Unilever 2012 Annual Report Download - page 47

44 Unilever Annual Report and Accounts 2012Report of the Directors overnance
ORPORATE OVERNANE
Unilever conducts its operations in
accordance with internationally accepted
principles of good corporate governance and
best practice, aiming to achieve compliance
with the highest of each of those standards.
Mchael Treschow
Chairman
BOARD IN ACTION
• Succession planning resulting in three new
Non-Executive Director candidates proposed
for election at the 2013 AGMs, to broaden the
diversity and knowledge base of the Boards
• 2012 internal Board evaluation concluded that
the Boards continue to operate effectively
• International locations for Board meetings,
providing Directors with a greater understanding
of local businesses and their customers
• Continued engagement with shareholders
and stakeholders
• Consideration of changes to Dutch and UK
Corporate Governance Codes
harman’s Overvew
harman’s Overvew
Dear shareholders,
At Unilever we believe that good corporate governance is integral
to the structures and processes that the Boards have put in place
to inform, advise, manage and supervise the activities of the
Group toward the achievement of its strategic objectives.
Unilever constantly monitors developments and trends in
corporate governance. We are subject to various jurisdictional
requirements, the most relevant being those in the Netherlands,
UK and US, and therefore we conduct our operations in
accordance with internationally accepted principles of good
corporate governance and best practices, ensuring compliance
with the highest of each of those standards.
2012 has been another dynamic year for corporate governance,
with the release of many government and regulatory consultations,
a number of which Unilever has responded to. The most important
of these being the UK Financial Reporting Council (FRC) publishing
the updated UK Corporate Governance Code, including Guidance
on Audit Committees (September 2012) and updates to the FRC’s
Stewardship Code, the future of narrative reporting and various
consultations by the Dutch Corporate Governance Code Monitoring
Committee. Each of the Committee Chairmen has reported on
the highlights and activities in 2012, and priorities for 2013, and
for the Compensation and Management Resources Committee
(formerly the Remuneration Committee) in particular, the statutory
and regulatory requirements for the reporting of directors’
remuneration, which has been the subject of widespread debate
this year.
As Chairman, I recognise that effective Boards are central to
Unilever’s ongoing success and my leadership of the Boards
plays a significant role. The following governance report includes
descriptions of Unilever’s corporate governance structures
and procedures, along with an explanation of the work of the
Boards and how they have applied the principles of leadership,
effectiveness, accountability, remuneration, and relations with
shareholders within the Dutch, UK and US Corporate Governance
Codes. Our corporate governance framework and practice
described in the following pages include each of the sections
contained within the applicable Corporate Governance Codes,
to provide an understanding of how we apply the main principles.
Effectveness
The effectiveness of Unilever’s Boards is assessed primarily
by an annual Board evaluation process. During the year I met
with De Leeuw Management, the external consultancy engaged
to perform the 2011 Board evaluation, to follow up on the
recommendations made, and I am pleased to say that it is agreed
that the Boards continue to make satisfactory progress, details
of which can be found under ‘Ongoing Evaluation’ on pages 47
and 48. In 2012, our internal evaluation concluded that the Boards
continued to operate proficiently. Comments made by Directors
in the evaluations were discussed by the Boards to address any
issues or areas for improvement. Following the 2012 evaluation
process, I am pleased to confirm that each of the Directors’
performance and contribution continues to be effective and
the Boards will be nominating each of them for re-election
at the 2013 AGMs.
Dversty
This year diversity at Board level has continued to be a key topic
of governance for companies within the EU and remains high
on the agenda of Unilever’s Boards and the Nominating and
Corporate Governance Committee (formerly the Nomination
Committee). We have long understood the importance of diversity
within our workforce because of the wide range of consumers
we connect with globally. This goes right through our organisation,
starting with the Boards. Looking at gender diversity, we currently
have three female Board members and, in addition, two female
Non-Executive Directors are being nominated by the Boards for
election at the 2013 AGMs. However, Unilever feels that gender
is only one part of diversity and Unilever Directors will continue
to be selected on the basis of their wide-ranging experience,
backgrounds, skills, knowledge and insight. The Nominating
and Corporate Governance Committee reviews Unilever’s Diversity
Policy on an annual basis. Our current Board members represent
six nationalities, all of which bring with them experience from
a wide range of international business, professional and public
office backgrounds.