Unilever 2015 Annual Report Download - page 52

OVERNANE OF UNILEVER
ABOUT UNILEVER
Unlever NV (NV) and Unlever PL (PL), together wth ther
group companes have, snce the Unlever roup was formed n
1930, operated as nearly as practcable as a sngle economc
entty Ths s acheved by specal provsons n the Artcles of
Assocaton of NV and PL, together wth a seres of agreements
between NV and PL whch are together known as the Foundaton
Agreements (descrbed below) These agreements enable Unlever
to acheve unty of management, operatons, shareholders’ rghts,
purpose and msson and can be found on our webste
The Equalsaton Agreement makes the economc poston of
the shareholders of NV and PL, as far as possble, the same
as f they held shares n a sngle company and also regulates the
mutual rghts of the shareholders of NV* and PL Under ths
agreement, NV and PL must adopt the same fnancal perods
and accountng polces
The Deed of Mutual ovenants provdes that NV and PL and ther
respectve subsdary companes shall co-operate n every way for
the purpose of mantanng a common operatng polcy They shall
exchange all relevant nformaton about ther respectve busnesses
– the ntenton beng to create and mantan a common operatng
platform for the roup throughout the world The Deed also contans
provsons for the allocaton of assets between NV and PL
Under the Agreement for Mutual uarantees of Borrowng
between NV and PL, each company wll, f asked by the other,
guarantee the borrowngs of the other and the other’s subsdares
These arrangements are used, as a matter of fnancal polcy, for
certan sgnfcant borrowngs They enable lenders to rely on our
combned fnancal strength
Each NV ordnary share represents the same underlyng economc
nterest n the Unlever roup as each PL ordnary share
However, NV and PL reman separate legal enttes wth dfferent
shareholder consttuences and separate stock exchange lstngs
Shareholders cannot convert or exchange the shares of one for the
shares of the other More nformaton on the exercse of votng
rghts can be found n NV’s and PL’s Artcles of Assocaton and
n the respectve Notces of Meetngs, all of whch can be found on
our webste
* Throughout ths report when referrng to NV shares or shareholders the
term ‘shares’ or ‘shareholder’ also encompasses a depostary recept or
a holder of depostary recepts
wwwunlevercom/legalstructure
BOARDS
The Boards of NV and PL have ultmate responsblty for the
management, general affars, drecton, performance and
long-term success of our busness as a whole The Boards are
one-ter boards, the same people are on both Boards and the
responsblty of the Drectors s collectve, takng nto account
ther respectve roles as Executve Drectors and Non-Executve
Drectors The maorty of the Drectors are Non-Executve
Drectors who essentally have a supervsory role Untl 1 October
2015 Unlever contnued to have two Executve Drectors, the hef
Executve Offcer (EO) and hef Fnancal Offcer (FO), who are
also members of the Unlever Leadershp Executve (ULE)
Jean-Marc Hut, the FO, resgned wth effect from 1 October
2015 Hs successor as FO, raeme Ptkethly, became a member
of the ULE and the FO on 1 October 2015 and wll be proposed
to be apponted as an Executve Drector at the 2016 AMs
A lst of our current Drectors, ther roles on the Boards, ther
dates of appontment and ther other maor appontments s set out
on page 58
The Boards have delegated the operatonal runnng of the roup
to the EO wth the excepton of the followng matters whch are
reserved for the Boards structural and consttutonal matters,
corporate governance, approval of dvdends, approval of overall
strategy for the roup, approval of sgnfcant transactons or
arrangements n relaton to mergers, acqustons, ont ventures
and dsposals, captal expendture, contracts, ltgaton, fnancng
and pensons The EO s responsble to the Boards and s able to
delegate any of hs powers and dscretons whch he does to
members of the ULE The ULE s chared by and reports to the
EO The bographes of ULE members are on page 59
BOARD OMMITTEES
The Boards have establshed four Board ommttees the
Audt ommttee, the ompensaton ommttee, the orporate
Responsblty ommttee and the Nomnatng and orporate
overnance ommttee The terms of reference of these
ommttees can be found on our webste and the reports of
each ommttee, ncludng attendance at meetngs n 2015, can
be found on pages 60 to 83
wwwunlevercom/commttees
THE OVERNANE OF UNILEVER
Further detals of the roles and responsbltes of the harman,
Vce-harman, EO and other corporate offcers and how our
Boards effectvely operate as one board, govern themselves and
delegate ther authortes are set out n the document enttled
‘The overnance of Unlever’, whch can be found on our webste
The overnance of Unlever also descrbes the Foundaton
Agreements, Drectors’ appontment, tenure, nducton and
tranng, Drectors’ ablty to seek ndependent advce at Unlever’s
expense and detals about Board and Management ommttees
(ncludng the Dsclosure ommttee)
wwwunlevercom/corporategovernance
BOARD EFFETIVENESS
BOARD MEETINS
A mnmum of fve face-to-face meetngs are planned throughout
the calendar year to consder, for example, the half-year and full-year
results announcements of the roup and the Annual Report and
Accounts Other Board meetngs and telephone conferences are
held to dscuss matters that arse as well as roup strategc ssues
Meetngs of the Boards may be held ether n London or n Rotterdam
or such other locatons as the Boards thnk ft, wth one or two
off-ste Board meetngs a year The harman sets the Boards’
agenda, ensures the Drectors receve accurate, tmely and clear
nformaton, and promotes effectve relatonshps and open
communcaton between the Executve and Non-Executve Drectors
In 2015 the Boards met physcally n January, March, Aprl, July,
September and November and consdered mportant corporate
events and actons, such as
• developng and approval of the overall strategy
• oversght of the performance of the busness
• revew of rsks and nternal rsk management and
control systems
• authorsaton of maor transactons
• declaraton of dvdends
• convenng of shareholders’ meetngs
• nomnatons for Board appontments, ncludng harman and
FO successon
• revew of the functonng of the Boards and ther ommttees and
• revew of corporate responsblty and sustanablty,
n partcular the Unlever Sustanable Lvng Plan
45Unilever Annual Report and Accounts 2015 Governance
OVERNANE
ORPORATE OVERNANE