Dual chairs to go as sluggish Unilever plans new structure

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The Independent Online

Unilever is considering getting rid of its controversial dual co-chairman structure to try to re-ignite its sluggish performance and relationship with investors.

Unilever is considering getting rid of its controversial dual co-chairman structure to try to re-ignite its sluggish performance and relationship with investors.

Under proposals being debated by the Anglo-Dutch food giant's board, the Dutch co-chairman, Antony Burgmans, would become chairman and the newly appointed co-chairman in London, Patrick Cescau, would be chief executive.

The changes would also mean an operational restructuring, with the group having to decide whether it is run from London or Rotterdam. But it is understood that Unilever is not considering changing its capital structure, under which it has a dual domicile and shares traded in London and Amsterdam. Another troubled Anglo-Dutch group, Shell, recently announced that it was scrapping its dual structure. It will have one board, with the company based in The Hague but listed in London.

Insiders at Unilever deny that the debate about changing the group's structure was prompted by the changes at Shell. Instead, they point to the decision earlier this year to unite the Dutch and English board by having the same non-executive directors sit on both.

However, some of the senior executives and some non-executives at Unilever may lose their board positions as part of the shake-up. Currently, there are seven executive directors and nine non-executives. It is understood that the group sees as an ideal structure an Anglo-Saxon type board with four executive directors and five or six non-executives.

Though Unilever has refused to comment on what it says is "pure speculation", it has given a number of clues about its thinking.

Last month, in a conference call, Unilever's finance director, Rudy Markham, was asked by a US investor, Andy Brown of Cedar Rock Capital, whether the group was considering appointing a single chief executive and chairman. Mr Markham answered: "We continue to monitor developments in terms of governance in the world as we go forward."

In response to this, Andrew Wood at influential US analysts Bernstein & Co wrote a note discussing changes in the structure concluding: "We consider that unifying the CEO/Chairman structure at Unilever would be well received by investors."

Another clue has come from leading Dutch newspaper Het Financieele Dagblad, which on Friday wrote an article discussing the likely changes. It said that sources in Unilever were pressing for a unification of the roles.

The changes would be in line with the new Dutch corporate governance code drawn up by Morris Tabaksblat, a former co-chairman of Unilever. It would also show Unilever doing something to re-energise the group, which has rather lost its way in the past couple of years.

Insiders at Unilever say that the senior managers need to get closer to the operational business to put the company back on the right track.

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