Unilever 2008 Annual Report Download - page 51

Corporate governance continued
48 Unilever Annual Report and Accounts 2008
Report of the Directors
Leon Brittan continues to demonstrate the essential characteristics
of independence expected by the Boards. His length of service,
and his resulting experience and knowledge of Unilever, is viewed
by the Boards as being especially valuable, particularly given the
extent of the changes to the Boards in recent years.
A number of relationships, such as non-executive directorships,
exist between various of our Non-Executive Directors and
companies that provide banking, insurance or financial advisory
services to Unilever. Our Boards considered in each case the
number of other companies that also provide or could readily
provide such services to Unilever, the significance to those
companies of the services they provide to Unilever, the roles
of the Non-Executive Directors within those companies and
the significance of those roles to our Non-Executive Directors.
It concluded that none of these relationships impact the
independence of the Non-Executive Directors concerned. The
Boards have formed the view that the fact that David Simon is a
senior adviser of Morgan Stanley International is not material. The
Boards have satisfied themselves that the services provided by
Paton Tupper Associates (Pty) Limited and Barloworld Limited, of
which Hixonia Nyasulu is a director and shareholder and director
respectively, to Unilever South Africa is not material. The Boards
further concluded that Narayana Murthy’s directorship of HSBC
Holdings plc, one of Unilever’s preferred banks, is not impacted by
the banking relationship and therefore that he should be
considered independent. The Boards have also satisfied
themselves that Leon Brittan’s position at UBS Investment Bank
and UBS Securities Company Limited does not involve him in any
way in its broking relationship with Unilever.
None of our Non-Executive Directors are elected or appointed
under any arrangement or understanding, either with any major
shareholder, customer, supplier or otherwise.
Committees
Board Committees
The Boards have established the committees described below, all
formally set up by Board resolutions with carefully defined remits.
They are made up solely of Non-Executive Directors and report
regularly to the Boards. For all committees, if Directors are unable
to attend a meeting, they are given the opportunity before the
meeting to discuss with the Chairman of the committee any
agenda items or committee papers. All committees are provided
with sufficient resources to undertake their duties. The terms of
reference for each committee can be found on our website at
www.unilever.com/investorrelations/corp_governance
Audit Committee
The Audit Committee is comprised only of independent Non-
Executive Directors with a minimum requirement of three such
members. It is chaired by Kees Storm, and its other members are
Wim Dik, Charles Golden and Byron Grote. The Boards have
satisfied themselves that all the current members of the Audit
Committee are competent in financial matters and have recent
and relevant experience and that, for the purposes of the US
Sarbanes-Oxley Act of 2002, Kees Storm is the Audit Committee’s
financial expert. The Audit Committee’s meetings are attended, by
invitation, by the Chief Financial Officer, the Chief Legal Officer,
the Group Controller, the Chief Auditor and our external auditors.
The Audit Committee assists the Boards in fulfilling their oversight
responsibilities in respect of the integrity of Unilever’s financial
statements; risk management and internal control arrangements;
compliance with legal and regulatory requirements; the
performance, qualifications and independence of the external
auditors; and the performance of the internal audit function. The
Audit Committee is directly responsible, subject to local laws
regarding shareholder approval, for the nomination,
compensation and oversight of the external auditors.
The Audit Committee is compliant with the rules regarding audit
committees applicable in the Netherlands, the UK and the US. The
Audit Committee is supplied with all information necessary for
the performance of its duties by the Chief Auditor, Chief Financial
Officer and Group Controller. Both the Chief Auditor and the
external auditors have direct access to the Audit Committee
separately from management.
The following table shows the attendance of Directors at Audit
Committee meetings for the year ended 31 December 2008:
Name Attendance
Kees Storm (Chairman) 6 of 6
WimDik 6of6
Charles Golden 6 of 6
Byron Grote 6 of 6
Attendance is expressed as number of meetings attended out of
number eligible to attend.
See page 74 for the Report of the Audit Committee to the
shareholders.
Nomination Committee
The Nomination Committee recommends to the Boards
candidates for the positions of Director. It also has responsibilities
for succession planning and oversight of corporate governance
matters. It is supplied with information by the Group Secretary.
The document entitled ‘The Governance of Unilever’ sets out that
the Nomination Committee comprises two independent Non-
Executive Directors and the Chairman. The Nomination
Committee is chaired by David Simon and its other members are
Michael Treschow and Jeroen van der Veer. Following David’s
retirement at the end of the 2009 AGMs, it is intended that
Jeroen van der Veer will succeed him as Chairman of the
Nomination Committee.
The following table shows the attendance of Directors at
Nomination Committee meetings for the year ended
31 December 2008:
Name Attendance
David Simon (Chairman) 6 of 6
Michael Treschow (from 6 February 2008) 5 of 5
Jeroen van der Veer 4 of 6
Attendance is expressed as number of meetings attended out of
number eligible to attend.
See page 59 for the Report of the Nomination Committee
to the shareholders.