Unilever 2012 Annual Report Download - page 56

ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
53Unilever Annual Report and Accounts 2012 Report of the Directors overnance
Our principal risks and our approach to risk management and
systems of internal control are described on pages 36 to 41.
Requrements – The Netherlands
NV complies with almost all of the principles and best
practice provisions of the Dutch Corporate Governance
Code (Dutch Code), a copy of which is available at
www.commissiecorporategovernance.nl.
Unilever places a great deal of importance on corporate
responsibility and sustainability as is evidenced by our
vision to double the size of the company while reducing our
environmental impact. Unilever is keen to ensure focus on
key financial performance measures which we believe to
be the drivers of shareholder value creation and relative total
shareholder return. Unilever therefore believes that the interests
of the business and shareholders are best served by linking
the long-term share plans to the measures as described in the
Directors’ Remuneration Report and has not included a non-
financial performance indicator (Principle II.2 and bpp II.2.3).
Rsk management and control
As a result of the review of the Audit Committee (as described
in its report on pages 56 and 57) the Boards believe that as
regards financial reporting risks, the risk management and
control systems provide reasonable assurance that the financial
statements do not contain any errors of material importance and
the risk management and control systems have worked properly
in 2012 (bpp II.1.5).
The aforesaid statements are not statements in accordance with
the requirements of Section 404 of the US Sarbanes-Oxley Act
of2002.
Retenton perod of shares
The Dutch Code recommends that shares granted to Executive
Directors must be retained for a period of at least five years (bpp
II.2.5). Our shareholder-approved remuneration policy requires
Executive Directors to build and retain a personal shareholding
in Unilever. The Boards believe that this is in line with the spirit
of the Dutch Code.
Severance pay
It is our policy to set the level of severance payments for
Directors at no more than one year’s salary, unless the Boards,
at the proposal of the Compensation and Management Resources
Committee, find this manifestly unreasonable given circumstances
or unless otherwise dictated by applicable law (bpp II.2.8).
ompensaton and Management Resources ommttee
The Compensation and Management Resources Committee
(formerly 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 Compensation and Management Resources 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 Compensation and Management Resources Committee.
Fnancng 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.
Ant-takeover constructons 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.
Meetngs of analysts and presentatons to nvestors
We have extensive procedures for handling relations with
and communicating with shareholders, investors, analysts
and the media (see also page 51). 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.
orporate overnance 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
Annual Report and Accounts:
• the information concerning compliance with the Dutch 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 36 to 41 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’.
Requrements – The Unted Kngdom
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 of the UK Code.
In 2012, PLC complied with all UK Code provisions.