Corporate Governance

2011 ERG Sustainability Tree - Corporate Governance

In order to ensure lasting sustainability the governance system of an entity as complex as a company must obey two fundamental criteria: solidity and flexibility. The first is ensured by identifying clear rules and procedures, the balanced breakdown of powers and delegation and the implementation of process monitoring and control mechanisms.

Flexibility, meanwhile, enables an organisation to evolve responding quickly and effectively to the need for change typical in modern economies.
Solidity and flexibility are ensured through Corporate Governance capabilities and activities including statutory bodies and board committees that adhere to formalised procedures when performing their duties.

The Statutory Bodies are:
- the Board of Directors: 1 Chairman, 1 Deputy Chairman, 1 Chief Executive Officer and nine Directors, of which four are independent, two  are non-executive and
three are executive. There is also an Honorary Chairman;
- the Board of Statutory Auditors, 1 Chairman, 2 regular members and three substitute members;
- the Shareholder’s Meeting.

The Board Committees include:
- the Internal Control Committee, 1 Chairman and two members;
- the Strategic Committee, 1 Chairman and four members;
- the Nominations and Remuneration Committee, 1 Chairman and two members.

» Appointment of Directors

Directors are appointed based on lists presented by Shareholders which, supplemented with information on the personal and professional characteristics of the candidates and an indication of whether they meet the independence requirements, must be filed at least 25 days prior to the Shareholder’s Meeting.
In accordance with CONSOB regulations, only shareholders who alone, or together with other shareholders, represent at least 2% of the share capital may present the lists. Each shareholder may present or be involved in the presentation of just one list and each candidate may only feature in one list.
All candidates must possess the requisites of honourability established for members of the Supervisory Bodies by he laws in force, as well as the professional requisites demanded by the role.
All Directors, with the exception of one, are appointed from the list that receives the majority of votes. The remaining position is appointed from the minority list that obtained most votes. In the event of the presentation of just a single list, the Directors are elected from the list presented.
All those that possess at least one share may vote.
In accordance with the Articles of Association voting can only be carried out in person or by proxy, with no forms of electronic voting from remote locations currently supported. The Board of Directors meets at least once a quarter to inform the Board of Statutory Auditors on the Group’s activities and on the most important business, financial and capital transactions undertaken by the company or its subsidiaries and particularly those where there may be a potential conflict of interest.

» The Internal Control Committee

Made up of three Independent Directors, the Internal Control Committee advises and issues recommendations to the Board of Directors and fulfils the role and responsibilities indicated in the Corporate Governance Code.
In carrying out its functions, the Committee has wide access to corporate information and departments. Its members have adequate experience in accounting and finance.
The Chairman of the Board of Statutory Auditors or another Statutory Auditor contribute to the Committee’s work.
Depending on the topics covered at any given time, the Chairman of the Board of Directors, the CEO and the Corporate General Manager, as well as Group management representatives, employees and representatives of the auditing firm and other subjects, may also take part.
The head of Internal Audit is invited to participate in meetings to inform the Committee, at least once a quarter, on activities carried out and those on the agenda.

» The Strategic Committee

The Strategic Committee advises and issues recommendations to the CEO and the Boards of Directors of the holding and operating companies.
In accordance with strategies and policies approved by the Board of Directors, it defines strategic business and portfolio guidelines as well as policy guidelines on strategic finance and individual extraordinary finance operations, monitoring the progress of their implementation over time.
The Committee also examines, as a precautionary measure, the multi-year strategic plans and investment budgets of the Group and the operating companies, as well as significant investments, evaluating their congruity in terms of Group strategy.

» The Nominations and Remuneration Committee

Composed of three independent directors, this Committee makes recommendations
to the Board regarding the remuneration of the CEO and directors that cover specific roles. At the CEO’s request, it also makes recommendations concerning the pay policies
for the company’s senior management and the Group’s management incentive scheme.
The Chairman, the CEO and the Corporate General Manager also contribute to the work of the Committee. When the Committee discusses proposals for the remuneration of the Chairman and the CEO, these two figures are not present at the meeting.
During the 2011 financial year the Committee held 10 meetings.
It is very important to underline that, upon the proposal of the Nominations and Remuneration Committee, on 10 December 2011 the Board of Directors
approved the new “Policy of remuneration of the members of the Board of Directors, the General Manager and other Executives with strategic responsibilities”, which will be applied as of 2012.