Unilever 2010 Annual Report Download - page 48

Unilever Annual Report and Accounts 2010 45
Report of the Directors Governance
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.
Role and Responsibilities
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 for their
independence. They form the Audit Committee, the Nomination
Committee, the Remuneration Committee and the Corporate
Responsibility and Reputation Committee, and the roles and
membership of these Board committees are described below.
In consultation with the Nomination Committee, the Boards
review both the adequacy of succession planning processes
and succession planning itself at both Board and UExlevel.
The profile set by the Boards for the Non-Executive Directors
provides guiding principles for the composition of the Unilever
Boards in line with the recommendations of applicable
governance regulations and best practice, and takes into
accountthe balance of skills, knowledge and experience
ontheBoards. 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
to consider specific agenda items and wide-ranging business
matters of relevance to the Group. In 2010 they met 5 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.
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’, and is derived from the applicable
definitions in use in the Netherlands, the UKand the US.
The UK Combined Code 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 six years
should be subject to particularly rigorous review, and if more than
nine years should be subject to annual re-election. However, it is
Unilever’s standard practice for all Directors to seek re-election
annually.
Following the conclusion of a thorough review of all relevant
relationships of the Non-Executive Directors, and their related or
connected persons, our Boards consider all of our Non-Executive
Directors to be independent of Unilever. 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.
The Boards concluded that none of these relationships impact
theindependence of the Non-Executive Directors concerned,
andhave satisfied themselves that the services provided by
Barloworld Limited, of which Hixonia Nyasulu is a director,
toUnilever South Africa is not material. The Boards also gave
special consideration to the position of Jeroen van der Veer
following his appointment as supervisory director of ING Group,
holder of a large number of preference shares in NV and with
whom Unilever has a commercial relationship. The Boards
concluded that Mr van der Veer continues to demonstrate the
essential characteristics of independence.
None of our Non-Executive Directors are elected or appointed
under any arrangement or understanding with any major
shareholder, customer, supplier or otherwise.
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 is reported on page 67. 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.
Tenure
Our Non-Executive Directors submit themselves for re-election
each year at the AGMs. Although the Dutch Corporate
Governance Code sets the suggested length of tenure at a
maximum of twelve years for Non-Executive Directors, they
normally serve for a maximum of nine years in accordance
withthe UK Combined Code. 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re-appointment.