Unilever 2012 Annual Report Download - page 49

46 Unilever Annual Report and Accounts 2012Report of the Directors overnance
ORPORATE OVERNANE continued
About Unlever
Since 1930 when the Unilever Group was formed, NV and PLC,
together with their group companies, have operated as nearly
as practicable as a single economic entity. This is achieved by
a series of agreements between NV and PLC (the Foundation
Agreements, further described on page 52), together with special
provisions in the Articles of Association of NV and PLC.
However, NV and PLC remain separate legal entities with different
shareholder constituencies and separate stock exchange listings.
Shareholders cannot convert or exchange the shares of one for
the shares of the other.
NV and PLC have the same Directors, adopt the same accounting
principles and pay dividends to their respective shareholders
on an equalised basis. NV and PLC and their group companies
constitute a single reporting entity for the purposes of presenting
consolidated accounts. Accordingly, the accounts of the Unilever
Group are presented by both NV and PLC as their respective
consolidated accounts.
Unilever is subject to various corporate governance requirements
and best practice codes, the most relevant being those in the
Netherlands, the UK and the US. As stated in our Code of
Business Principles, Unilever “will conduct its operations in
accordance with internationally accepted principles of good
corporate governance”. It is therefore Unilever’s practice to
comply where practicable with the best practice represented
by the aggregate of these best practice codes.
NV and PLC are holding and service companies, and the
business activity of Unilever is carried out by their subsidiaries
around the world. Shares in Group companies may ultimately
be held wholly by either NV or PLC or by the two companies
in varying proportions.
The Boards
It has always been a requirement of Unilever that the same people
be on the Boards of the two parent companies. This guarantees
that all matters are considered by the Boards as a single intellect,
reaching the same conclusions on the same set of facts save
where specific local factors apply. It is essential that in reaching
the same decisions the NV and PLC Boards identify and resolve
any potential conflicts of interest between NV and PLC.
The Boards are one-tier boards, comprising Executive Directors
and, in a majority, Non-Executive Directors. The Boards have
ultimate responsibility for the management, general affairs,
direction, performance and long-term success of our business
as a whole. The responsibility of the Directors is collective, taking
into account their respective roles as Executive Directors and
Non-Executive Directors.
The Boards have, with the exception of certain matters which
are reserved for them, delegated the operational running of the
Group to the Chief Executive Officer. The Chief Executive Officer
is responsible to the Boards and is able to sub-delegate any of
his powers and discretions. Matters reserved for the Boards
include structural and constitutional matters, corporate
governance, approval of dividends, approval of overall strategy
for the Group and approval of significant transactions or
arrangements in relation to mergers, acquisitions, joint ventures
and disposals, capital expenditure, contracts, litigation, financing
and pensions.
The Boards have also established committees whose actions
are regularly reported to and monitored by the Boards, and these
are described on page 50. Further details of how our Boards
effectively operate as one Board, govern themselves and delegate
their authorities, are set out in the document entitled ‘The
Governance of Unilever’, which can be found at
www.unilever.com/investorrelations/corp_governance.
Board meetngs
A minimum of five face-to-face meetings is planned throughout
the calendar year to consider, for example, the half-year and
full-year results statements of the Group and the Annual Report
and Accounts. Other Board meetings and telephone conferences
are held to discuss matters that arise as well as Group strategic
issues. The Non-Executive Directors meet independently to
consider agenda items set by them, usually four or five times
a year. The Chairman, or in his absence the Vice-Chairman/Senior
Independent Director, presides over such meetings.
During the year the Boards will consider important corporate
events and actions, such as:
• oversight of the performance of the business;
• review of risks and controls;
• authorisation of major transactions;
• declaration of dividends;
• convening of shareholders’ meetings;
• nominations for Board appointments;
• approval of Directors’ remuneration policy;
• review of the functioning of the Boards and their Committees;
and
• review of corporate responsibility and sustainability,
in particular the Unilever Sustainable Living Plan.
Our risk management approach and associated systems
of internal control are of utmost importance to the Boards
and are described further on pages 36 to 41.
Attendance
The following table shows the attendance of Directors at Board
meetings for the year ended 31 December 2012. If Directors are
unable to attend a Board meeting they have the opportunity
beforehand to discuss any agenda items with the Chairman.
Attendance is expressed as the number of meetings attended
out of the number eligible to attend. In 2012 we brought forward
our financial reporting timetable which required us to reschedule
a number of Board meetings in 2012. As a consequence, certain
Non-Executive Directors were unable to attend these rescheduled
Board meetings.
Man
Board
Michael Treschow(a) 9/9
Kees Storm 9/9
Paul Polman(b) 9/9
Jean-Marc Huët(b) 9/9
Louise Fresco 9/9
Ann Fudge 8/9
Charles Golden 7/9
Byron Grote 9/9
Sunil B Mittal 6/9
Hixonia Nyasulu 9/9
Sir Malcolm Rifkind 9/9
Paul Walsh 9/9
(a) Chairman
(b) Executive Director