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Corporate governance
contribution during the past seven years, particularly while
a member of the Nomination and Remuneration
Committees.
The Rt Hon The Lord Brittan of Spennithorne QC
was appointed as an Advisory Director with effect from
1 May 2000 until the Annual General Meetings in 2003.
Lord Brittan was a member of the UK Government, as
Home Secretary and as Secretary of State for Trade and
Industry, and, between 1989 and 1999, of the European
Commission, where he became a Vice-President,
his responsibilities having included competition and
trade policy.
The Boards have resolved to re-appoint Mr Bertrand
Collomb as an Advisory Director, also until the Annual
General Meetings in 2003.
Sir Brian Hayes and Lord Wright of Richmond retired
at the Annual General Meetings on 4 May 1999.
Requirements in the Netherlands and the UK
A vital factor in the arrangements between NV and PLC
is their having the same directors. As the concept of the
non-executive director, as recognised in the United
Kingdom, is not a feature of corporate governance in the
Netherlands, and the Supervisory Board, as recognised in
the Netherlands, is unknown in the United Kingdom, it is
not practicable to appoint supervisory or non-executive
directors who could serve on both Boards. However, a
strong independent element has long been provided by
Unilever’s Advisory Directors, who perform many of the
functions of supervisory and non-executive directors.
The Audit, External Affairs and Corporate Relations and
Remuneration Committees consist exclusively of Advisory
Directors and the majority of the members of the
Nomination Committee are Advisory Directors. See page
44 for details.
The Committee on Corporate Governance in the
Netherlands issued its report ‘Recommendations on
Corporate Governance in the Netherlands’ in 1997.
NV applies the Committee’s recommendations for
supervisory directors to its Advisory Directors in so far
as these are in line with their specific role within Unilever.
NV complies with all other recommendations of the
Committee, except that the Board of Directors takes the
view that requests for an item to be placed on the agenda
for a shareholders’ meeting must be supported by more
than an insignificant proportion of the shareholders and
will therefore only accept requests from a shareholder or
group of shareholders holding at least 1% of the voting
rights attaching to the issued share capital of NV. Requests
must be submitted, at the latest, 60 days prior to the date
of the meeting.
PLC is required, as a company that is incorporated in the
United Kingdom and listed on the London Stock
Exchange, to state how it has applied the principles and
how far it has complied with the provisions set out in
Section 1 of the Combined Code (‘the Code’) appended
to the Listing Rules of the London Stock Exchange.
As already explained, the Boards control the Company
through the Executive Committee. Responsibilities are
s h a red by the Chairmen of NV and PLC, while the Advisory
D i rectors perform many of the functions of the supervisory
board members or non-executive directors, although they
are not formally members of the Boards. For the purposes
of the Code, the Boards have not appointed a senior
independent director, on the basis that issues for the
Boards can be raised with whichever Advisory Director is
the Chairman of the relevant Board Committee and the
Advisory Directors are entitled to meet as a body and
appoint a senior member as their spokesman.
Unilever’s remuneration policy is contained within the
report by the Boards on the directors’ remuneration and
interests on pages 49 to 59. This also deals with any noncompliance
with the Code in this area. Members of the
Audit, Remuneration and Nomination Committees will be
available to answer questions at the Annual General
Meetings of both NV and PLC. The members attending
each meeting will not necessarily include the Chairman of
the Committee, since these meetings take place at about
the same time in Rotterdam and London respectively.
A description of Unilever’s compliance with ‘Internal
Control – Guidance for Directors on the Combined Code’
is given on page 60.
Unilever has, since its inception, adopted the principle that
it is good practice that the most senior roles in NV and
P L C are shared and not concentrated in one person.
As a consequence it is a principal tenet of its governance
philosophy, which finds expression in two people who
each combine the roles of Chairman and Chief Executive
and who meet regularly for joint decision making. This
carefully balanced arrangement has served Unilever’s
unique constitutional arrangements very well for many
years and the Boards believe that to separate these roles
would only introduce undesirable and unnecessary
complexity. Since the Advisory Directors are not formally
members of the Boards, it would be inappropriate for one
of them to act as Chairman. In all other respects, PLC has
complied with the Code throughout 1999.