Corporate GovernanceA Unilever Vietnam perspective

Thomas GrunzkeVice President - Finance, Unilever Vietnam

Introduction (1)

Unilever worldwide

� Leading FMCG company with > € 40 bn turnover

� Founded more than 75 years ago

� Headquarters in UK and the Netherlands

� 180,000 direct employees worldwide

� 150 millions times a day, in 150 countries, people use our products at key moments of their day

Introduction (2)

Unilever Vietnam

� #1 FMCG company with > USD500mio turnover� Operating in Vietnam since 1995� 2 entities: Unilever Vietnam JV, Unilever Vietnam Co� 1,500 direct employees (10,000+ indirect)� USD120m+ investment

Corporate Governance Introduction - What (1)

Good CG – our understanding

� Compliance to local and international laws as a minimum

but also:

� Highest standards of behavior

� Transparent, reliable, complete information

� No material negative surprises

� Respect for all stakeholders

� Consistency across the organization

� Part of day-to-day company life

Corporate Governance Introduction - Why (2)

Good CG – The biggest reward is TRUST from…

Consumers

Governments

Media Law

Pressure Groups Investors

Competitors

Business Partners

3

1

US SRI funds

95

99

01

97

Executives face sanctions under new corporate

governance law

Governance in Unilever

Conviction rather than just compliance

“Unilever has earned a reputation for conducting its business with integrity and with respect for the interests of those our activities can affect.This reputation is an asset , just as real as our people and brands.

In Unilever, we believe success requires the highest standards of behaviorfrom all of us.

We want this Code to be more than a collection of high-sounding statements.It must have practical value in our day-to-day business and each one of us

must follow these principles in the spirit as well as the letter.”*

* Extract from introductionto Unilever Code of Conduct

Unilever CG - How

Our key elements of Corporate Governance

ManagementCulture

Policies/Controls/Risk Management

Self-Assessment/Audit

Mission /Code

Mission / Code of Business Principles (1)

1. What guides us….

ManagementCulture

Policies/Controls/Risk Management

Self-Assessment/Audit

Mission /Code

Mission / Code of Business Principles (2)

…Our Mission and our Code

Unilever’s mission is to add Vitality to life. We meet everyday needs of (all Vietnamese) consumers

for nutrition, hygiene and personal care with brands that help people feel good,

look good and get more out of life.

Applying the highest standards of corporate behavior

as defined in our Code of Business Principlestowards our employees, consumers and the societies and

world in which we live

ObeyingThe Law

Standard of Conduct

BusinessIntegrity

Conflict of Interest

Community

Consumers

Employees

Business Partners

PublicActivities

Innovation

Competition

Shareholders Environment

Foundation of Trust

Impact on Society

Responsible Management

Practices

Mutually Beneficial

Relationships

Mission / Code of Business Principles (3)

The Code – far beyond obeying the law

Mission / Code of Business Principles (4)

The Code – 2 examples

Employees� diversity� recruitment principles� safety� training� communication

Consumers� safety� labelling� advertising

Mission / Code of Business Principles (5)

The Ethics Hotline

o A 24 hours a day, 365 days a year hotline

o anonymous if requested

o any Code of Business Principles concerns

o full protection against potential retaliation

Policies/Controls/Risk Management (1)

2. The “hard” processes….

ManagementCulture

Policies/Controls/Risk Management

Self-Assessment/Audit

Mission /Code

� Policy framework

� Exception rules

� Internal Controls (Sarbox/Others)

� preventive / detective

� Risk Management

� Key business risks / mitigation

Policies/Controls/Risk Management (2)

….that help to ensure compliance

Example: Risk Management

Understanding risks – less surprises IM

PA

CT

IMP

AC

T

PROBABILITYPROBABILITYLowLow

HighHigh

HighHigh

Attraction and Retention of

Talent

Margin Pressure through competitive actions

Health & Safety Risks

IT Security

Project Transition Management

Potential Legislative Impact

Self-Assessment / Audit (1)

3. Assessing compliance….

ManagementCulture

Policies/Controls/Risk Management

Self-Assessment/Audit

Mission /Code

� Annual positive assurance process

o Business Principleso Policies & Procedures o Internal Controlso Business Risks

Compliance or approved exceptions

Self-Assessment / Audit (2)

Self-Assessment – “be honest”

� Corporate Audit� Reassurance to HQ on key business risks / CRM

� Internal Audit� Reassurance to Local Management on Operational

controls

� External (Financial) Audit� Reassurance to shareholders and other external

stakeholders on Financial Statements

� Technical Audits (ISO/Dupont etc)� Reassurance to customers/consumers on technical

standards / quality

Self-Assessment / Audit (3)

The different roles of Audit

Management Culture (1)

4. Finally, it is all about….

ManagementCulture

Policies/Controls/Risk Management

Self-Assessment/Audit

Mission /Code

� Tone from the top

� Balance of power

� Experience

� Tolerance for mistakes

� Reward systems

� No punishment for lost business opportunities

� No tolerance for non-compliance

Management Culture (2)

….behaviour!

Management Culture (3)

How to get there

Awareness

Practise

Feedback

““ It is impossible / They are not seriousIt is impossible / They are not serious ””

““ They really mean it / We are proud to live itThey really mean it / We are proud to live it ””

Conclusion

Strong Corporate Governance is Strong Corporate Governance is simply good business. simply good business.

Start investing today to earnStart investing today to earnthe TRUST reward tomorrow.the TRUST reward tomorrow.

The End