Unilever 2012 Annual Report Download - page 44

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Unilever Annual Report and Accounts 2012 Report of the Directors About Unilever
ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
Our Rsk Appette and Approach to Rsk Management
Risk management is integral to Unilever’s strategy and to the
achievement of Unilever’s long-term goals. Our success as an
organisation depends on our ability to identify and exploit the
opportunities generated by our business and the markets we
are in. In doing this we take an embedded approach to risk
management which puts risk and opportunity assessment
at the core of the leadership team agenda, which is where
we believe it should be.
Unilever adopts a risk profile that is aligned to our vision to
double the size of our business while reducing our environmental
footprint and increasing our positive social impact. Our available
capital and other resources are applied to underpin our priorities.
We aim to maintain a strong single A credit rating on a long term
basis, reflecting the strength of our balance sheet and cash flows.
Our approach to risk management is designed to provide
reasonable, but notabsolute, assurance that our assets are
safeguarded, the risks facing the business are being assessed and
mitigated and all information that may be required to be disclosed
is reported toUnilever’s senior management including, where
appropriate, the Chief Executive Officer and Chief Financial Officer.
Organsaton
The Unilever Boards assume overall accountability for the
management of risk and for reviewing the effectiveness of
Unilever’s risk management and internal control systems.
The Boards have established a clear organisational structure
withwell defined accountabilities for the principal risks that
Unilever faces in the short, medium and longer term. This
organisational structure and distribution of accountabilities and
responsibilities ensures that every country in which we operate
has specific resources and processes for risk review and risk
mitigation. This is supported by the Unilever Leadership
Executive, which takes an active responsibility for focusing on the
principal areas of risk to Unilever. The Boards regularly review
these risk areas, including consideration of environmental, social
and governance matters, and retain responsibility for determining
the nature and extent of the significant risks that Unilever is
prepared to take to achieve its strategic objectives.
Foundaton and Prncples
Unilever’s approach to doing business is framed by our Corporate
Purpose. Our Code of Business Principles sets out the standards
of behaviour that we expect all employees to adhere to. Day-to-
day responsibility for ensuring these principles are applied
throughout Unilever rests with senior management across
categories, geographies and functions. A network of Code
Officers and Committees supports the activities necessary to
communicate the Code, deliver training, maintain processes and
procedures (including ‘hotlines’) to report and respond to alleged
breaches, and to capture and communicate learnings.
We have a framework of Code Policies that underpin the Code and
set out the non-negotiable standards of behaviour expected from
all our employees.
Unilever’s functional standards define mandatory requirements
across a range of specialist areas such as health and safety,
accounting and reporting and financial risk management.
Processes
Unilever operates a wide range of processes and activities
across all its operations covering strategy, planning, execution
and performance management. Risk management is integrated
into every stage of this business cycle. These procedures are
formalised and documented and are increasingly being
centralised and automated into transactional and other
information technology systems.
Assurance and Re-Assurance
Assurance on compliance with the Code of Business Principles
and all of our Code Policies is obtained annually from Unilever
management via a formal Code declaration. In addition, there
are specialist compliance programmes which run during the year
and vary depending on thebusiness priorities. These specialist
compliance programmes supplement the Code declaration.
Our Corporate Audit function plays a vital role in providing to both
management and the Boards an objective and independent review
of the effectiveness of risk management and internal control
systems throughout Unilever.
Boards’ assessment of complance wth the Rsk
Management frameworks
The Boards, advised by the Committees where appropriate,
regularly review the significant risks and decisions that could
have a material impact on Unilever. These reviews consider the
boundaries to the risks that Unilever is prepared to take in pursuit
of the business strategy and the effectiveness of the management
controls in place to mitigate the risk exposure.
The Boards, through the Audit Committee, have reviewed the
assessment of risks, internal controls and disclosure controls
and procedures in operation within Unilever. They have also
considered the effectiveness of any remedial actions taken for
the year covered by this document and up to the date of its
approval by the Boards.
Details of the activities of the Audit Committee in relation to
this can be found in the Report of the Audit Committee on pages
56 and 57.
Further statements on compliance with the specific risk
management and control requirements in the Dutch Corporate
Governance Code, the UK Corporate Governance Code, the US
Securities Exchange Act (1934) and the Sarbanes-Oxley (2002)
Act can be found on pages 52 to 54.