Unilever 2008 Annual Report Download - page 78

Unilever Annual Report and Accounts 2008 75
Report of the Directors
Report of the Corporate Responsibility and Reputation Committee
Terms of reference
The Corporate Responsibility and Reputation Committee oversees
Unilever's conduct as a responsible multinational business. It is
also charged with ensuring that Unilever’s reputation is protected
and enhanced. Inherent in this is the need to identify any external
developments which are likely to have an influence upon
Unilever’s standing in society and to bring these to the attention
of the UEx.
The Committee comprises three independent Non-Executive
Directors: Leon Brittan (Chairman), Hixonia Nyasulu and Narayana
Murthy. In 2008 two members of the Committee stood down:
Executive Director Ralph Kugler, who retired from Unilever in May,
and Geneviève Berger, who stepped down as a Non-Executive
Director to join the Unilever Executive in July.
To ensure it maintains a strategic overview of current and
emerging sustainability issues, the Committee benefits from the
insights of the Unilever Sustainable Development Group (USDG) –
a body of five experts who advise on Unilever’s sustainability
strategy. A multi-functional group of senior leaders from across
the business (the Corporate Responsibility, Issues, Sustainability
and Partnerships group – CRISP) also provides input to the
Committee’s discussions. Both groups are chaired by the President
Foods, Home and Personal Care and member of the Unilever
Executive, Vindi Banga.
The Corporate Responsibility and Reputation Committee’s terms
of reference and details of the Unilever Sustainable Development
Group are available on our website at
www.unilever.com/investorrelations/corp_governance
Meetings
As part of its watching brief on current issues of concern to
society, the Committee reviewed a range of topics in 2008.
Amongst these were: Unilever’s approach to animal testing; the
emerging science of nanotechnology; sustainable farming;
melamine contamination in products containing Chinese milk; the
Group’s operations in Zimbabwe and the Occupied Territories; and
competition-related issues. Subjects that received particular
scrutiny are listed below.
Business risk
Committee members reviewed Unilever’s process for assessing
business risk, focusing on how current and future risks are
identified and fed into management and business planning.
Code of Business Principles
Unilever’s Code of Business Principles sets out the standards of
conduct to which we expect our employees to adhere. In 2008
Unilever strengthened its management of the Code by appointing
a new full-time Global Code Officer. Priorities for the new role
include building a network of country code officers, improving
training and developing and sharing best practice. A new online
training module on the Code was piloted in 2008. The
Committee endorsed these actions as they are key in ensuring
that Unilever’s standards of conduct are well understood and
enforced effectively. The new Global Code Officer attended a
meeting of the Committee shortly after taking up his
appointment and reported on his plans and initial impressions.
Business Partner Code
Unilever’s Business Partner Code sets the standards that we expect
of suppliers in areas such as health and safety at work, business
integrity, respect for labour standards, consumer safety and
safeguarding the environment. Unilever’s supply management
function is responsible for the roll-out of the Business Partner
Code and for gaining supplier assurance.
As this is an important area of risk and reputation management,
the Committee emphasised the need for detailed standards and
strong governance. In 2008, a programme of audits was piloted
to assess compliance with the Code. These pilots were used to
inform the development of a new supplier assurance policy
setting out operational practices and standards to deliver the
Code’s commitments. Governance is via the Corporate Code
Committee which oversees the operation of both the Business
Partner Code and the Code of Business Principles.
See www.unilever.com/investorrelations/corp_governance for the
full text of the Code of Business Principles and Business Partner
Code.
Labour standards
Between 2006 and 2008, four complaints have been brought to
Unilever’s attention by the International Union of Food Workers
(IUF) and the transport union TUMTIS. These concern site closure,
freedom of association, collective bargaining and the use of
temporary and contracted labour at our factories in India and
Pakistan and a supplier’s factory in Turkey. Under the terms of the
OECD’s Guidelines for Multinational Enterprises, the unions have
referred their complaints to the OECD’s national contact points in
the UK and Turkey for investigation. Unilever is seeking local
resolution to these issues as well as co-operating fully with the
OECD process.
Committee members stressed the need for active management of
these matters. The UEx has agreed a set of procedures and the
appointment of a senior manager to address these complaints
more rapidly. Unilever is also reviewing its policies and practices to
ensure that it continues to act within the law, as well as
upholding the UN Global Compact’s principles on human and
labour rights and following the OECD Guidelines for Multinational
Enterprises. The Committee decided to give high priority to the
monitoring of these developments.