Unilever 2011 Annual Report Download - page 47

44
CORPORATE GOVERNANCE continued
Remuneration Committee
The Remuneration Committee may not be chaired by a Board
member who is a member of the management board of another
listed company (bpp III.5.11). Paul Walsh is Chairman of the
Remuneration Committee and has been CEO of Diageo Plc since
2000. Paul has profound knowledge and understanding of
remuneration matters at companies operating globally and
understands how remuneration policies support the growth
objective. His experience and insight of remuneration matters is
very valuable to Unilever. The Boards believe that Mr Walsh is
ideally placed for the position of Chairman of the Remuneration
Committee.
Financing preference shares
NV issued 6% and 7% cumulative preference shares between
1927 and 1964. 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.
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.
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 40). 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 and Accounts:
• 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’;
• 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 28 to 33 and within the relevant
sections under ‘Corporate Governance’;
• 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’;
• 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’; 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’.
The United Kingdom
PLC is required, as a company that is incorporated in the UK and
listed on the London Stock Exchange, to state how it has applied
the main principles and how far it has complied with the
provisions set out in the 2010 UK Corporate Governance Code, a
copy of which is available at www.frc.org.uk.
In the preceding pages we have described how we have applied
the main principles and the provisions in the UK Code. In 2011,
PLC complied with all UK Code provisions, with the exception of
provision E.2.3 of the Code (which provides that the chairmen of
the audit, remuneration and nomination committees be available
to answer questions at the AGM and that all directors attend the
AGM) as Kees Storm, who is Chairman of the Audit Committee,
was unable to attend the AGM in May because he was required to
attend a scheduled board meeting of another public company on
the same day.
Risk management and control
Our approach to risk management and systems of internal control
is in line with the recommendations in the report on ‘Internal
Control – Revised Guidance for Directors on the UK Combined
Code’ (‘The Turnbull guidance’).
It is Unilever’s practice to bring acquired companies within the
Group’s governance procedures as soon as is practicable and in
any event by the end of the first full year of operation.
The United States
Both NV and PLC are listed on the New York Stock Exchange and
must therefore comply with such of the requirements of US
legislation, such as the Sarbanes-Oxley Act of 2002, regulations
enacted under US securities laws and the Listing Standards of the
New York Stock Exchange (NYSE) as are applicable to foreign
private issuers, copies of which are available at www.sec.gov and
www.nyse.com. In some cases the requirements are mandatory
and in other cases the obligation is to ‘comply or explain’.
We have complied in all material respects with the requirements
concerning corporate governance that were in force during 2011.
Attention is drawn in particular to the Report of the Audit
Committee on pages 46 and 47.
Unilever Annual Report and Accounts 2011
Report of the Directors Governance