts of interest are not understood to include
transactions and other activities involving companies in the
Unilever Group.
Directors are not permitted to take part in any discussion or
decision-making that involves a subject or transaction in relation
to which they have a conflict of interest with the company. All
transactions in which there are conflicts of interest with Directors
must be agreed on terms that are customary in the sector
concerned.
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. In 2005 no conflict of
interests transactions took place between the Directors and NV
and PLC.
Shareholder matters
Relations with shareholders and other investors
We believe it is important both to explain our business
developments and financial results to investors and to understand
their objectives.
The Chief Financial Officer has lead responsibility for investor
relations, with the active involvement of the Group Chief
Executive. They are supported by our 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.
The Boards are regularly briefed on reactions to the quarterly
results announcements. They, or the relevant Board Committee,
are briefed on any issues raised by shareholders that are relevant
to their responsibilities.
Our shareholders can, and do, raise issues directly with the
relevant Executive Director or the Chairman and, if appropriate,
a relevant Non-Executive Director or the Senior Independent
Director.
Both NV and PLC communicate with their respective shareholders
through the AGMs as well as responding to their questions and
enquiries during the course of the year. We take the views of our
shareholders into account and, in accordance with all applicable
legislation and regulations, may consult them in an appropriate
way before putting major new proposals at our AGMs.
General Meetings of shareholders
The business to be conducted at the AGMs of NV and PLC is set
out in the separate Notices of AGM for NV and PLC. It includes
appointment of Directors, declaration/approval of final dividend,
appointment of external auditors, approval of changes to the
Articles of Association, and authorisation for the Boards to allot
and repurchase shares, and to restrict pre-emptive rights of
shareholders.
General Meetings of shareholders of NV and PLC are held at
times and places decided by our Boards. NV meetings are held in
Rotterdam and PLC meetings are held in London on consecutive
days. The notices calling the meeting normally go out more than
thirty days prior to the meetings and include further information
on how to gain access to the AGMs and how to vote by proxy.
At the AGMs, a full account is given of the progress of the
business over the last year and there is a review of current issues.
Shareholders are encouraged to attend the meetings and ask
questions, and the question-and-answer sessions form an
important part of the meetings in both Rotterdam and London.
We welcome our external auditors to the AGMs and they are
entitled to address the meetings.