Unilever 2008 Annual Report Download - page 48

Unilever Annual Report and Accounts 2008 45
Report of the Directors
Corporate governance continued
Appointment of Directors
Directors are normally appointed by shareholders at the AGMs.
In order to facilitate the transition from Patrick Cescau to Paul
Polman, Paul was appointed as an Executive Director at separately
convened shareholder meetings of PLC and NV held on 28 and
29 October 2008 respectively. All existing Directors, unless they
are retiring, submit themselves for re-election every year and
shareholders can remove any of them by a simple majority vote.
For a list of our current Directors and the periods during which
they have served as such, please see pages 18 and 19.
In order to seek to ensure that NV and PLC have the same
Directors, the Articles of Association of NV and PLC contain
provisions which are designed to ensure that both NV and PLC
shareholders are presented with the same candidates for election
as Directors. This is achieved through a nomination procedure
operated by the Boards of NV and PLC through Unilever’s
Nomination Committee.
Based on the evaluation of the Boards, its Committees and its
individual members, the Nomination Committee recommends to
the Boards a list of candidates for nomination at the AGMs of
both NV and PLC. In addition, since 2006 shareholders of the
companies have been able to nominate Directors and to do so
they must put a resolution to both meetings in line with local
requirements. In order to ensure that the Boards remain identical,
anyone being elected as a Director of NV must also be elected as
a Director of PLC and vice versa. If an individual fails to be elected
to both companies then he or she will be unable to take their
place on the Boards.
The provisions in the Articles of Association for appointing
Directors cannot be changed without the permission, in the case
of NV, of the holders of the special ordinary shares numbered
1 - 2400 inclusive and, in the case of PLC, of the holders of
PLC's deferred stock. The NV special ordinary shares may only be
transferred to one or more other holders of such shares. The
joint holders of both the NV special ordinary shares and the
PLC deferred stock are N.V. Elma and United Holdings Limited,
which are joint subsidiaries of NV and PLC. The boards of N.V.
Elma and United Holdings Limited comprise the members of the
Nomination Committee. The Nomination Committee comprises
Non-Executive Directors of Unilever only.
Board meetings
Our Boards meet at least seven times a year to consider important
corporate events and actions, such as:
• approval of corporate strategy;
• approval of the corporate Annual Plan;
• oversight of the performance of the business;
• review of risks and controls;
• authorisation of major transactions;
• preparation of the Annual Report and Accounts;
• declaration of dividends;
• agreement of quarterly results announcements;
• convening of shareholders’ meetings;
• nominations for Board appointments;
• approval of Board remuneration policy; and
• review of the functioning of the Boards and their Committees.
The following table shows the attendance of Directors at Board
meetings for the year ended 31 December 2008. If Directors are
unable to attend a meeting, they have the opportunity before the
meeting to discuss with the Chairman any agenda items or Board
papers:
Name Attendance
Michael Treschow 8 of 8
Patrick Cescau* (to 31 December 2008) 8 of 8
Paul Polman* (from 29 October 2008) 2 of 2
James Lawrence* (from 15 May 2008) 3 of 3
Kees van der Graaf* (to 15 May 2008) 3 of 3
Ralph Kugler* (to 15 May 2008) 3 of 3
Geneviève Berger (to 30 June 2008) 3 of 3
Leon Brittan 8 of 8
WimDik 8of8
Charles Golden 8 of 8
Byron Grote 8 of 8
Narayana Murthy 7 of 8
Hixonia Nyasulu 8 of 8
David Simon 8 of 8
Kees Storm 8 of 8
Jeroen van der Veer 6 of 8
Attendance is expressed as number of meetings attended out of
number eligible to attend.
*Executive Director
Board meetings are normally held either in London or Rotterdam,
with one or two off site Board meetings a year. The Chairman is
assisted by the Group Secretary, who ensures that the Boards are
supplied with all the information necessary for their deliberations.
The Chairman and the Group Secretary involve the Senior
Independent Director (see page 47) in the arrangements for Board
meetings.
Board induction and training
Upon election, Directors receive a comprehensive Directors’
Manual and are briefed thoroughly on their responsibilities and
our business. Updates on corporate governance developments
and investor relations matters are frequent agenda items at Board
meetings. Ongoing training is provided for Directors by way of
site visits, presentations, circulated updates, teach-ins at Board or
Board committee meetings on, among other things, Unilever’s
business, environmental, social and corporate governance,
regulatory developments and investor relations matters. In 2008,
Board meetings were held at the offices of Hindustan Unilever in
Mumbai which included a visit to local retail outlets and the
Bangalore Research and Development Centre and in Unilever’s
operations in New York which included trade visits and a visit to
the New Jersey Customer Insight and Innovation Centre.
Board evaluation
The evaluation process of our Boards consists of an internal three-
year cycle with an independent third-party evaluation carried out
if the Boards consider appropriate. The last time an independent
third-party evaluation was carried out was in 2006. In 2007 and