Nestlé Corporate Governance Business Principles

Nestl bodily Goernance product line PrinciplesNestle is a flat organisation with few levels of management and span of misrepresent was founded in 1866 by Henri Nestl at VeVey (Switzerland). Currently Nestle is one of the worlds largest Nutrition, health and wellcape company and committed to provide the best Nutritional viands products nearly the world, more everyplace, in order to ensure company long landmark sustainable growth, accompany constantly reviews its product portfolio and focuses on its efforts. Also better understand the consider of customer, nestle monitor consumer panels by ingesting research. Consequencely, success of Nestle is a reflection of clear outline responsibilities, reflection of professed(prenominal)ism, responsible attitude of management, well demarcated butt as well as significant global leadership positionCompany BrandsThe Nestl brand portfolio such as milk and dairy products, nutritions, weight management, exploit and healthc be, breakfast cereals, ice cream, coffee and culinary products (prepared dishes, cooking aids, sauces) pet care, bottled water etc. practic altogethery cover individually(prenominal) food and beverage categories. Many of them find leadership both topical anestheticly and globally market and pull throughed for several years, for instance S.Pellegrino the mineral water from Italy and Nestl Moa in Brazil, are l over 100 years old.The best-known global brands include Nescaf, Nestea, Maggi, Buitoni, Purina and Nestl itself former(a) brands alike sell in many countries for instance Milo, Nespresso, Nesquik, Kit Kat, Smarties, Polo, Friskies, Perrier and Vittel. It is considered that total number of brands including local and international r to each onees into several thousandsNestl Corporate GovernanceManagementManagement professional skills, Curiosity and open-mindedness as well as a high level of engagement in other cultures, as well commitment to continuous learning, improving, and sharing knowledge, overly ability to motivate staff in order to contribute wider group surgical procedure and willing to take risks and maintain composure under pressure and involvement of each employee at all levels are concerned with continuously adding value to company.Business PrinciplesCompany business principles are found on fairness, honesty and sound compassionate values in any case to keep an eye on local legislation, religious practices and culture, Therefore, company wonder and follow all applicable local laws around the world. Company objective is to market and manufacture the products such a way to create long term value for business partner, portionholders, consumers, and employees, to ensure the highest standard of organisation Nestle believes legislation is the effective safeguard of responsible lend law of Business ConductThe Nestl polity of Business Conduct helps the continued implementation of the CorporateBusiness Principles and the nature of this Code are des igned to provide a frame of reference against all possible situations that may occur. Moreover the purpose of this code is to Employees should seek guidance when they are in doubt situation, act efficaciously and honestly and avoid all those conduct which may damage Nestle reputation also give preference to Companys interests instead of personal or other interests.Compliance with laws, rules and regulationsConflicts of Interest impertinent film directorships and other outside activitiesFamilies and RelativesCorporate opportunitiesInsider tradingAntitrust and fair dealingConfidential in imageationFraud, protection of company assets, accountingBribery and corruptionGifts, meals, pastimeDiscrimination and harassmentFailure to complyReporting illegal or non-compliant conduct terms of AssociationCompany amends new names of association in popular clashing of 23 April 2009.Article of association consist of five main categories, which is as under cosmopolitanArticle 1 Article 2 Corp orate call off registered offices Duration and Purpose.This category is consisting of two sub category or bias in which they condone company abduce, company registration and company purpose grapple Capital.Article 3 mete out capitalArticle 3bis Conditional donation capital.On this section it has been rationalizeed the share capital of Nestle which is 100 000 000 registered shares and the value of each is CHF0.10 is worthCHF 10 000 000 (ten million Swiss francs). Also explain the shareholder rights to subscribe the new share and also point out the mount of director power to may limit or withdraw the shareholder right to subscribe for new shares.Article 4 Share certificates Dematerialised sharesThis article section has discussed the reduce regarding registered shares or certificate. Moreover, it shows that valid certificate must be signed by two postings of directors, in case of cease shareholder have right to contain back the certificate at no cost.Article 5 Share registerT his section of article has explained Recoganisation request of shareholder for voting right is ground on company Recoganisation furthermore, registered shareholder with voting rights must have account owner and the minimum limit for voting right is more than 5 % of the share also Board of Directors shall announce regulations relating to the registration of nominees to ensure compliance with these Articles of Association.III. Organisation of NestlArticle 6 Powers of the command MeetingThe firs article of this category has explained the power of everyday Meeting for instance The world-wide Meeting of shareholder will discuss the article of association also elect and remove the atom of the board and authorize the consolidated annual financial report also take all decisions which is by law and or under the articles of Association.Article 7 Annual oecumenic MeetingThe Annual command Meeting held each year twice after the close of the financial year of Nestl.Article 8 Extraordinar y general Meeting1 Extraordinary customary Meetings convened by the Board of Directors on the request of shareholder whose holdings at least one tenth of the share capital.Article 9 Notice of ecumenical Meetings Agenda1 Extraordinary General Meetings convened by notice in the Swiss Official Gazette of Commerce with in twenty days before the date fixed also Shareholders may be informed by ordinary mail and allow one or more share holder whose combined represent at least 0.15 % of share capital allow request about the agenda of general confluence and made proposal .Article 10 Presiding officer MinutesThe secretary of the board kept the minutes of General Meeting also Chairman or any member of the Board of Directors shall preside and carry all procedural powers about General Meeting.Article 11 Voting rights ProxiesThis article will explain that each recorded share with voting rights confers oneVote also in General meeting with complaisance to own shares or represented in excess of 5 % shall be counted as one share holder.Article 12 Quorum and decisionsThis article will discuss about the voting and decision make process for instance duly constituted General Meetings irrespective of the number of shareholders or by the Articles of Association or law, also shareholders elections and resolutions will be answer by the majority of the shares represented.B. Board of DirectorsArticle 14 15 Number of Directors and Term of officeThe Board of Directors shall consist of at least seven members also board shall be elected for a three years by the General Meeting. Furthermore each year board renewed by rotary motion also board will establish new order of rotation in the case of increase or decrease of board of director.Article 16 Organisation of the Board RemunerationThis article explains about board of director responsibility for instance the selection of chairman and voice chairmen also define board regulation and assignment of responsibilities.Article 17 Powers of the Board in generalThis article define the general power of board director can conduct business to the extent that is not within the board regulation or general meeting.Article 18 Specific powers of the Boardthe section of article define the board of director power for instance the board regulation, accounting and financial control, the turn onment of new staff, the ultimate supervision, the preparation of business report , preparation of General meeting also the opening and closing of new and old branch office.AuditorsArticle 20 21 Number of Auditors Term of office and Rights and duties of AuditorsThe auditor shall portion out for a term of one year in General Meeting and will verify the annual financial statement of company and submits this report in the General Meeting.Nestle- Nespresso AAA sustainable quality programNestle has organised multi-stakeholder Programme in the coffee sector to introduce environmental, social and economical favor in the supply chain for instance mana gement of raw material from supplier to manufacturer or service provider to customer with improvement of environmental and social impact.Nestle Recent News.Nestl to sell remaining Alcon shares to Novartis04 Jan 2010 Nestl S.A. has transfer the Alcon remaining 156,076,263 shares representing around 52% of the companys anesthetized and outstanding share to Novartis, accordance with the contract agreed on 6 April 2008.Moreover, the reason for transfer the control are gradually based on three issues for instance, the divestment of Alcon the initial IPO of 23.25% in 2002, the sale of 24.8% in 2008 and the function of the call option by Novartis. Alcon was acquired by Nestl in 1977 for USD 280 million.Nestl opens global RD Centre to develop new generation of biscuitsOn 05-Jan-2010 Nestl has open a Global RD effect in Santiago de Chile. The New RD Center will help to reduce the sugar and fat level in biscuits also it will include bioactive ingredients and more lighter without compromis ing the biscuit quality to improve health qualityNestl to acquire Kraft Foods frozen pizza businessNestle has showed the agree ness to acquired Kraft food frozen business in the US and Canada on 05-January, 2010 for USD 3.7 billion in cash, the reason for this acquisition is that US is the largest pizza market in the world about 37 billion USD and business includes brands California Pizza, DiGiorno, Tombstone, Jacks and Delissio, therefore this acquisition will provide a strong strategic pillar in the US and Canada where the company already established a leadership in dishes and hand held products such as Lean Cuisine, Buitoni, Lean Pockets, Stouffers and Hot Pockets then on 01 March 2010 after completion of closing conditions Nestl has concluded the acquisition of Kraft Foods frozen pizza According to Paul Bulcke, CEO of Nestl This acquisition transport together a selection of great US and Canadian brands and also enhances Nestls frozen food activities in North America where Nest l only had a minor presence until noBrandsNestl markets its products in 130 countries across the worldNestl manufactures around 10,000 different productsand employs some250,000 peopleNestl sells overa billion products every dayAround 3,500 people fromover 50 countries work inNestls worldwide profitsof 17 research, developmentand product testing centres.The Nestl look Centerin Switzerland is our majorthink-tank. Its a constantsource of new ideas andscientific knowledge thatfeeds the pipeline for allNestl products.It covers over 100 differentprofessional areas including nutritionalscience, the life sciences,raw materials, ingredientsand production processes.Appendix No 1 Article of AssociationsGeneralArticle 1 Article 2 Corporate name registered offices Duration and Purpose.This category is consisting of two sub category or bias in which they explain company name, company registration and company purposeShare Capital.Article 3 Share capitalArticle 3bis Conditional share capital.On this section it has been explained the share capital of Nestle which is 100 000 000 registered shares and the value of each is CHF0.10 is worthCHF 10 000 000 (ten million Swiss francs). Also explain the shareholder rights to subscribe the new share and also point out the board of director power to may limit or withdraw the shareholder right to subscribe for new shares.Article 4 Share certificates Dematerialised sharesThis article section has discussed the issue regarding registered shares or certificate. Moreover, it shows that valid certificate must be signed by two boards of directors, in case of cease shareholder have right to essential back the certificate at no cost.Article 5 Share registerThis section of article has explained Recoganisation request of shareholder for voting right is based on company Recoganisation furthermore, registered shareholder with voting rights must have account owner and the minimum limit for voting right is more than 5 % of the share also Board of Di rectors shall announce regulations relating to the registration of nominees to ensure compliance with these Articles of Association.III. Organisation of NestlArticle 6 Powers of the General MeetingThe firs article of this category has explained the power of General Meeting for instance The General Meeting of shareholder will discuss the article of association also elect and remove the member of the board and admire the consolidated annual financial report also take all decisions which is by law and or under the articles of Association.Article 7 Annual General MeetingThe Annual General Meeting held each year twice after the close of the financial year of Nestl.Article 8 Extraordinary General Meeting1 Extraordinary General Meetings convened by the Board of Directors on the request of shareholder whose holdings at least one tenth of the share capital.Article 9 Notice of General Meetings Agenda1 Extraordinary General Meetings convened by notice in the Swiss Official Gazette of Commerce with in twenty days before the date fixed also Shareholders may be informed by ordinary mail and allow one or more share holder whose combined represent at least 0.15 % of share capital allow request about the agenda of general meeting and made proposal .Article 10 Presiding officer MinutesThe secretary of the board kept the minutes of General Meeting also Chairman or any member of the Board of Directors shall preside and carry all procedural powers about General Meeting.Article 11 Voting rights ProxiesThis article will explain that each recorded share with voting rights confers oneVote also in General meeting with respect to own shares or represented in excess of 5% shall be counted as one share holder.Article 12 Quorum and decisionsThis article will discuss about the voting and decision qualification process for instance duly constituted General Meetings irrespective of the number of shareholders or by the Articles of Association or law, also shareholders elections and resolutio ns will be resolve by the majority of the shares represented.Board of DirectorsArticle 14 15 Number of Directors and Term of officeThe Board of Directors shall consist of at least seven members also board shall be elected for a three years by the General Meeting. Furthermore each year board renewed by rotation also board will establish new order of rotation in the case of increase or decrease of board of director.Article 16 Organisation of the Board RemunerationThis article explains about board of director responsibility for instance the selection of chairman and voice chairmen also define board regulation and assignment of responsibilities.Article 17 Powers of the Board in generalThis article define the general power of board director can conduct business to the extent that is not within the board regulation or general meeting.Article 18 Specific powers of the Boardthe section of article define the board of director power for instance the board regulation, accounting and financia l control, the appointment of new staff, the ultimate supervision, the preparation of business report , preparation of General meeting also the opening and closing of new and old branch office.AuditorsArticle 20 21 Number of Auditors Term of office and Rights and duties of AuditorsThe auditor shall appoint for a term of one year in General Meeting and will verify the annual financial statement of company and submits this report in the General Meeting.Nestle- Nespresso AAA sustainable quality programNestle has organised multi-stakeholder Programme in the coffee sector to introduce environmental, social and economical devotion in the supply chain for instance management of raw material from supplier to manufacturer or service provider to customer with improvement of environmental and social impact.TitleNestle Nespresso AAA sustainable quality program an investigation into the governance dynamics in a multi-stakeholder supply chain networkAuthor(s)Gabriela Alvarez, Colin Pilbeam, Ric hard WildingJournalSupply Chain Management An planetary JournalYear 2010 Volume 15 Issue2 Page 165 182DOI 10.1108/13598541011028769 publishing firm Emerald Group Publishing LimitedNOTABLE FACTSNestle is the top four water bottling companies in the world Moreover Nestle control one thirdly bottled water market in America and sell water under 70 different brands name. Nestle Claims that Bottled water sales contributes to the plastic waste chore on the contrary. Nestl has beencriticized for its selling of infant pattern in countries where potable water is scare also leading to reduction in breast feeding and increase risk of infants and also repeatedly sued for false advertising of its products and the impacts of its bottled water operations in different communities.according to a 2006 global survey of online consumers by the record Institute, Nestl has a reputation score of 70.4 on a scale of 1-100.THE MODE OF INTERNATIONAL OPERATION(Source Nestl Fact book, Nestl, 2007)MERGERS ACQUISITIONSKey Dates1866 Company Founded1905 Merger between Nestl and Anglo-Swiss Condensed milk Company1929 Merger with Peter, Cailler, Kohler Chocolats Suisses S.A.1947 Merger with Alimentana S.A. (Maggi)1969 Vittel (equity interest)1971 Merger with Ursina-Franck1974LOral (equity interest)1977 eruditeness of Alcon (2002 partial IPO)1985 Acquisition of Carnation1988 Acquisition of Buitoni-Perugina1988 Acquisition of Rowntree1992 Acquisition of Perrier1998 Acquisitions of San Pellegrino and Spillers Petfoods2000 Acquisition of PowerBar2001 Acquisition of Ralston Purina2002 Acquisition of Schller and Chef America2003 Acquisition of Mvenpick, Powwow and Dreyers2004 Acquisition of Valio (ice cream activities)2005 Acquisition of Wagner, Protika, MusashiJOINT VENTURESKey Dates1974 LOral1981 Galderma (joint venture with LOral)1990 Cereal Partners Worldwide (joint venture with General Mills)1991 Beverage Partners Worldwide (formerly CCNR) (joint venture with Coca Cola)2002 Dairy Part ners Americas (joint venture with Fonterra) Laboratories innov (joint venture with LOral)STRATEGIES ADOPTED TO REDUCE POLITICAL, OPERATIONAL AND ADMINISTRATIVE VULNERABILITIESCorporate Business Principles (International)(SourceNestl Corporate Business Principles Document, Third Edition, September 2004, Nestl S.A., Public Affairs.Nestl is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practicesNestls business objective, and that of management and employees at all levels, is to manufacture and market the Companys products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, business partners and the large number of national economies in which Nestl operatesNestl does not favor short-term profit at the set down of successful long-term business development, but recognizes the need to generate a healthy profit each year in order to maintain the stick out of our shareholders and the financial markets, and to finance investmentsNestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not existNestl believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organizationNestl is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucialNestl operates in many countries and in many cultures throughout the world.This rich diversity is an invaluable s ource for our leadership. No single document can capture every legal obligation that may be required in each of these countries. Indeed, there may be conflicting legal requirements. Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. If an adaptation of anything contained in Nestls Corporate Business Principles is construed as contrary to local laws, such interpretation should not be followed in that country.1. CustomerMeeting Consumers Needs Nestl aims to create value that can be sustained over the long term by meeting consumer needs for nutrition, enjoyment, and quality they can trust.Nestls Communication with consumers is based on the following Basic PrinciplesNestl consumer communication should reflect moderation in food consumption, and not sanction over-eating. This is especially important regarding children.Wherever possible, we should show children in healthy energetic pursuits and avoid the portrayal of an ina ctive lifestyle combined with gangrenous dietary patterns.3. Nestl consumer communication must be congruent with healthy, balanced diets. Our advertising must not imply the replacement of meals with indulgence or snack foods, nor kick upstairs heavy snacking.4. Nestl is committed to advertising to children in a way that does not undermine the authority, responsibility, or judgment of parents or care providers. It must not encourage pester power.5. Nestl advertising to children must not portray children in unsafe situations nor encourage them to accept invitations from people they do not know.6. Nestl consumer communication about health benefits of products must have a sound nutritional basis.7. Nestl consumer communication should not exploit violence, bad manners, or profanity. Its content must reflect good taste in a given country and culture. It should not depict attitudes that are discriminatory or offensive to religious, ethnic, political, cultural, or social groups.8. Nestl communications must not show or encourage the consumption of our products in a way that could be considered dangerous.2. Infant Health and NutritionWhen Henri Nestl developed his milk food for babies over 130 years ago, it saved the life of a baby who could not be breast-fed. Nestls invention responded to the need for a nutritionally safe choice to breast milk. Today, Nestl research and development creates high quality infant formula products for use when an alternative to breast milk is needed that is specifically nutritionally adapted. Nestl also offers superior complementary (weaning) foods.Henri Nestl also insisted that every mother able to breast-feed should do so. This principle is still the cornerstone of Nestl policy today, and is in line with the aim of the International(WHO) Code of Marketing of Breast-milk Substitutes, which was adopted by theWorld Health Assemblyin 1981.The International Code recognizes a legitimate market for breast-milk substitutes and provides recomme ndations to governments on how its marketing should be regulated. Therefore Nestl- encourages and supports breastfeeding as the best start in lifecarries out research and development aimed at the constant improvement of infant formula products for use when a safe alternative to breast milk is needed- ensures that its infant food marketing practices conform strictly to national legislation, regulations, or other measures taken by governments to give effect to the aim and principles of the International Code.In addition, in all developing countries, whether or not their governments have taken action to to the full implement the International Code, Nestl- gives detailed instructions to its staff on how to implement the International Code provides a summary of its policy for the information of employees and the public in the form of the Nestl Instructions, which is translated into many languages regularly conducts training of employees to ensure complete understanding of the Companys responsibilities under the International CodeCompany on potential non-compliance with the International Code in a confidential way, outside line management structures. In each country the designated ombudsman investigates and reports alleged violations of the International Code directly to a member of the Nestl S.A. Executive Committee at the Companys global headquartersNestl is a founding member of theInternational Association of Infant Food Manufacturers (IFM), which was formed to facilitate manufacture dialogue withWHOand governments, and to encourage responsible marketing standards for the infant food industryHuman RightsNestl fully supports theUnited Nations Global Compactstwo guiding principles on forgiving rights. Nestl therefore Supports and respects the protection of international human rights within its sphere of influence (Principle 1) and Ensures that its own companies are not complicit in human rights abuses (Principle 2)Nestl aims to provide an typesetters case of good human rights practices throughout its business activities and has an interest in encouraging the improvement of social conditions, which are an important factor for sustainable development. Nestl also recognizes that governments are ultimately responsible for the establishment of a legal framework for protecting human rights within their markets. Nestl expects each market to respect and follow the local laws and regulations concerning human rights practicesNestl fully supports theUnited Nations Global Compactsfour guiding principles on labor. Nestl therefore upholdsFreedom of association and the effective recognition of the right to collective bargaining (Principle 3) The excreting of all forms of forced and compulsory labor (Principle 4)The effective abolition of child labor (Principle 5)The elimination of discrimination in respect of employment occupation (Principle 6) Nestl also respects the local laws and regulations applicable to human resources in each of its markets. Hu man Resource Policy is also set by the local markets, which must follow local legal requirements. Nestl regards its personnel as its most valuable asset. Involvement at all levels starts with open communication, whether on specific aspects of the business, or about the activities of the Company in general. Suggestions for changes and proposals for improvements of Nestls practices are encouraged.