Unilever 2010 Annual Report Download - page 40

Unilever Annual Report and Accounts 2010 37
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.
There is a Code Policy on legal consultation which sets out our
commitment to complying with laws and regulations of the countries
in which we operate and the specific activities and processes for
which employees must seek the agreement of internal legal counsel
in advance of making a commitment. In specialist areas the relevant
teams at global, regional or local level are responsible for setting
detailed standards 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.
Integration of acquisitions, restructuring and change
management
• M&A integration
• Delivering major restructuring projects effectively
Since 2009, Unilever has announced €4.6 billion of acquisitions and
ourglobal and regional restructuring programmes will continue in
2011. 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 M&A and significant global and regional restructuring projects
are sponsored by a Unilever Executive member. Regular progress
updates are provided to the Unilever Executive.
Sound project disciplines are used in all M&A and restructuring
projects: 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, environmental, political, social and
terrorism risks within the environments in which we operate, failure to
complete planned divestments, taxation risks, failure to resolve
insurance matters within current estimates and changing priorities of
our boards of directors. 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.