Unilever 2008 Annual Report Download - page 50

Unilever Annual Report and Accounts 2008 47
Report of the Directors
Corporate governance continued
Outside Appointments
Unilever recognises the benefit to the individual and to the Group
of involvement by Unilever Executives acting as directors of other
companies outside the Unilever Group, broadening their
experience and knowledge. The number of outside directorships
of listed companies is generally limited to one per individual. In
the case of publicly listed companies approval is required from the
Chairman. Outside directorships must not involve an excessive
commitment or conflict of interest. Unilever Executives must at all
times ensure that their time commitment to Unilever takes
precedence over any outside directorship. Fees paid in connection
with an outside directorship may be retained by the individual,
reflecting that any outside directorship is for the responsibility of
the individual and that Unilever takes no responsibility in this
regard.
Non-Executive Directors
The Non-Executive Directors share responsibility for the execution
of the Boards’ duties, taking into account their specific
responsibilities, which are essentially supervisory. In particular,
they comprise the principal external presence in the governance
of Unilever, and provide a strong independent element. See
pages 18 and 19 for their biographies.
Role and Responsibility
The key elements of the role and responsibilities of our Non-
Executive Directors are:
• supervision of and advice to the Chief Executive Officer;
• developing strategy with the Chief Executive Officer;
• scrutiny of performance of the business and Chief Executive
Officer;
• oversight of risks and 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 form the Audit Committee, the Nomination
Committee, the Remuneration Committee and the Corporate
Responsibility and Reputation Committee. The roles and
membership of these key Board committees are described
on pages 48 and 49. The profile set by the Boards for the
Non-Executive Directors and the schedule used for orderly
succession planning can be found on our website at
www.unilever.com/investorrelations/corp_governance
Meetings
The Non-Executive Directors meet as a group, without the
Executive Directors present, under the leadership of the
Chairman. In 2008 they met five times. In addition, the Non-
Executive Directors (including the Chairman) usually meet before
each Board meeting with the Chief Executive Officer, the Chief
Financial Officer, other senior executives and the Group Secretary.
Senior Independent Director
Our Non-Executive Directors have appointed David Simon as
Senior Independent Director. He acts as their spokesman. The
Senior Independent Director is consulted by the Chairman on
the agenda and arrangements for Board meetings. He is also,
in appropriate cases, a point of contact for shareholders and
other stakeholders. Upon David’s retirement, it is intended that he
will be succeeded by Jeroen van der Veer, with effect from the
conclusion of the 2009 AGMs.
Tenure
Our Non-Executive Directors submit themselves for re-election
each year at the AGMs. Their nomination for re-election is subject
to continued good performance which is evaluated by the Boards,
based on the recommendations of the Nomination Committee.
The Nomination Committee carefully considers each nomination
for reappointment. The Non-Executive Directors normally serve for
a maximum of nine years.
Remuneration
The remuneration of the Non-Executive Directors is determined by
the Boards, within the overall limit set by the shareholders at the
AGMs in 2007, and it is reported on page 72. We do not grant
our Non-Executive Directors any personal loans or guarantees nor
are they entitled to any severance payments. Details of the
engagement of our Non-Executive Directors can be seen on the
Unilever website at
www.unilever.com/investorrelations/corp_governance
Other appointments
Non-Executive Directors may serve on boards of other companies,
provided such service does not involve a conflict of interest or
restrict their ability to discharge their duties to Unilever.
Independence
Taking into account the role of Non-Executive Directors, which is
essentially supervisory, and the fact that they make up the key
Committees of the Boards, it is important that our Non-Executive
Directors can be considered to be independent.
Our definition of independence for Directors is set out in the
document entitled ‘The Governance of Unilever’. It is derived from
the applicable definitions in use in the Netherlands, the UK and
the 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 of
the Non-Executive Directors, and their related or connected
persons. Leon Brittan has served on the Boards since 2000. The
length of tenure under the Dutch Corporate Governance Code is
set at a maximum of twelve years for non-executive directors.
However, the UK Combined Code on Corporate Governance
suggests that length of tenure is a factor to consider when
determining independence of a non-executive director. The UK
Combined Code also provides that a non-executive director who
serves more than nine years should be subject to annual re-
election and subject to particularly rigorous review. It is our
standard practice for all Directors to seek re-election annually.
Moreover, our annual performance review has concluded that