Unilever 2010 Annual Report Download - page 56

Unilever Annual Report and Accounts 2010 53
Report of the Directors Governance
Severance pay
It is our policy to set the level of severance payments for Directors
at no more than one year’s salary, unless the NV Board, at the
proposal of the Remuneration Committee, finds this manifestly
unreasonable given circumstances or unless otherwise dictated
byapplicable law (bpp II.2.8).
Conflicts of interest
In the event of a potential conflict of interest, the provisions
ofthe Dutch Code (Principles II.3 and III.6) are applied. Conflicts
of interest are not understood to include transactions and other
activities between companies in the Unilever Group.
Financing preference shares
NV issued 4%, 6% and 7% cumulative preference shares
between 1927 and 1970. Their voting rights are based on
theirnominal value, as prescribed by Dutch law. The Dutch
Coderecommends that the voting rights on such shares should,
in any event when they are newly issued, be based on their
economic value rather than on their nominal value (bpp IV.1.2).
NV agrees with this principle but cannot unilaterally reduce
votingrights of its outstanding preference shares.
Following the approval by the NV shareholders during the NV
AGM on 11 May 2010 to reduce the capital with regard to
the4% cumulative preference shares against repayment and
amendment of the Articles of Association, the 4% cumulative
preference shares were cancelled by way of an amendment of
the NV Articles of Association, effective 9 August 2010.
Anti-takeover constructions and control over the company
NV confirms that it has no anti-takeover constructions, in the
sense of constructions that are intended solely, or primarily,
toblock future hostile public offers for its shares (bpp IV.3.11).
Nor does NV have any constructions whose specific purpose is
toprevent a bidder, after acquiring 75% of the capital, from
appointing or dismissing members of the Board and subsequently
altering the Articles of Association. The acquisition through a
public offer of a majority of the shares in a company does not
under Dutch law preclude in all circumstances the continued
rightof the board of the company to exercise its powers.
Provision of information
We consider it important to comply with all applicable statutory
regulations on the equal treatment of shareholders and provision
of information and communication with shareholders and other
parties (Principles IV.2 and IV.3).
Meetings of analysts and presentations to investors
We have extensive procedures for handling relations with
andcommunicating with shareholders, investors, analysts
andthe media (also see page 49). The important presentations
and meetings are conducted as far as practicable in accordance
with the Dutch Code (bpp IV.3.1). Due to their large number and
overlap in information, however, some of the less important ones
are not announced in advance, made accessible to everyone
orput on our website.
Corporate Governance Statement
NV is required to make a statement concerning corporate
governance as referred to in article 2a of the decree on
additional requirements for annual reports (Vaststellingsbesluit
nadere voorschriften inhoud jaarverslag) with effect from
1January 2010 (the ‘Decree’). The information required to be
included in this corporate governance statement as described
inarticles 3, 3a and 3b of the Decree can be found in the
following sections of this report:
• the information concerning compliance with the Dutch
Corporate Governance Code, as required by article 3 of the
Decree, can be found under ‘Corporate Governance’ within
the section ‘Requirements – the Netherlands’ in this report;
• the information concerning Unilever’s risk management and
control frameworks relating to the financial reporting process,
as required by article 3a(a) of the Decree, can be found under
‘Outlook and risks’ on pages 33 to 39 and within the relevant
sections under ‘Corporate Governance’ in this report;
• the information regarding the functioning of NV’s General
Meeting of shareholders, and the authority and rights of NV’s
shareholders, as required by article 3a(b) of the Decree, can
befound within the relevant sections under ‘Corporate
Governance’ in this report;
• the information regarding the composition and functioning
ofNV’s Board and its Committees, as required by article 3a(c)
of the Decree, can be found within the relevant sections
under‘Corporate Governance’ in this report; and
• the information concerning the inclusion of the information
required by the decree Article 10 European Takeover Directive,
as required by article 3b of the Decree, can be found within
the relevant sections under ‘Corporate Governance’ and
within the section ‘Shareholder information, Analysis of
shareholding’ in this report.