Unilever 2010 Annual Report Download - page 61

58 Unilever Annual Report and Accounts 2010
Report of the Directors Governance
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. The Committee is also charged with ensuring that
Unilever’s reputation is protected and enhanced. A key element
of the role 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 Boards.
The Committee comprises three independent Non-Executive
Directors: Sir Malcolm Rifkind, Hixonia Nyasulu and Louise Fresco.
Two members of the Committee retired at the AGM in May
2010– Leon Brittan and Narayana Murthy. Sir Malcolm Rifkind
joined the Board at the AGM and succeeded Leon Brittan as
Chairman of the Committee.
In addition to the expertise that individual members bring
toUnilever, the Committee’s discussions are informed by the
perspectives of our two sustainability leadership groups. The first
is the Unilever Sustainable Development Group (USDG) – five
experts from outside the company who meet formally twice a
year to advise Unilever’s senior leadership on thedevelopment of
its sustainability strategy. The second is the Unilever Sustainable
Living Plan Steering Team, the group of senior executives who are
accountable for the delivery of the Plan (see below). Drawing on
the insights from these groups helps to keep the Boards informed
of current and emerging trends and any potential risks arising
from sustainability issues.
The Committee’s Terms of Reference are contained within ‘The
Governance of Unilever’ and are also available on our website at
www.unilever.com/investorrelations/corp_governance. Details of
the Unilever Sustainable Development Group are available on our
website at www.unilever.com.
Meetings
Meetings are held quarterly and ad hoc as required. The
Committee Chairman reports the conclusions to the Boards.
In 2010 the Committee reviewed a range of topics including:
Unilever’s Code of Business Principles and supporting corporate
policies; competition-related issues; nanotechnology; animal
testing; sensitive territories such as Zimbabwe; human rights;
labour relations; and particular elements of the Unilever
Sustainable Living Plan such as packaging and sustainable
agricultural sourcing as well as the development of the Plan itself.
Code of Business Principles and supporting policy review
The Committee is responsible for the oversight of the Unilever
Code of Business Principles which sets out the standards of
conduct we expect of our employees.
The Committee ensures that the Code remains fit for purpose
and is appropriately applied. Infringements of the Code are
monitored by the Committee. Inthis regard the Committee
complements the role of the Audit Committee which considers
the Code as part of its remit to review risk management.
A review of all corporate policies was undertaken in 2010. The
review was led by the Controller’s Department and formed part
ofthe ongoing work to simplify business processes across the
company. The previous 86 policies have been replaced by a
moreconcise framework of 26 Code Policies, such as the Unilever
Supplier Code and our Occupational Health and Safety Policy, that
complement and support the Code of Business Principles. More
detailed mandatory requirements in specialist areas have been
reclassified as Unilever Standards. The new Code Policies were
communicated to all senior managers and their review and
acknowledgement of these is underway. The communication and
training programme will be extended to all managers during 2011
and will include the development of new training and sign-off
systems.
The Committee followed the review during the course of the
yearand scrutinised a number of the revised policies. Members
welcomed the outcome of the review as it ensures that the
principles of the Code are embedded directly in Unilever policy
and the simplified processes give employees a better
understanding of Unilever’s standards and provide clarity as
towhere they will be held accountable.
Competition investigations
Pursuant to the remit of the Committee, the Boards have expressly
delegated to the Committee day-to-day oversight of the conduct
of Unilever’s response to the ongoing investigations by the
European Commission and other national authorities into alleged
infringements of competition law. The Chief Legal Officer and
external counsel report to the Committee in this regard and
matters are then considered by the full Boards. For further
information, please refer to ‘legal proceedings’ within note 25 on
page 116.
Human rights
The Committee reviewed the United Nation’s Framework for
Business and Human Rights. The Framework outlines three
principles: the state’s duty to protect against human rights abuses
by third parties, including business; the corporate responsibility
torespect human rights; and the need for greater access by
victims to effective remedies.
Unilever has supported the Framework by working with nine
other companies as part of the Netherlands chapter of the United
Nations Global Compact to publish apractical toolkit called ‘How
to do business with respect forHuman Rights’. It has also
contributed to research for the‘State of Play’, a review of human
rights due diligence conducted by the Institute for Human
Rightsand Business thatwill inform further development of
theUN Framework.