Corporate Governance
A Unilever Vietnam perspective
Thomas Grunzke
Vice 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
Pressure Groups
Investors3
US SRI funds
1
99 90
Law
57 91
Media
Executives face sanctions
under new corporate
governance law
Competitors
Governments
Business Partners
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 behavior
from 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 introduction
to Unilever Code of Conduct
Unilever CG - How
Our key elements of Corporate Governance
Mission /
Code
Management
Culture
Policies/Controls/
Risk Management
Self-Assessment/
Audit
Mission / Code of Business Principles (1)
1. What guides us….
Mission /
Code
Management
Culture
Policies/Controls/
Risk Management
Self-Assessment/
Audit
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 Principles
towards our employees, consumers and the societies and
world in which we live
Mission / Code of Business Principles (3)
The Code – far beyond obeying the law
Impact on Society
Consumers
Responsible
Management
Practices
Competition
Employees
Business
Partners
Innovation
Public
Activities
Community
Shareholders
Standard
of Conduct
Mutually
Beneficial
Relationships
Environment
Obeying
The Law
Business
Integrity
Foundation of Trust
Conflict
of Interest
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….
Mission /
Code
Management
Culture
Policies/Controls/
Risk Management
Self-Assessment/
Audit
Policies/Controls/Risk Management (2)
….that help to ensure compliance
Policy framework
Exception rules
Internal Controls (Sarbox/Others)
preventive / detective
Risk Management
Key business risks / mitigation
Example: Risk Management
Understanding risks – less surprises
High
IT Security
IMPACT
Potential Legislative
Impact
Attraction and
Retention of
Talent
Project Transition
Management
Health & Safety
Risks
Low
Margin Pressure through
competitive actions
PROBABILITY
High
Self-Assessment / Audit (1)
3. Assessing compliance….
Mission /
Code
Management
Culture
Policies/Controls/
Risk Management
Self-Assessment/
Audit
Self-Assessment / Audit (2)
Self-Assessment – “be honest”
Annual positive assurance process
o Business Principles
o Policies & Procedures
o Internal Controls
o Business Risks
Compliance or approved exceptions
Self-Assessment / Audit (3)
The different roles of Audit
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
Management Culture (1)
4. Finally, it is all about….
Mission /
Code
Management
Culture
Policies/Controls/
Risk Management
Self-Assessment/
Audit
Management Culture (2)
….behaviour!
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 (3)
How to get there
“It is impossible / They are not serious”
Awareness
Practise
Feedback
“They really mean it / We are proud to live it”
Conclusion
Strong Corporate Governance is
simply good business.
Start investing today to earn
the TRUST reward tomorrow.
The End