Risk Management
An Internal Audit Best Practice Case Study An interview with James Duckworth FCMA, Chief Internal Auditor, Unilever
In 1968 James Duckworth joined Unilever’s internal audit department. His first assignment abroad came in 1973 when he worked for Lever y Asociados in Argentina for two years. Returning to the UK as commercial director, United Agricultural Merchants, he then held the post as chairman of Unilever Merseyside Ltd. In 1984 he moved to Kenya as Vice Chairman Unilever East Africa and chief executive of a joint venture between the World Bank, CDC and Unilever – the Oil Crop Development Scheme. From Kenya, James Duckworth moved to Unilever's head office in Rotterdam in 1987 as SVP Finance of Ice Cream Worldwide. In 1993 he was head of Information Technology for Unilever world-wide, a post he held for six years until 1999 when he became Chief Auditor.
Unilever Unilever, owner of food, personal care and cleaning brands such as Birds Eye and Dove, is now the world’s third biggest packaged consumer goods company. It employs nearly 300,000 people and its 2001 sales exceeded $50 billion. The company has recently split into two global divisions, food and non-food, and plans to rationalise its huge portfolio of brands. Its two holding companies, Unilever Plc (UK) and Unilever N.V. (The Netherlands), have separate stock listings but share an identical board of directors with dual headquarters.
Bottom-up risk management What James Duckworth, chief auditor at Unilever, is looking for is ‘a canvas of unlimited scope’. His aim is to be as specific as he can in assessing and managing risk. But he also wants to ensure that nothing eludes the company. There are some basic principles underlying this approach. ‘We look at the major risks’, he said. ‘But we increasingly take an attitude that the aim of an enterprise culture is to create change and be innovative’. And to achieve this another attitude needs to be nourished. ‘We work in a spirit of “no limits”’, he said. ‘The auditors should not be restricted in any way in what they say or what they investigate. That gives us a canvas of unlimited scope’. That might sound as though it is an undisciplined approach. This is not so. ‘We are very selective in what we look at’, said Duckworth. ‘There is no use in having reports on a scatter-gun approach’. To achieve this selective but effective approach Unilever has to see the process as one running throughout its organisational hierarchy. ‘We need to give major recommendations to the board which have been consistently researched through the group’, he said. This is the sort of approach which has revolutionised internal audit in recent years. The days when the function of an internal audit department was to say to itself that there were 500 units in the organisation to look at over the next five years and then to proceed to plod through the process are over.
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