Unilever 2009 Annual Report Download - page 37

Outlook and risks (continued)
34 Unilever Annual Report and Accounts 2009
Report of the Directors About Unilever
Description of risk What we are doing to manage the risk
People and talent
• Attracting, developing and retaining a skilled workforce to
build and maintain a fit-for-purpose organisation
Attracting, developing and retaining talented employees is essential
to the delivery of our strategy. If we fail to determine the
appropriate mix of skills required to implement our strategy and
subsequently fail to recruit or develop the right number of
appropriately qualified people, or if there are high levels of staff
turnover, this could adversely affect our ability to operate
successfully, and hence grow our business and effectively compete
in the marketplace.
Resource Committees have been established and implemented
throughout our business. These committees have responsibility for
identifying future skills and capability needs, defining career paths
and professional training programmes, benchmarking the elements
of reward structures, both short- and long-term, and identifying the
key talent and leaders of the future. Regular internal surveys are
conducted to gauge employee views and obtain feedback.
We have an integrated management development process which
includes regular performance review, underpinned by a common set
of ‘Standards of Leadership’ behaviours, skills and competency
profiling, mentoring, coaching and training.
Legal and regulatory
• Complying with and anticipating new legal and regulatory
requirements
Unilever is subject to local, regional and global rules, laws and
regulations, covering such diverse areas as product safety, product
claims, trademarks, copyright, patents, employee health and safety,
the environment, corporate governance, listing and disclosure,
employment and taxes. Important regulatory bodies in respect of
our business include the European Commission and the US Food
and Drug Administration. Failure to comply with laws and
regulations could leave Unilever open to civil and/or criminal legal
challenge and, if upheld, fines or imprisonment imposed on us or
our employees. Further, our reputation could be significantly
damaged by adverse publicity relating to such a breach of laws or
regulations and such damage could extend beyond a single
geography.
Specialists or specialist teams at global, regional and local level are
responsible for setting policies and ensuring that all employees are
aware and comply with regulations and laws specific and relevant
to their roles. Internal competition law compliance procedures and
training are reinforced and enhanced on an ongoing basis. There is
a Legal Policy which sets out the specific activities and processes for
which employees must seek the agreement of internal legal counsel
in advance of making a commitment.
Restructuring and change management
• Delivering major restructuring projects effectively
In recent years Unilever has launched global and regional
restructuring programmes to help simplify our organisational
structure, leverage common platforms, realise benefits from our
regional and global scale and outsource business processes.
Implementation of such programmes requires significant effort and
attention from management and employees to complete to the
agreed timescale and realise the anticipated benefits. In the event
that we are unable to successfully implement these changes in a
timely manner or at all, or effectively manage third-party
relationships and/or outsourced processes, we may not be able to
realise some or all of the anticipated expense reductions. In
addition, because some of the restructuring changes involve
important functions, any disruption could harm the operations of
our business, our reputation and/or relationship with our
employees.
All significant global and regional restructuring projects are
approved by the Unilever Executive and sponsored by a Unilever
Executive member. Regular updates are provided to the Unilever
Executive.
Sound project disciplines are used in executing restructuring
projects including: clearly articulated project objectives, scope and
deliverables; an approved and properly authorised business case
updated over time as necessary; detailed and up-to-date project
planning; resourcing by appropriately qualified personnel; an
effective communication and change management plan; and
proper closure, where learnings are captured and disseminated.
Other risks
Unilever is exposed to varying degrees of risk and uncertainty
related to other factors including physical risks, legislative,
environmental, fiscal, tax and regulatory developments, legal
matters, insurance and resolution of such pending matters within
current estimates, our ability to integrate acquisitions and complete
planned divestitures, terrorism and economic, political and social
conditions in the environments where we operate and new or
changed priorities of the Boards. All these risks could materially
affect the Group’s business, our turnover, operating profits, net
profits, net assets and liquidity. There may be risks which are
unknown to Unilever or which are currently believed to be
immaterial.