Unilever 2011 Annual Report Download - page 52

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REPORT OF THE NOMINATION COMMITTEE
Terms of Reference
The Nomination Committee comprises three Independent
Non-Executive Directors and the Chairman. It was chaired by
Jeroen van der Veer until his retirement at the 2011 AGMs. Paul
Walsh has chaired the Committee since 12 May 2011. The other
members are Ann Fudge, Kees Storm (both of whom were
appointed following the 2011 AGMs) and Michael Treschow. The
Group Secretary acts as secretary to the Committee.
The Committee is responsible for drawing up selection criteria,
succession planning and appointment procedures. Under
Unilever’s corporate governance arrangements Executive and
Non-Executive Directors offer themselves for election each year
at the Annual General Meetings. The Nomination Committee is
responsible for recommending candidates for nomination as
Executive Directors (including the Chief Executive Officer) and
Non-Executive Directors each year based on the process of
evaluations referred to below. After Directors have been
appointed by shareholders the Committee recommends to the
Boards candidates for election as Chairman and the Vice-
Chairman & Senior Independent Director. The Committee also
has responsibility for supervising the policy of the Chief Executive
Officer on the selection criteria and appointment procedures for
senior management and it keeps oversight of all matters relating
to corporate governance, bringing any issues to the attention of
the Boards. 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.
Process for the appointment of Directors
Unilever has formal procedures for the evaluation of the Boards,
the Board Committees and the individual Directors. The
Chairman, in conjunction with the Vice-Chairman & Senior
Independent Director, leads the process whereby the Boards
assess their own performance and the results of the evaluations
are provided to the Committee when it discusses the nominations
for re-election of Directors.
Where a vacancy arises on the Boards, the Committee may seek
the services of specialist recruitment firms and other external
experts to assist in finding individuals with the appropriate skills
and expertise. The Committee reviews candidates presented by
the recruitment firm, or by Directors and members of the Unilever
Leadership Executive, and all members of the Committee are
involved in the interview process before making their
recommendations to the full Boards for approval.
In nominating Directors, the Committee follows the agreed Board
profile of potential Non-Executive Directors, which takes into
account the roles of Non-Executive Directors set out in the Dutch
Corporate Governance Code and the UK Corporate Governance
Code. Under the terms of ‘The Governance of Unilever’ the Boards
should comprise a majority of Non-Executive Directors. To
represent Unilever’s areas of interest, the profile also indicates
there should be a strong representation from Developing and
Emerging markets as well as from Europe and North America.
Non-Executive Directors should be independent of Unilever and
free from any conflicts of interest. With respect to diversity in the
composition of the Boards the objective pursued by the Boards is
to have a variation of age, gender, expertise, social background
and nationality and, wherever possible, the Boards should reflect
Unilever’s consumer base. The Boards are pleased that we
already have 25% female representation on the Boards. We will
continue to aspire to increase that level. However, Unilever feels
that gender is only one part of diversity, and Unilever directors will
continue to be selected on the basis of the wide-ranging
experience, backgrounds, skills, knowledge and insight of its
members.
It is recognised that Executive Directors may be invited to become
a Non-Executive Director of another company and that such an
appointment, subject to the approval of the Chairman and where
relevant the Chief Executive Officer, may broaden the knowledge
and experience to the benefit of the Group (see page 34 for details
in the biographies).
Activities of the Committee during the year
The Committee met six times in 2011. All Committee members
attended the meetings they were eligible to attend except Ann
Fudge who attended three out of four meetings she was eligible to
attend. Other attendees at Committee meetings (or part thereof)
were the Chief Executive Officer, the Chief HR Officer and the
Group Secretary.
The Committee proposed the nomination of all Directors offering
themselves for re-election at the 2011 AGMs in May 2011. During
2011, the Committee also proposed the nomination of Sunil B
Mittal as a Non-Executive Director at the 2011 AGMs in May. Mr
Mittal was chosen because, with his business building experience
in developing markets ranging from the entrepreneurial to
large-scale corporate activities, he would be a valuable addition to
the Boards. In making this appointment the Nomination
Committee was supported by an independent executive search
firm chosen by the Committee which had been engaged to identify
suitable candidates for the role required. Following his
appointment at the 2011 AGMs, the Committee approved an
extensive induction programme for Mr Mittal.
As part of its corporate governance responsibilities, during the
year the Committee considered the new UK Corporate
Governance Code, which applied to Unilever from 1 January 2011,
and will continue to ensure that Unilever complies with the new
provisions, where appropriate, for our future reporting years.
This year, Unilever decided to perform an external evaluation,
undertaken by an independent third-party consultant. Further
information on this evaluation can be found on page 2, the results
of which were discussed at the December 2011 Board Meetings.
The Committee also carried out an assessment of its own
performance and concluded it was performing effectively.
Paul Walsh
Chairman of the Nomination Committee
Ann Fudge
Kees Storm
Michael Treschow
Unilever Annual Report and Accounts 2011
Report of the Directors Governance