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

99 90
Media Law
57 91
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/ Self-Assessment/
Risk Management Audit
Mission / Code of Business Principles (1)
1. What guides us….

Mission /
Code

Management
Culture

Policies/Controls/ Self-Assessment/
Risk Management 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 Mutually
Competition Employees
Management Beneficial
Practices Relationships
Business
Innovation
Partners

Public
Community
Activities

Shareholders Environment

Standard Obeying Business Conflict

of Conduct The Law Integrity of Interest

Foundation of Trust
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/ Self-Assessment/
Risk Management 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

Potential Legislative
Impact Attraction and
Retention of
Talent
IMPACT

Project Transition
Management

Health & Safety

Risks Margin Pressure through
competitive actions

Low PROBABILITY High

Self-Assessment / Audit (1)
3. Assessing compliance….

Mission /
Code

Management
Culture

Policies/Controls/ Self-Assessment/
Risk Management
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/ Self-Assessment/
Risk Management
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