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BUSN603 - Corporate Governance and Risk Management

Added on - 06 Oct 2021

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Running head: CORPORATE GOVERNANCE OF UNILEVER
Corporate Governance of Unilever
Name of the Student
Name of the University
Author note
CORPORATE GOVERNANCE OF UNILEVER1
Table of Contents
Introduction:....................................................................................................................................2
Part 1. Concept of corporate governance and role of managers and creating socially responsible
organisation:....................................................................................................................................2
Part 1.1. Concept of corporate governance:.................................................................................2
Part 1.2.Role of managers and creating socially responsible organisation:...............................3
Part 2. Analysis and explanation of role of corporate governance and risk management in
responding to various stakeholders needs:......................................................................................4
Corporate governance and Revenue risk:....................................................................................4
Corporate governance and supply chain risks:............................................................................5
Corporate governance and investment risks:...............................................................................5
Part 3. Leadership and management processes in Unilever with respect to governance and policy
compliance:......................................................................................................................................7
Part 4. Conceptual, Contextual and ethical issues bearing upon corporate decisions:....................7
Part 5. Critical evaluation and application of different organisational approaches to corporate
governance and risk management:...................................................................................................8
Conclusion:......................................................................................................................................9
References:....................................................................................................................................10
CORPORATE GOVERNANCE OF UNILEVER2
Introduction:
Corporate governance plays a very significant role in ensuring legitimate distribution of
rights and responsibilities among the management, employees and the external stakeholders.
Business organisations serve several stakeholders both internal as well as external. They are
legally and ethically bound to protect the interests of all the stakeholder groups. The apex
management of business organisations today form formidable corporate governance strategies
based on their visions and missions. Kraakman and Hansmann (2017) descried corporate law as
the basic law of corporate governance. Arora, and Sharma (2016) mention that corporate
governance is closely related to performance of the firms in the emerging economies which
already experience high level of market competition. Thus, it is evident that corporate
governance occupies a very important position in the present commercial organisations,
especially leading multinational companies. The aim of the paper is to explore the role of
corporate governance in different areas like risk management, CSR, leadership and policy
compliance. The base of the study would be lent by one of the largest fast moving consumer
goods marketing companies in world, Unilever (Unilever.com. 2018).
Part 1. Concept of corporate governance and role of managers and creating socially
responsible organisation:
Part 1.1. Concept of corporate governance:
The term corporate government as perKraakman and Hansmann (2017) can be defined
as the procedures and policies which the apex management of business organisations take to
ensure that the rights and interests of stakeholders are protected to the feasible extent. The
feasible extent here refers to the acceptance of the benefits taking into account the legal and
ethical parameters. Armstrong et al. (2015) point out that corporate governance plays very
CORPORATE GOVERNANCE OF UNILEVER3
important roles in the operations of multinational companies like Unilever. It can clearly be
pointed out that this pressing importance of corporate governance calls of leadership from the
apex managers.
Part 1.2.Role of managers and creating socially responsible organisation:
Managers play very significant roles in the corporate governance of business
organisations, thus contributing towards creating socially responsible corporate citizens. This
fact comes into play in the global corporate governance strategies of Unilever. This is evident
from the unified codes of business principles determined by the apex management which apply
to Unilever PLC, Unilever NV and the subsidiary companies, thereby referred to as Unilever
Group. The company maintains similar directors for both Unilever PLC based in London and
Unilever NV, based in Rotterdam, both functioning as the headquarters. The company in order to
ensure uniform decision making process appoints similar directors for the boards of both the
headquarters. The company follows a uniform procedure of operations like accounting
procedure, product quality assurance and convening shareholder meetings(Unilever.com. 2018).
The uniform corporate governance throughout Unilever Group ensure transparency and
stakeholder benefit. For example, nomination of similar senior managers at both PLC and NV
would result in uniform decision making in the headquarters of Unilever Group, thus paving
ways for effective execution. Secondly, the company maintains a uniform quality for its products
its markets in the global. These uniform product quality parameters enable customers of Unilever
obtain high quality, thus benefiting the former. Thirdly, uniform financial decisions and uniform
publication of its financial information benefitting the shareholders around the world. This
means that the corporate governance of Unilever under the leadership of the apex managers has
enabled the company to establish itself as a socially responsible organisation.
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