Governance Information • Mar 30, 2020
Governance Information
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pursuant to article 123-bis of the Consolidated Law on Finance
(2019 Financial Year)
Traditional administration and control model
Issuer: BIESSE S.p.A. Web site: www.biessegroup.com
Financial year to which the Report refers: 1 January 2019 – 31 December 2019 Date of approval of the report: 13 March 2020
| GLOSSARY 4 | ||||||
|---|---|---|---|---|---|---|
| 1. | ISSUER PROFILE 5 | |||||
| 2. | OWNERSHIP INFORMATION (at 31/12/2019) 6 | |||||
| a) | Share capital structure 6 | |||||
| b) | Restrictions on the transfer of securities 6 | |||||
| c) | Significant equity investments in the share capital 6 | |||||
| d) | Securities that grant special rights 7 | |||||
| e) | Employee share ownership: mechanism to exercise voting rights 7 | |||||
| f) | Restrictions on voting rights 7 | |||||
| g) | Shareholder agreements 7 | |||||
| h) | Change of control clauses and provisions of the Articles of Association concerning take-over bids 7 |
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| i) | Powers of attorney to increase share capital and authorisations for the acquisition of treasury shares 8 |
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| l) | Management and co-ordination 8 | |||||
| 3. | COMPLIANCE 8 | |||||
| 4. | BOARD OF DIRECTORS 9 | |||||
| 4.1 | APPOINTMENT AND SUBSTITUTION 9 | |||||
| 4.2 | COMPOSITION 10 | |||||
| 4.3 | ROLE OF THE BOARD OF DIRECTORS 14 | |||||
| 4.4 | AUTHORISED BODIES 17 | |||||
| 4.5 | OTHER EXECUTIVE DIRECTORS 19 | |||||
| 4.6 | INDEPENDENT DIRECTORS 19 | |||||
| 4.7 | LEAD INDEPENDENT DIRECTOR 20 | |||||
| 5. | PROCESSING OF CORPORATE INFORMATION 20 | |||||
| 6. | BOARD COMMITTEES 21 | |||||
| 7. | APPOINTMENTS COMMITTEE 21 | |||||
| 8. | REMUNERATION COMMITTEE 21 | |||||
| 9. | REMUNERATION OF GROUP DIRECTORS AND TOP MANAGEMENT 22 | |||||
| 10. | CONTROL AND RISK COMMITTEE 23 | |||||
| 11. | INTERNAL CONTROL SYSTEM 24 | |||||
| 11.1 | EXECUTIVE DIRECTOR IN CHARGE OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 25 |
| 11.2 | INTERNAL AUDIT MANAGER 25 | |||||
|---|---|---|---|---|---|---|
| 11.3 | ORGANISATIONAL MODEL PURSUANT TO LEGISLATIVE DECREE 231/2001 AND THE CODE OF CONDUCT 26 |
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| 11.4 | INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 28 | |||||
| 11.5 | INDEPENDENT AUDITORS 30 | |||||
| 11.6 | FINANCIAL REPORTING OFFICER 30 | |||||
| 11.7 | COORDINATION AMONG THOSE INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 31 |
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| 12. | INTERESTS OF DIRECTORS AND RELATED-PARTY TRANSACTIONS 31 | |||||
| 13. | APPOINTMENT OF STATUTORY AUDITORS 32 | |||||
| 14. | COMPOSITION AND FUNCTIONING OF THE BOARD OF STATUTORY AUDITORS (pursuant to article 123 bis(2)(d) and (d-bis) of the TUF) 33 |
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| 15. | SHAREHOLDER RELATIONS 35 | |||||
| 16. | SHAREHOLDERS' MEETINGS 35 | |||||
| 17. | ADDITIONAL CORPORATE GOVERNANCE PRACTICES AND LETTER OF 19 DECEMBER 2019 SENT BY THE CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE TO THE CHAIRMEN OF THE BOARDS OF |
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| DIRECTORS OF LISTED COMPANIES 36 | ||||||
| 18. | CHANGES AFTER THE CLOSE OF THE FINANCIAL PERIOD 37 | |||||
| 19. | SUMMARY TABLES 37 | |||||
| TABLE 1 38 | ||||||
| INFORMATION ON THE OWNERSHIP STRUCTURE 38 | ||||||
| TABLE 2 39 | ||||||
| STRUCTURE OF THE BOARD OF DIRECTORS AND THE COMMITTEES 39 | ||||||
| TABLE 3 40 | ||||||
| STRUCTURE OF THE BOARD OF STATUTORY AUDITORS 40 |
Biesse or the Issuer or the Company: Biesse S.p.A., with its registered office at 16 Via della Meccanica, Pesaro
Code/Corporate Governance Code: the Corporate Governance Code for listed companies approved in July 2018 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria
Civil Code/CC: the Italian Civil Code
Board: the Issuer's Board of Directors
Financial year: the financial year to which the Report refers
Group or Biesse Group: collectively, the Issuer and its subsidiaries as per article 93 of the Consolidated Law on Finance
Long-Term Incentive 2018-2020: the "Long-Term Incentive 2018-2020 of Biesse S.p.A." submitted for the screening and approval of the Remuneration Committee on 11/05/2018 and available on the company's website
Consob Issuers' Regulations: the Regulation issued by Consob with Resolution No. 11971 of 1999 (as amended) on issuers
Consob Market Regulations: the Regulation issued by Consob with Resolution No. 20249 of 2017 on markets
Consob Related Party Regulations: the regulations issued by Consob with resolution no. 17221 of 12 March 2010 (as amended) concerning transactions with related parties
Report: this corporate governance and ownership report is required under article 123-bis of the TUF
TUF or Consolidated Law on Finance: Italian Legislative Decree No. 58 of 24 February 1998, and subsequent amendments and additions thereto
Biesse Group operates in the market of machines and systems for processing wood, glass/stone and advanced materials. The Group offers modular solutions ranging from the design of "turnkey" systems for large-scale furniture manufacturers to individual automatic machines and work centres for small and medium businesses, up to the design and sale of individual high-tech components.
A multinational company with factories in Italy, India and China, today the Biesse Group markets its products through a network of subsidiaries and 39 branches located in what are considered to be strategic markets. The branch offices ensure specialised after-sales service to customers, while also carrying out market research aimed at developing new products.
Biesse Group's mission is to provide technological solutions for the processing of wood, glass, marble and advanced materials with every-day uses, for companies associated with the furniture industry; as a global partner, provide reliable, cutting-edge solutions in addition to a specialist after-sales service that is quick, efficient and effective.
All the activities carried out by the Group are carried out with an awareness of its moral and social responsibility towards all its stakeholders (employees, shareholders, customers, suppliers, communities, commercial and financial partners, institutions, trade associations, union representatives, etc.), in the belief that the achievement of the Group's objectives (the first of which is to give added value to shareholders, customers and the community in which it operates) must be accompanied, not only by respect for specific company values, but also by compliance with current regulations and the general duties of honesty, integrity, fair competition, fairness and good faith.
Biesse shareholders exercise their rights through shareholders' meetings. Decisions taken at shareholders' meetings in compliance with law and the Articles of Association are binding on all shareholders, including those that dissent or abstain from voting. Ordinary and extraordinary shareholders' meetings and shareholder decisions are valid where the quorum, voting majorities and other statutory requirements set out in existing laws are satisfied.
The Company has adopted a traditional governance and control model, consisting of a Board of Directors, a Board of Auditors, and an independent auditor.
The Board of Directors is vested with all powers of ordinary and extraordinary administration. As such, it plays a central role in the Company's corporate governance. The Board has set up a Committee for the remuneration of Directors and an Audit and Risk Committee and a Related Parties Committee.
The Board of Auditors oversees compliance with the law and the Articles of Association and is responsible for monitoring the management of the Company.
As required by law, an independent auditor appointed by the shareholders and registered with Consob is responsible for the auditing of accounts.
Further on in this Report, a detailed description is provided of the role, responsibilities, composition and operation of each of the aforementioned governance bodies.
c) Information on the acquisition and maintenance of the SME status
The Issuer falls within the parameters identified by article 1, paragraph 1, letter w-quater 1) of the TUF and by article 2-ter of the Consob Issuers' Regulation. On 21 December 2018 the Company submitted to Consob the information relating to its qualification as an SME, specifying the value of its capitalisation and turnover, as prescribed by resolution No 20621 of 10 October 2018. During the Financial year, the Company did not issue a new communication, having maintained its SME status.
| tax identification number |
company name | year end date if different from 31/12 |
first financial year | average capitalisation 2018* |
average capitalisation 2019* |
2018 turnover** | 2019 turnover** | turnover breakdown 2018** |
turnover breakdown 2019** |
|---|---|---|---|---|---|---|---|---|---|
| 113220412 | Biesse S.p.A. | / | 2014 | 967.600,00 | 412.700,00 | 741.500,00 | 705.900,00 | 686,799 (sales of goods) | 644,164 (sales of goods) |
| 52,524 (provision of services) |
60,328 (provision of services) |
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| 2,204 (sundry revenues) | 1,379 (sundry revenues) |
* To be completed only for the years/financial years corresponding with and subsequent to the starting date
** For companies that have completed the financial year and approved the related accounting data in the current year, the 2017 turnover refers to this last year. In this instance the turnover for the years 2016-2014 relates to the turnover for the three preceding financial years
The share capital, totalling €27,393,042 is fully paid up and divided into the same number of registered, ordinary shares with a par value of €1 each.
| SHARE CAPITAL STRUCTURE | ||||
|---|---|---|---|---|
| No. of shares |
% of share capital. |
Listed/Not listed | Rights and obligations | |
| Ordinary shares |
27,393,0421 | 100% | Listed on the MTA, STAR segment |
The shares are registered, freely transferable, indivisible, and each of them gives the right to one vote at the ordinary and extraordinary shareholders' meetings of the Company in accordance with the law and the Articles of Association (except for what is provided for in the Articles of Association on the increase of the voting right) and attribute the additional administrative and property rights provided for by law for shares with voting rights. |
As at the date of this report, the Issuer had not issued any financial instruments convertible or exchangeable for shares.
The Company has not approved capital increases to service share-based incentive plans. The new long-term incentive plan called "Long-Term Incentive 2018-2020 of Biesse S.p.A." was approved by the Remuneration Committee on 11 May 2018. This plan provides for the payment of cash awards to the beneficiaries subject to the achievement of the Company's economic and financial objectives, therefore, not providing for the allocation of shares, pursuant to article 114-bis of the TUF, a resolution of the Shareholders' Meeting in this regard was not necessary, since a resolution of the Issuer's administrative body was deemed sufficient (14 May 2018).
There are no restrictions of any kind on the transfer of Company securities.
c) Significant equity investments in the share capital
At 31 December 2019, shareholders holding more than 5% of the subscribed share capital in the form of voting stock, as confirmed by the share register and disclosures received in accordance with article 120 of the TUF and other available information, are listed in the table below:
| Declarant | Direct shareholder |
% of ordinary share capital |
% of voting share capital |
|---|---|---|---|
| Selci Giancarlo | Bi.Fin S.r.l. | 51% | 51% |
| Allianz Global Investor Gmbh |
Allianz Global Investor Gmbh |
5,026 % | 5,026 % |
The Issuer has not issued instruments that confer special rights.
During 2018, the Issuer proposed the introduction of shares with increased voting rights in order to achieve, on the one hand, the stabilisation of control and, on the other, a shareholding that is more active in the management of investments and less attentive to speculative logics and short termism.
The proposal, submitted to the Shareholders' Meeting held on 24 April 2018, was accepted with a vote in favour and led to the modification of article 6 of the Articles of Association, with the introduction of the ad hoc regulation of shares with increased voting rights, an extract of which is available on the Issuer's website www.biessegroup.com, in the section Investor Relations/Increased voting right. As a consequence, the Issuer has also fulfilled the obligation of maintaining a register of shares with increased voting rights, in which the shareholders who request it will be registered. The setting up of the register was ratified by a resolution of the Board of Directors on 14 May 2018 and its management was assigned to a third-party company by way of outsourcing.
As of the date of this report, only the shareholder Bi.Fin. Srl had applied to be entered on the list to be eligible for the increased vote rights, for its entire shareholding (amounting to 13,970,500 shares). A corresponding entry in the list took place on 18 May 2018. After 24 months from the date of registration, the voting rights of the shares registered on the list will be eligible for the increase, subject to notification by the depositary intermediary.
e) Employee share ownership: mechanism to exercise voting rights
The Issuer has not adopted any system of employee participation in its share capital or share-based incentive plans.
There are no restrictions on the voting rights attaching to ordinary shares. The Issuer has issued ordinary shares only. During 2018, shares were introduced having increased voting rights (cf. paragraph d) above).
To the Company's knowledge, no shareholder agreements have been made pursuant to article 122 of the TUF.
During 2018, the Issuer signed an agreement with BNL Group BNP Paribas for a medium-long term bilateral loan up to a maximum of €50 million, usable both for the ordinary and extraordinary activities (growth by external lines) of the Issuer.
The aforementioned agreement provides, as a result of the change of control clause contained therein, for the right of withdrawal on the part of the credit institution if Giancarlo Selci ceases to hold, directly or indirectly, 51% of the shares with the right to vote in the ordinary and/or extraordinary shareholders' meeting or, equally, in the event that Giancarlo Selci ceases to control Biesse.
The Articles of Association of the Company do not provide for waivers of the provisions of article 104, paragraphs 1 and 1-bis of the TUF or application of the neutralisation rules provided for by article 104-bis, paragraphs 2 and 3 of the TUF.
i) Powers of attorney to increase share capital and authorisations for the acquisition of treasury shares
No authorisation has been given to the Board of Directors to increase the share capital in accordance with article 2443 of the Civil Code, or to issue equity instruments.
The Issuer is controlled by Bi.Fin S.r.l., which in turn is not controlled, as defined by article 93 of Legislative Decree No 58/1998, by any legal entity. The Issuer is managed and co-ordinated by its controlling shareholder Bi.Fin S.r.l.
As required by article 2497-bis of the Civil Code, all the Italian subsidiaries controlled directly by the Issuer have disclosed that they are managed and co-ordinated by the Issuer.
♦ ♦ ♦
The information required by article 123-bis(1)(i) and (l) is illustrated, respectively, in the Remuneration Report published pursuant to article 123-ter of the TUF and in the section of this Report on the appointment and replacement of directors (Section 4.1).
The Issuer has adhered to the "Corporate Governance Code for Listed Companies". The Code can be accessed by the public on the website of the Corporate Governance Committee at https://www.borsaitaliana.it/comitatocorporate-governance/codice/codice.htm. This Report indicates whether the Company has decided not to implement specific recommendations contained in the Code, highlighting the reasons for the failure to comply with it and providing information on the process that led to the decision to deviate from it and any alternative course of conduct adopted.
In compliance with article 123-ter of the TUF and article 6 of the Corporate Governance Code, also taking into consideration what is stated in the Recommendations of the European Commission No 2004/913/EC, 2005/162/EC and 2009/385/EC, the Company has adopted a general Remuneration Policy (which will be referred to in point 9 below).
With a view to protecting its values and to compliance in general, the Company has also decided to adopt an Antitrust Handbook (which will be referred to in point 5 below).
The Issuer's corporate governance system complies with the principles identified by the Code. Together, these principles form the cornerstone of the Company's corporate governance policy, namely:
The Issuer's key corporate governance documents are:
In order to promote the market's broader knowledge of the governance model adopted by the Issuer, the documents indicated above (with the exception of the ICFR model) are available online (in Italian and English) on the website www.biessegroup.com, Investor Relations/Corporate Governance section.
The Issuer and its strategic subsidiaries are not subject to non-Italian laws that may in any way influence the Issuer's corporate governance structure.
Directors are appointed through a transparent procedure, designed to guarantee that timely and suitable background information on candidates is provided. As required by article 16 of the Articles of Association, nominations for the office of Director include exhaustive information on the personal and professional characteristics of the candidates, along with an indication of whether they satisfy independence criteria.
Directors are appointed through the "voting list" mechanism: the Company introduced the obligation to file the lists at the company headquarters no later than the 25th day prior to the date set for the Shareholders' Meeting and to make these available to the market, with the methods set forth by law and by Consob in its Regulation, at least 21 days prior to the Shareholders' Meeting.
The Articles of Association lay down that Shareholders have the right to present these lists only if, on their own or together with other Shareholders, they represent at least 2.5% (two point five percent) of the share capital or if they hold a different minimum number of shares as established by Consob in its Regulations (it should be noted in this regard that, pursuant to Consob Executive Resolution No. 28 of 30 January 2020, the minimum percentage established by Consob for the 2020 financial year is 2.5%).
No Shareholder may submit or participate in submitting more than one list, by proxy or by fiduciary company. Every vote holder may vote on only one list.
Members of the Board of Directors are elected through the following procedure:
a) all the directors to be elected, minus one, are selected from the candidate list which obtains the highest number of shareholder votes, based on the sequential order in which they appear in the list;
b) the first name on the candidate list which obtains the second highest number of shareholder votes is selected as the remaining director to be elected.
The first candidate on the candidate list obtaining the highest number of shareholder votes is appointed Chairman of the Board of Directors.
Where only one candidate list is filed or voted for, all the candidates on the list are appointed to the Board.
In the absence of a list, the Board of Directors is appointed by a Shareholders' Meeting with the majorities laid down by Italian law.
There are no specific mechanisms to ensure election of the minimum number of independent directors required by article 147-ter, paragraph 4 of the TUF, nor do the Articles of Association provide for requisites of independence for directors other than those required therein.
At the meeting held on 20 December 2019, the Board of Directors approved the so-called Succession Plan Policy, which provides that, in case of urgency (meaning the sudden incapacity of the Chief Executive Officer for any reason), the Board of Directors defines powers and proxies to ensure ordinary and extraordinary management during the transitional period.
In particular, it is provided that the Board of Directors:
(i) calls an emergency meeting of the so-called Succession Committee, consisting of the Group Chairman, the Chief Organization & HR Officer, the Chief Financial Officer and the Group General Manager. This Committee, on the one hand, is called upon to play a proactive and managerial role in relation to any extraordinary transactions deemed to be unable to be postponed and, on the other, to guarantee the ordinary management and operational decisions of normal responsibility of the Chief Executive Officer. The Succession Committee will be conferred the same powers as the Chief Executive Officer;
(ii) identifies a person (preferably a director) within the Succession Committee who will play the role of liaison between the Committee and the company structures and will manage external and internal communication;
(iii) assess whether, for operational management, to temporarily extend the powers for ordinary activities, within the limits of the approved budget.
This Committee, with the aid of the Remuneration Committee, will evaluate (internal and external) candidates and submit a shortlist of candidates for the final selection to the Board of Directors. At the end of the process, the Board of Directors will co-opt the most suitable candidate and confer operational powers and proxies on the same.
Under article 16 of the Articles of Association, the number of members of the Board of Directors may vary between a minimum of two and a maximum of fifteen directors, who may be either shareholders or nonshareholders, as determined by the Shareholders' Meeting.
The Board in office at 31 December 2019, is composed of eight members, including 4 members belonging to the less represented gender. The mandates of all the directors in office expire with the approval of the financial statements at 31 December 2020. Seven of the eight members were appointed by a resolution of the Shareholders' Meeting of 24 April 2018 on the basis of (i) the list presented by the majority shareholder Bi.Fin. Srl, which was voted for by shareholders representing 13,970,500 shares equal to 51% of the share capital and (ii) the minority list jointly presented by the shareholders who were in no way related to the majority shareholder: "Aletti Gestielle SGR S.p.A." fund manager: Gestielle Pro Italia; Amundì Asset Management SGR.p.A., fund manager of: Amundi Valore Italia PIR and Amundi Dividendo Italia; Arca Fondi SGR S.p.A., fund manager of Arca Economia Reale Equity Italia; Eurizon Capital S.A., fund manager of: Eurizon PIR Italia 30, Eurizon Azioni Italia, Eurizon Progetto Italia 70, Eurizon Azioni PMI Italia, Eurizon PIR Italia Azioni, Eurizon Progetto Italia 20 and Eurizon Progetto Italia 40; Eurizon Capital S.A., fund manager of: Eurizon Fund - Equity Italy and Eurizon Fund - Equity Small Mid Cap Italy; Fideuram Asset Management (Ireland) fund manager of Fonditalia Equity Italy; Fideuram Investimenti SGR S.p.A., fund manager of: Piano Azioni Italia, Piano Bilanciato Italia 50 and Piano Bilanciato Italia 30 and Mediolanum Gestione Fondi fund manager of Mediolanum Flessibile Futuro Italia, which was voted for by shareholders representing 7,913,565 shares, equating to 28.8% of the share capital..
Subsequently, during the meeting held on 30 April 2019, the Shareholders' Meeting deemed it necessary to resolve in favour of increasing the number of members of the Board from seven to eight, through the appointment of Mrs. Silvia Vanini.
The need to include Mrs. Vanini on the Board had already been submitted by the CEO to the Board of Directors at the Board meeting of 15 March 2019 and approved by same.
The proposed resolution was approved by the Shareholders' Meeting with a majority of 76.75% of the share capital.
The Board of Directors had five executive directors as at 31 December 2019:
Roberto Selci, CEO;
Alessandra Parpajola, Director;
There are three independent non-executive directors as per the TUF and the Code:
| Term served by Directors since their initial appointment | ||||
|---|---|---|---|---|
| Directors | Date of initial appointment | Total number of years in office | ||
| Roberto Selci | 2000 | 19 | ||
| Giancarlo Selci | 1994 | 25 | ||
| Alessandra Parpajola | 2005 | 14 | ||
| Stefano Porcellini | 2006 | 13 | ||
| Silvia Vanini | 2019 | / | ||
| Righini Elisabetta | 2015 | 4 | ||
| Giovanni Chiura | 2018 | 1 | ||
| Federica Palazzi | 2018 | 1 |
Brief information is reported below on the personal and professional backgrounds of the individual members of the Board of Directors.
Roberto Selci, born in Pesaro on 18/04/1960, joined the Biesse Group in 1988. Initially holding various Sales/Marketing roles in the Company's Asian and US branches, he eventually went on to promote the internationalisation of the Biesse Group in subsequent years. Roberto Selci is the son of Giancarlo Selci, the Company's founder.
Giancarlo Selci, born in Pesaro on 02/01/1936, is the Company's founder. Awarded the honours of Ufficiale e Cavaliere del Lavoro, he has always been actively involved in all Biesse operations. It has been under his guidance that the Group has grown steadily in size to reach international proportions, becoming a leading multinational in the sector.
Alessandra Parpajola was born in Dolo, Venice, on 12/06/1973. After graduating in Business Economics from Bocconi University in Milan, she began her career working for the family business. Parpajola joined Biesse in September 2003 in the role of Credit Manager. Married to Roberto Selci, she co-ordinates the Group's risk management activities and actively participates in the management of all the main head office departments and areas.
Stefano Porcellini was born in Rimini on 23/11/1965. He graduated from Bocconi University in Milan with a degree in Business Economics, majoring in Finance. He began his career in Accenture, where he worked in Financial Markets for five years. He joined the Group in 1995, initially as Head of the Branch Division. In 1999 he became Biesse Plant Manager, before being transferred in 2001 to manage the Company's public float and stock exchange listing. He then became head of the Wood Division, and in October 2003 Group Chief Financial Officer in charge of administration, finance and control. In November 2006 he was appointed to the Board of Directors of Biesse. Subsequently, in 2012, he took on the role of Chief Operating Officer.
Silvia Vanini, born in Lecco on 11 July 1952, she graduated in Clinical Psychology at the University of Padua and subsequently obtained a doctorate at the Escuela Superior de Psicodrama (Mexico).
During her career she has worked with top managers of international companies, helping them to expand and strengthen their sphere of influence and performance through the development and implementation of people management strategies and change management plans.
Prior to her experience at Mercer, a company where she worked from 2011 to 2019 and where she was a Partner, Talent Strategy Leader and member of the Leadership Team in Italy, she had several experiences as HR consultant and top executive in the Human Resources department.
In Biesse since April 2019, she is Chief Organization & HR Officer.
Elisabetta Righini, Independent Director, was born in Forlì on 25/03/1961. She studied at the University of Bologna where she graduated in Law. She has had a brilliant university teaching career, becoming Director of Commercial Law and Financial Markets at the School of Economics at the University of Urbino, Commercial Law at the Fano campus of the School of Economics at the University of Urbino, and Commercial Law (first and second module) at the Law School at the University of Urbino. Author of a numerous legal and economic publications, since April 2013 she has been an Independent Director of Unipol Gruppo S.p.A. Until April of that year, she was also a member of the Control and Risk Committee, the Related Parties Committee and the 231 Supervisory Body. From May onwards she was also a member of the Related Parties Committee and the Appointments and Corporate Governance Committee.
As at 31/12/2019, Prof Righini did not own any Issuer shares.
Giovanni Chiura, born in Turin on 06/07/1965, Independent Director, holds a degree in Economics and Commerce from the Economics Faculty of the University of Turin. He currently holds the position of CFO of the company Sorgenia S.p.A., where he was also an Advisor to the Board of Directors from February 2014 to March 2015. During the course of the year, he was a member of the Board of Directors of the main subsidiary companies, including Tirreno Power S.p.A., Sorgenia Power S.p.A. and Sorgenia Puglia S.p.A. Mr Chiura held no shares in the Issuer as at 31/12/2019.
Federica Palazzi, born 28/01/1979, Independent Director, she graduated in Business Economics from the University of Urbino and is currently a researcher at the Department of Economics, Society and Politics of the Carlo Bo University of Urbino as well as Professor of Programming and Monitoring at the School of Economics (Fano site) of the Carlo Bo University of Urbino. In 2015 she won the "Best Junior Contribution to the Intangibles and IC Theory and Practice Award" from the European Institute for Advanced Studies in Management - EIASM, she is currently engaged in prestigious research projects also in collaboration with other universities nationally and internationally, and is the author of numerous economic-financial publications. As at 31/12/2019 Ms Palazzi did not possess any Issuer shares.
For all members of the Board of Directors, the assessments of their integrity and professionalism as required by current legislation were carried out at the Board meeting of 02 August 2019. More specifically, the members of the Board of Directors meet the integrity requirements 1under article 148(4) of the TUF and the Regulation adopted by Decree No. 162 of the Ministry of Justice of 30 March 2000.
At the meeting of 02 August 2019, the directors Giovanni Chiura, Elisabetta Righini and Federica Palazzi confirmed that they fulfilled the independence requirements laid down in article 147-ter(4) of the TUF and the Corporate Governance Code.
Unless otherwise stated in the personal information relating to the Directors, none of the members of the Board of Directors has any personal ties as referred to in Book I, Title V of the Civil Code with other members of the Board of Directors, nor between them and the members of the Board of Statutory Auditors of the Issuer or executives and other persons in a strategic role.
At its meeting of 12 May 2017, the Board of Directors resolved not to set general criteria on the maximum number of offices directors may hold on the boards of directors and auditors in other companies considered compatible with the effective running of the Board of Directors of the Company, considering this assessment to be primarily the responsibility of Shareholders in designating directorships and subsequently, of each director in accepting the appointment. However, if the Board deems it to be appropriate based on the information received from the directors (and in light of the body's self-assessment process), it may carry out a check on it using primarily the following evaluation criteria: (i) the role of Director in the Company (executive, non-executive, independent, member of one or more committees); (ii) the nature and size of the organisation in which the positions are held and the role of the Director in these organisations (with regard to, among other things, the organisation's corporate purpose, the governance structure, the number of meetings the director must attend as a result of his role, the responsibilities assigned to the directors, and any other mandates; (iii) whether these organisations are related to the Issuer's group. In any case, it should be noted that at the meeting held on 02 August 2019 the adequacy of the time available to the members of the Board of Directors was positively verified on the basis of the results of the Time Commitments of each director, on the basis of which the Board is called upon to assess whether each of its members, in the light of all the professional activities normally carried out in addition to the office of Director of Biesse S.p.A., has the necessary time to devote to the management of the company itself.
In addition and with regard to the self-assessment of the body, during the Financial year a process was initiated, which will be discussed in paragraph 4.3 below.
Subsequent to the appointment of the Board of Directors and the Board of Statutory Auditors in 2018, it was also deemed appropriate to hold a board induction session during the financial year in which the members of the Board of Directors and the Board of Statutory Auditors were involved.
The board induction sessions, in accordance with the provisions of the Corporate Governance Code, are aimed at providing directors and statutory auditors (as well as the Issuer's top managers) with adequate knowledge of
1 Article 2 of Decree No. 162 of the Ministry of Justice of 30 March 2000: 1. The office of statutory auditor of the companies referred to in article 1(1) may not be held by persons who: a) have been subjected to preventive measures ordered by a judicial authority pursuant to Law No. 1423 of 27 December 1956, or Law No. 575 of 31 May 1965, as amended, unless their conviction is spent; (b) have been sentenced to one of the following by a final court ruling, unless their conviction is spent: 1) a custodial sentence for one of the offences under the laws on banking, financial and insurance activities and the laws on markets and financial instruments, tax and payment instruments; 2) imprisonment for one of the offences provided for in Title XI of Book V of the Italian Civil Code and Royal Decree No. 267 of 16 March 1942; 3) imprisonment for a period of not less than six months for a crime against the public administration, public faith, property, public order or the economy; 4) imprisonment for a period of not less than one year for any offence with criminal intent. 2. The office of statutory auditor in the companies referred to in article 1(1), may not be held by anyone subject, at the request of the parties, to one of the penalties provided for in paragraph 1(b), unless the offence has been extinguished.
the business sector in which the Issuer operates, the company dynamics and their evolution, as well as the regulatory or self-regulatory framework of reference.
In particular, on 14 May 2019, the Board approved the adoption of an induction programme concerning disclosure obligations and Insider Trading regulations addressed to the Board itself and to the members of the Board of Statutory Auditors.
This training took place in October 2019, in a single training session conceived and conducted by the DLA Piper firm.
With reference to the composition of the Board in office at 31 December 2019, the Board of Directors did not consider it appropriate to adopt diversity policies with regards to matters such as age and educational and professional background, considering this assessment to be primarily the responsibility of the Shareholders in designating directorships and, subsequently, of each director in accepting the appointment; in terms of gender diversity, the Issuer applies the provisions of articles 147-quater and 148 of the TUF (based on the provisos prior to the amendment of Law no. 160 of 27 December 2019) and half of the Board of Directors in office at 31 December 2019 consists of directors of the less represented gender.
It should be noted that with regard to gender requirements for corporate bodies, Law 160 of 27 December 2019 (2020 Budget Law) amended articles 147-ter and 148 of the TUF, which extended the related obligations for six consecutive terms and increased the number of directors and statutory auditors of the least represented gender that must be elected to corporate bodies from 1/3 to 2/5. Issuers already listed are required to comply with these new proportion provisions as from the renewal of the bodies after the entry into force of the new provision (i.e. subsequent to January 2020). Therefore, the composition of Biesse's corporate bodies as reflected in this Report is that provided for by the regulations prior to the aforementioned legislative amendment, in force on the date of election of the Board. It should also be noted that, as a result of the aforementioned change in the duration of the legal obligation on gender balance and the mechanism for the automatic transposition of the regulations in force on the subject provided for in the Company's Articles of Association, Biesse has not deemed it necessary to make any corrections to the provisions on gender balance provided for in its Articles of Association aimed at ensuring compliance with the criteria even after the expiry of the previous legislation, as recommended by the Corporate Governance Code.
The Board of Directors is the central body of the Company's Corporate Governance system and is responsible for defining, applying and updating the rules of corporate governance, in compliance with the regulations in force, as well as determining the strategic management guidelines and top management of the Company and Group (understood as Biesse and the companies under its control, in accordance with the definition provided by article 93 of the TUF).
The actions and decisions of the directors are shaped by the primary objective of creating value for shareholders, in consideration of the directives and policies of the Group and the benefits connected with belonging to the Group.
The Board of Directors is vested with all powers of ordinary and extraordinary administration. It has the power to make all the decisions deemed necessary or conducive to the pursuit of the Company's business purpose, with the exclusion of decisions reserved to shareholders by law.
With a resolution of 2 May 2018, the Board of Directors was assigned a strategic and organisational role, in addition to responsibility for verifying the existence of the checks that are needed for monitoring the conduct of the Company and the Group as a whole.
The Board, as provided for by the Articles of Association and a resolution of 2 May 2018, is in particular responsible for:
reporting to shareholders at shareholders' meetings;
determining, by proxy granted to the Independent Directors, which proposals to submit to the Shareholder's Meeting and the Board itself for the remuneration of individual Board members;
The Shareholders' Meeting approved the remuneration of the directors at the Board meeting on 24 April 2019, subsequently supplementing that of Mrs. Vanini following her change of duties during the meeting of 30 April 2019 and the Board, a the recommendation of the Remuneration Committee, assigned to the directors the remuneration approved at the Shareholders' Meeting. For more information, see paragraph 9.
The Board constantly monitored the general results of operations through its meetings, taking into consideration the information received from the authorised bodies, as well as periodically comparing the Company's performance to forecast results.
With regard to the prior approval by the Board of Directors of related-party transactions and/or transactions affecting the interests of one or more directors or third-party interests they may represent, see section 12 below.
The Board of Directors normally meets at least four times a year, in order to approve the financial reports required of companies listed on the Star segment of Borsa Italiana's electronic equity market (MTA).
During the Financial year closed 31 December 2019, the Board of Directors held seven meetings, each lasting two hours and forty-five minutes on average. For the Financial year ending 31 December 2020, the Board of Directors has scheduled five meetings, two of which were held on 21 February 2020 (for approval of the Group's 2020-2022 three-year plan) and on 19 March 2020 (for approval of a share buyback programme).
The attendance percentage of each director in office at 31 December 2019 at the meetings of the Board of Directors is shown below (as detailed in Table 2 below): Roberto Selci 71,4%, Giancarlo Selci 100%, Alessandra Parpajola 100%; Stefano Porcellini 85.7%, Silvia Vanini 100% (in relation to the number of meetings held during the actual period of office), Giovanni Chiura 100%; Elisabetta Righini 71.4% and Federica Palazzi 100%. The assessment of the requisites of professionalism, integrity and independence of the members of the Board of Directors and of the committees was carried out with a positive outcome by the Board of Directors on 02 August 2019.
In compliance with the Corporate Governance Code, the Board of Directors implemented a self-assessment process for the Financial year concerning the adequacy and functioning of the body itself.
The proposal was presented to the members of the Board at the meeting of 15 March 2019 and was approved by the same. On that occasion it was decided not to outsource this evaluation process to a third party due to the limited number of board members. However, this eventuality was taken into consideration as an alternative for the self-assessment to be carried out before the next renewal of the Board of Directors.
The above-mentioned self-assessment process was carried out through (i) completion of questionnaires addressed to all members of the Board of Directors and (ii) collegial assessment during a Board meeting, based on the results of the first assessment. The self-assessment was carried out in a disciplined manner and with the active participation of all the Directors involved.
The questionnaire and the collegial assessment concerned: analysis of the composition and internal dynamics of the Board and Committees; examination of the tasks and duties of the Board and certain reflections on the remuneration issue.
The Board then specifically assessed the adequacy of the organisational structure during the Board meeting of 14 May 2019, analysing the results of, inter alia, the self-assessment process.
From the analysis it emerged that: on the whole, the work on the board was considered to be adequate and the corrective measures identified in a homogeneous way among directors were related to: (i) a possible in-depth examination of the issue regarding the assessments that the Board of Directors may carry out in relation to the proper functioning of the Board's committees; (ii) the timing with which directors and statutory auditors receive the meeting call/agenda and documentation ahead the Board meeting; (iii) the drafting of specific regulations governing the roles and responsibilities of the Board of Directors and its members; (iv) the need to envisage specific reporting on the part of the Chairman and Chief Executive Officer concerning the activities carried out in the exercise of their powers; (v) the assessment of the functioning of the internal control and risk management system with respect to the characteristics of the Company and the risk profile made by the Board of Directors; (vi) the assessment by the Issuer's Board of Directors of the Boards of Directors of subsidiaries; (vii) considering it appropriate for the Board of Directors to have a member with in-depth expertise in corporate organisation, particularly in relation to the company reorganisation project in progress at the time.
During the Financial year, the Board also specifically assessed the adequacy of the administrative and accounting structure of the Issuer and its subsidiaries set up by the CEO during the Board meeting held on 20/12/19
On the same date, the Board carried out an assessment of the adequacy, effectiveness and effective functioning of the internal control system, based on the activities carried out and reported by the Control and Risk Committee, approving a project to update the Group's internal control system and the control system pursuant to Law 262/2005, in the light of implementation of the Oracle ERP in all the Group's main subsidiaries, resulting in an intrinsic improvement in the level of effectiveness of the control system itself.
For Board meetings, directors are provided with the documents and information needed by the Board in order to discuss the issues examined. In any event, the Chairman ensures that specific and appropriate clarification is given at Board meetings. Achille Marchionni participates at Board meetings in the capacity of permanent secretary of the Board of Directors for the entire duration of the mandate of the administrative body currently in office.
In addition to the secretary, the following directors normally attend board meetings as guests: the Group CFO, the Group Finance Director Alberto Amurri and the Head of the Legal Affairs Office of the Group Elena Grassetti.
The Shareholders' Meeting has not authorised in advance waivers to the prohibition of competition pursuant to article 2390 of the Civil Code.
On the basis of the powers conferred at the meeting of 2 May 2018, the Board of Directors reserved to themselves the powers regarding the following matters:
a. Start-up of new businesses.
b. Opening or closing factories, branches, remote facilities, sales offices and the like.
c. Acquiring or disposing of shareholdings, branches or companies and the like.
d. Stipulation of agreements with third parties of strategic importance (alliances, associations, joint ventures, long-term cooperation, etc.).
e. Purchase or sale of real estate (land and buildings) and associated rights; establishment of guarantees on immovable property such as, by way of example only, the granting of mortgages, privileges and guarantees.
f. Issuing of sureties in the interest of third parties and for reasons other than those of commercial management and granting of privileges on movable assets, issuing guarantees and granting loans; this limit will not be effective for transactions involving the acceptance and endorsement of credit instruments.
g. Stipulation of contracts that create a situation of conflict of interest between the Company and its directors, internal auditors or managers. A conflict of interest is presumed, in particular, if the other party to the contract is a relative either direct or by marriage of directors, auditors or managers of the Company, or is a Company or entity with direct or indirect links to such relatives.
h. Stipulating, substantially modifying or terminating contracts which, due to their possibly stifling competition by their nature or content, may be subject to notification to the competent national or international anti-trust authorities.
The Chairman of the Board of Directors, Giancarlo Selci, due to the size of the company and the activities of the same, as well as the many years of knowledge and experience acquired in managing the Group, with a resolution of the Board of Directors adopted on 2 April 2018, has been delegated all powers of ordinary administration, including therein the power to manage relations with credit institutions and all the signatory powers necessary for the lodging of tax returns of all kinds, human resources management, the purchase and sale of motor vehicles and capital goods registered in public registers, the subscription and negotiation of bills of exchange issued pursuant to Law No. 1329 of 28 November 1965 (so-called "Sabatini Act") and leasing contracts. The Chairman is also empowered to represent the Company legally. By virtue of the powers conferred, the Chairman is one of the main persons responsible for management of the Issuer (Chief Executive Officer).
The Chairman, Giancarlo Selci, also controls Bi.Fin S.r.l. and therefore controls the Company.
Chief Executive Officers
The CEO Roberto Selci, in a resolution dated 2 May 2018, was given the legal representation of the Company at any public and private office and before any judicial authority, as well as the attribution of powers in matters of the definition of strategy and the general coordination of Group policies, for the preparation of the annual budget to be submitted to the Board of Directors, the definition of the functional structures of the Company and of the subsidiaries within the framework of the general organisational guidelines established by the Board, the setting of the criteria for recruitment and general management of personnel in compliance with the annual budget. The CEO is in charge of the ordinary administrative and commercial management of the company, including the management of relations with credit institutions.
The CEO has also been assigned the duties and responsibilities pursuant to Italian Legislative Decree 19 September 1994, No 626, as well as Legislative Decree 9 April 2008 No 81 as amended concerning the health and safety of workers in the workplace, all with the power to delegate; in particular, the CEO was given the legal role of "Employer" pursuant to and for the purposes of article 2 of Italian Legislative Decree 19 September 1994 No 626 and of article 2 of Italian Legislative Decree 9 April 2008 No 81 as amended, with the duties laid down therein with the power to delegate, to the extent permitted by law, the performance of any useful and/or necessary activity aimed at ensuring compliance with the law.
Finally, the CEO was assigned the authority and responsibilities, with the power of delegation, as per Legislative Decree No 196 of 30 June 2003, and any subsequent supplementary and/or amending regulations, concerning the protection of persons and other bodies in connection with the processing of personal data.
Based on the granted powers Roberto Selci can be considered one of the Chief Executive Officers of the Company.
No interlocking directorate are present included in application criterion 2, paragraph 5 of the Code.
Again with a resolution dated 2 May 2018, it was confirmed that the director Alessandra Parpajola was given authority with regard to: the management of credit risk, the appointment and revocation of legal counsel and attorneys, and the representation of the Company in courts of law, with full power to compound and/or abandon disputes and authorise settlements, to grant moratoriums and extensions on payments, to negotiate and sign forfeiting, factoring and discount agreements without limit as to the amount; the power to sign correspondence, sign and endorse cheques, order bank transfers, sign income tax and VAT returns, and sign appeals to tax commissions; the power to approve the recruitment and dismissal of employees, settle labour disputes, impose disciplinary measures and perform any other act necessary with regard to Company HR.
A resolution dated 2 May 2018 confirmed the existing power of attorney granted to the director Stefano Porcellini, as well as granting him the powers of ordinary administration and a specific authorisation for the monitoring and supervision of the Italian and foreign subsidiaries assigned to him as General Manager of the Group. On the same occasion, special tasks and related powers were conferred on him, with the legal representation of the same, in connection with relations with credit institutions, lawyers and professionals in general, the supervision and directing of the operating divisions of the Group and of the centralised functions (with the exception of the functions that report directly to the CEO), to the representation of the company at any public and private office and before any judicial authority, with the right to arrange conventional sequestrations, as well as the right to request judicial seizures and settle disputes.
With resolution of 14 May 2019, Director Silvia Vanini was conferred specific powers and proxies in view of her central role in personnel management, as well as for the implementation of the corporate reorganisation process that the Issuer currently has in progress.
The aforementioned executive directors all duly reported to the Board of Directors on the performance of their duties and responsibilities at each Board meeting held.
There are no other executive directors on the Board of Directors other than those indicated in point 4.4 above.
The Company, in compliance with principle 3.C.3 of the Code, has three independent directors who are Mr. Giovanni Chiura, Prof. Elisabetta Righini and Ms. Federica Palazzi.
The independent directors are such, based on the provisions of the TUF and the Code, because:
The independence requirements of each of the independent directors was verified, in compliance with TUF and the Code, in the meeting of 02 August 2019.
The Board of Auditors investigated the correct application of the criteria and procedures adopted by the Board for assessing the independence of its members, and produced no findings requiring reporting.
The number and authority of Independent Directors is such that they ensure that their opinion has a significant weight in decisions taken by the Issuer's Board of Directors, in the light of the size and organisational structure of the Board in office at 31 December 2019. These directors bring their specific competencies to Board discussions and contribute to decisions being made in the Company's interest. They confirmed their suitability to qualify as independent directors at the time of presenting the lists for the reconstitution of the Board and also committed themselves to maintaining their independence throughout their mandate.
During 2019, the Independent Directors held an autonomous meeting on 11/12/2019, during which they discussed issues relating to: provision of documents relating to the agenda of Board meetings, inductions, conduct of Board meetings, Committee reports in Board meetings and remote connection to Board meetings.
The Board, acknowledging that international best practice recommends avoiding the concentration of offices on a single person without adequate checks and balances in order to ensure full compliance with the Principles of the Code, has established the function of Lead Independent Director, appointing to fill this role independent director Elisabetta Righini. The Lead Independent Director acts as a co-ordinator for non-executive Board members, with a view to encouraging their greater contribution to the work and operation of the Board.
The Lead Independent Director is specifically responsible for:
In 2019, the Lead Independent Director called:
In accordance with the Code, directors and statutory auditors are required to uphold the confidentiality of the documents they view and the information they learn in the due course of their duties, and to comply with Company procedures for the internal management and disclosure of such documents and information.
External communications of documents and information regarding the Company or/and the Group, with particular attention to so-called "Price sensitive", inside information, are regulated by a procedure, approved by the Board of Directors in the meeting of 27 March 2006, as amended (the last time on 3 August 2018) following the entry into force of European Regulation No 596/2014 (so-called Market Abuse Regulation, hereinafter "MAR"). This regulation ensures the complete, correct, clear, transparent, timely, continuous and maximum dissemination of information concerning the Company and its subsidiaries, as well as compliance with the primary and secondary legislation in force. These procedures also require a Register to be set up of individuals having access to inside information. Following the publication of the new Consob Guidelines of October 2017 on inside information, the Company decided to update its regulations. The changes introduced by the Guidelines include the list of all persons who have access to "relevant information" (RIL: relevant information list), which the Company has established. This procedure is available on the Company's web-site, www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
On 3 August 2016, the Board of Directors revised its internal regulation on internal dealing in view of the entry into force of the MAR, subsequently updating it on 22 July 2017. This procedure is available on the Company's website www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
At the Board of Directors meeting on 11 November 2011, the Company approved the adoption of an "Antitrust Handbook" subsequently updated in May 2016, which provides employees with the basic rules of conduct for reducing the risk of engaging in anti-competitive conduct. This code will coordinate with the Group Code of Conduct which already in paragraph 5.1.13 provides as a general rule the prohibition of engaging in anticompetitive conduct.
By means of a resolution dated 2 May 2018, the Board of Directors, as reconstituted on 24 April 2018, formed a committee that performs the functions laid down by the Code for the Control and Risk Committee, the Committee for transactions with related parties and the Remuneration Committee, each composed of two independent directors. The Board of Directors has no other committees.
The internal rules of procedures for these committees were approved by the Board of Directors on 3 August 2016 and are available on the Company's website www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
The Board of Directors decided not to set up an Appointments Committee due to the small size of the Board itself and the requirements of the Articles of Association regarding candidate list voting system, which ensures the transparency of the appointment procedures and a balanced make up of the Board of Directors.
The Board of Directors has set up a Remuneration Committee which, in compliance with the Code, currently consists of two non-executive independent directors:
The Board of Directors considered, when appointing the members of the Remuneration Committee, that the directors Elisabetta Righini and Federica Palazzi had adequate knowledge and experience in accounting and finance.
The Committee has the task to (i) submit to the Board proposals for the definition of the general policy for the remuneration of CEOs, executive directors, of other directors holding particular offices and executives with strategic responsibilities, monitoring the implementation of resolutions adopted by the Board; (ii) periodically evaluate the criteria adopted for the remuneration of key management personnel, monitoring their application and making recommendations to the Board in general; (iii) submit proposals to the Board on the remuneration of executive directors and other directors who hold particular offices as well as setting performance targets related to the variable component of remuneration; (iv) monitor the implementation of Board resolutions, verifying, in particular, the actual achievement of performance targets. Directors must abstain from taking part in Committee meetings which include discussion of the Board remuneration proposals.
When carrying out its duties, the Remuneration Committee can access the necessary company information and functions, as well as call upon external consultants under the terms established by the Board of Directors.
During the Financial year, the Committee met twice, on 08/03/19 and 31/07/19, and on these occasions it was called upon to evaluate the proposal of the 2018 Remuneration Report, the increase in the Board of Directors' remuneration, the 2019-2020 Long Term Incentive Plan of the subsidiary HSD S.p.A. and the partial extension of the 2018-2020 Long Term Incentive Plan of Biesse S.p.A. to two new company employees. At the end of the meetings, the Committee voted in favour of the various items on the agenda submitted for its examination.
As in previous years, no financial resources were allocated to the Committee since, in order to fulfil its duties, it used the Issuer's corporate resources and facilities.
On 11 November 2011, the Board of Directors adopted a Remuneration Policy of the Issuer and its subsidiaries, prepared in compliance with Article 123-ter of Legislative Decree No. 58 of 24 February 1998 ("Consolidated Law on Finance") and Article 6 of the Corporate Governance Code, also taking into consideration that specified in the Recommendations of the European Commission no. 2004/913/EC, 2005/162/EC and 2009/385/EC. The current Policy complies with the update to the Corporate Governance Code of July 2018 and implements, as envisaged by the application criterion 6.C.1 (f) of the Code, the possibility to reclaim the variable components of remuneration in cases where these had been allocated on the basis of information subsequently proved to be manifestly incorrect.
The Issuer's Remuneration Policy already complies with the provisions introduced by Legislative Decree No. 49/2019 and the related regulations and will be submitted for approval to the Shareholders' Meeting on 21 April 2021.
The Policy establishes guidelines and principles for definition of the remuneration of the main managerial figures of Biesse and the Group aimed at attracting, retaining and motivating people with the professional qualities required to successfully manage the Company and the Group and contributes to company strategies, the pursuit of medium-long term interests and the Company's sustainability.
The Policy outlines, in particular, the criteria and procedures to be followed for determining the remuneration of the following key figures identified as:
It should be noted that, even prior to the adoption of the Policy and already with a view to the provisions of article 6 of the Corporate Governance Code, the Company, in order to attract, retain and motivate Directors with specific professional qualities necessary to successfully manage Biesse and to ensure that the interests of Executive Directors were aligned with the primary objective of creating value for shareholders in the medium to long term, introduced mechanisms which provide for a significant part of the remuneration of Executive Directors and Top Management of the Group to be made up of performance-linked compensation and/or individual targets (also known as variable incentive bonuses or schemes).
The new long-term incentive plan called "Long-Term Incentive 2018-2020 of Biesse S.p.A." was approved by the Remuneration Committee on 11 May 2018 and, being an exclusively monetary incentive plan without the assignment of shares, pursuant to article 114-bis of the TUF, a resolution of the Shareholders' Meeting in this regard was not necessary, since a resolution of the Issuer's administrative body (14 May 2018) was deemed sufficient.
This plan provides for the payment of cash bonuses to the beneficiaries subject to the reaching of economic and financial targets by the Company (cash flow objectives and EBITDA).
Remuneration of non-executive directors is not linked to the performance results achieved by the Issuer. No share-based incentives plan has been made for non-executive directors.
For further information on the Biesse remuneration policy, please refer to the corresponding Report pursuant to article 123ter of the TUF, which has been published as provided by law. It is pointed out that the claw-back clause provided for in application criterion 6.C.1. (f) of the Code was adopted in the Remuneration Policy approved by the Shareholders' Meeting called to approve the financial statements as at 31 December 2015. On this point, please refer to that indicated in the corresponding Remuneration Report that will be published according to legislation.
No other agreements have been entered into between the Issuer and the directors during 2019 that provide for indemnities other than those set forth by laws in force in the case of resignation, dismissal/termination without just cause, or if the employment relationship ceases following a public offering.
The Board of Directors has set up an internal Control and Risk Committee which, in compliance with the Code, currently consists of two non-executive, all independent directors:
The aforementioned Directors have experience, respectively, in risk management and in accounting and financial matters, deemed adequate by the Board at the time of their appointment.
The Committee not only assists the Board of Directors in carrying out their duties, it is also responsible for:
The Committee reports periodically with the Internal Audit department and the Board of Statutory Auditors.
During the Financial year, the Control and Risk Committee held 4 meetings, duly recorded, with average duration of sixty minutes. The meetings were always attended by all the Committee members.
Both Directors Elisabetta Righini and Federica Palazzi attended 100% of the Committee meetings.
The Board has four meetings scheduled in 2020, one of which was held in March.
The Chairman of the Board of Internal Auditors and the Standing Auditors, as well as the Internal Audit Manager, Domenico Ciccopiedi, attended the meetings of the Control and Risk Committee.
In carrying out its duties in 2019, the Control and Risk Committee assessed the documentation on the Issuer's risks, overseeing the detailed operational update of the risk assessment conducted by the Issuer during the listing phase. It also assessed the accounting principles that served as a basis for the financial reports, and reviewed the activities of the Internal Audit department. It was able to access the necessary company information and functions to carry out its duties. In order to perform its functions, the Control and Risk Committee was provided with the human resources deemed adequate for the activities to be carried out. The Chairman reports on the work carried out by the Committee during the Board's plenary meetings.
The internal control system of the Biesse Group consists of a set of rules that define behaviours, values and procedures to be followed by all employees and contractors. The aim is to ensure good corporate governance and monitor the key business risks, as well as ensure the reliability of all financial and other information given to the Company's various bodies and to the market.
During 2019 the Board of Directors evaluated the adequacy, efficiency and effectiveness of the control system in consideration of the verifications carried out in this regard by the Control and Risk Committee.
The Internal Control and Risk Management System reduces but cannot eliminate the possibility of wrong decisions, human errors, fraudulent violation of control systems and unpredictable events. Therefore a good Internal Control and Risk Management System provides reasonable, but not absolute, assurances that the Company will not be hindered in achieving its business objectives or in the orderly and legitimate conduct of its activities, by circumstances which may reasonably be foreseen.
The Internal Control and Risk Management System of the Company, defined according to national and international leading practice, consists of the following three levels of control:
First level: operational functions identify and assess risks and define specific actions for their management;
Second level: functions responsible for controlling risks define risk management methodologies and tools and carry out risks monitoring activities;
Third level: the Internal Audit department provides independent assessments of the entire System.
The guidelines of the internal control system have been defined by the Board of Directors in order that the main risks relating to the Issuer and its subsidiary are correctly identified and adequately measured, managed and monitored, also determining compatibility criteria of such risks with sound and proper business management. The guidelines also took into account all the risks that could affect the long-term sustainability of the Company's business.
The hierarchy of this control system can be defined in the points below.
The reference person of the Control and Risk Committee is Executive Director Alessandra Parpajola, responsible for supervising implementation and evolution of the Committee, identifying the company risks to design, create, and manage the internal control system and attempting to adapt this system to the changing operating conditions, in compliance with the regulations and prevailing law. In evaluating the main risks, the Director responsible is assisted by the Internal Audit Manager, who reports directly to him. The Internal Audit Manager, Mr Domenico Ciccopiedi, was appointed on 4 August 2014 at the proposal of the Chairman of the Board of Directors, who also proposed his remuneration.
The above-mentioned representative:
The Internal Audit Manager, Domenico Ciccopiedi, was appointed by the Chairman of the Board of Directors, in agreement with the Control and Risk Committee; he meets the independence requirements in compliance with the Corporate Governance Code.
According to the Corporate Governance Code, the Internal Audit Manager does not hierarchically report to any manager of operating areas, has free access to all the company information and has his own appropriate financial resources. He has direct access to all information useful to perform his mandate and is committed to providing assurances on the internal control system reporting the results directly to the Chairman of the Board of Directors, the Control and Risk Committee, and the Board of Statutory Auditors. His remuneration was defined in line with corporate policies by the Board at the proposal of its Chairman. The financial resources available to the Internal Audit Manager in 2019 amounted to €80.000,00 (eighty thousand euros). During that period, the Internal Audit Manager was mainly involved in audit activities to verify the correct application of Group accounting procedures (Internal Control over Financial Reporting Model) during the preparation of financial reports. The following companies were the subject of these audits: Biesse Iberica W.M. SL,, HSD USA Inc., Biesse Manufacturing Pvt Ltd, Biesse S.p.A., Biesse Canada Inc., HSD Mechatronics (Shanghai) Co. Ltd., HSD Mechatronics Korea LLCd., Biesse America Inc., HSD Deutschland GmbH.
The purposes, powers and responsibilities of Internal Audit's activities are formally defined by an Internal Audit Charter, consistent with the definition of Internal Auditing defined by the Corporate Governance Code, the Code of Ethics and the reference Standards.
The Internal Audit Manager:
In 2019, the main activities carried out by the Internal Audit Manager were as follows: analysis and testing of the internal control system pursuant to Law No. 262/05; participation in Supervisory Bodies and audits under Legislative Decree 231/01 for the companies Biesse S.p.A., HSD S.p.A., Viet S.r.l., Uniteam S.p.A. and Bre.Ma. Srl; overseeing the certification of related-party transactions involving the Group's senior management; managing the Enterprise Risk Management process; identifying and managing risks internal to the Group; implementation of the Non-Financial Declaration reporting process pursuant to Italian Legislative Decree 254/2016 and preparation of the Biesse Group Sustainability Report; management of activities related to Anticorruption and Antitrust compliance.
In March 2010, the Biesse Group adopted a Code of Conduct as an integral part of its Internal Control System. The Code of Conduct enshrines the principles of ethics and professionalism that the Group expects all directors, auditors, employees, associates, consultants, and partners to strive for. The Code of Conduct was adopted by all the Group companies in Italy and abroad. This Code aims to convey the importance of operating in a way that is sustainable and that can protect the interests of all stakeholders it has been integrated in order to provide guidelines for environmental protection, health and safety and ethical business practices too.
The Code of Conduct is an official document that expresses the ethical commitments and responsibilities for Biesse and other Group companies when conducting business and managing the company's affairs. The document also governs the rights, duties and responsibilities expressly exercised and undertaken by Biesse in relation to the parties it deals with in carrying out its business.
The Code of Conduct is an integral part of Biesse's Organisation, Management and Control Model pursuant to Italian Legislative Decree of 8 June 2001 No 231 (hereinafter the "Model"), approved by the Board of Directors in 2007 and containing provisions on the administrative Responsibility of its entities.
On the proposal of the Supervisory Body, on 30 October 2018, the Board of Directors approved the latest version of the Model, modified in both the general and in the special sections in order to incorporate the following cases, within the framework of the predicate offences pursuant to Leg. Decree 231/01:
The Model is the result of a long and in-depth analysis of the risks associated with Biesse's legal status. It is consistent with the principles enshrined in Legislative Decree 231/01, in line with national best practices and the instructions of Confindustria, and is sufficient to prevent the risk that employees and associates of the Company commit the offences set forth in the aforementioned decree and in subsequent amendments.
It represents an additional guarantee of the sense of responsibility in relationships within the Group and with external parties, offering Shareholders sufficient guarantees of correct and efficient management.
The Model contains a detailed analysis of the risks of committing the offences provided for in Legislative Decree No. 231/01, with specific reference to significant offences in relation to Biesse's business, and a list of procedures required to fill any gaps between the areas found to be potentially at risk and the procedures already in place and operational at Biesse.
Presently, the areas identified as at risk and monitored pursuant to the regulations are:
Corporate crimes;
Market Abuse crimes;
A Supervisory Body was also set up, consisting of the Chairman, Giuseppe Carnesecchi, of the Head of the Biesse Legal Affairs Office and of the Head of the Biesse Internal Auditing Office, with the task of:
To complete the Model, note that the Company has set up a structured and unified system of procedures and control activities (which includes bolstering the efficacy of those already existing and by implementing new ones) aimed at covering any possible risks arising from sensitive and instrumental activities for the purpose of committing the offences set forth in the aforementioned decree.
The Model, as well as the Code of Conduct, are available on the company's website at www.biessegroup.com, Investor Relations section.
The risk management and internal control over financial reporting of the Company is based on the "COSO Report" reference model, which can be defined as a set of rules, procedures and organisational structures that uses an appropriate risk identification, measurement, management and monitoring process, according to a Risk Based methodology to run a healthy, sound, correct and transparent company that meets the predefined objectives.
The system aims to ensure:
The Board of Directors is responsible for the internal control and risk management system and sets its guidelines, periodically checking its adequacy and effective functioning, also through the Control and Risk Committee and finally, describes its essential elements in relation to corporate governance.
At the meeting of 3 August 2012, following the prior approval of the Control and Risk Committee, the company adopted the Policy for managing risks/opportunities (or ERM, Enterprise Risk Management). On 20 December 2019, the Board of Directors approved the amendments made to the Policy, aimed at simplifying it and making it more consistent with the current risk management within the company. In this Policy, in line with the Corporate Governance Code, the management of risks/opportunities plays a central role in the corporate governance rules; it is the responsibility of the Board of Directors to ensure proper management of key risks/opportunities, while the Committee must play a role of assurance on the adequacy of the internal control system. Via the ERM, the rules with which the Biesse Group performs the evaluation of risks/opportunities are established and formalised, thus introducing a structured process and adequate operational tools. The document was drafted taking inspiration from the main benchmarks on Enterprise risk management, in particular the COSO Enterprise Risk Management framework. Adopting adequate and modern tools in this field allows the internal functions to adequately structure the process, also with the aim of internally sharing in-depth knowledge about the management of risks/opportunities able to ensure a more strategic/preventive (rather than the typical reactive) approach.
The ERM process is structured in three phases described as follows:
The first is the risk assessment that aims to identify, describe, classify and assess risks/opportunities. This phase is carried out in two separate moments; Risk Identification and Risk Evaluation through identification of the various types of risks to which the Company is exposed and their assessment.
The second is the risk treatment that aims to define targets and the owners responsible for implementing and maintaining appropriate risk/opportunity management measures.
The third is the Risk monitoring that aims to implement an effective internal control process on the effectiveness and effective implementation of the ERM Policy and of the tools defined by the Group for risk/opportunity management.
The controls set up can be split into the following categories:
First level checks carried out in individual legal entities, offices and divisions based on the assignment of responsibilities, powers and mandates, separation of duties, assignment of privileges and rights of access in IT applications;
Second level checks through the issuing of authorisations by individual department managers (e.g. budget, investment and/or purchase requests, signing of service contracts) or through the operative supervision of the individual responsibilities (e.g. verification of reconciliations, analysis of the coherence of data, etc.);
Third level checks entrusted to the internal control bodies (e.g. Internal Audit Department, Quality Management, Internal Control Committee, Supervisory Board under Legislative Decree No. 231/01) and external control bodies (Board of Statutory Auditors, Independent Auditor, Certifying Bodies).
With a view to creating value for shareholders, Biesse believing it to be essential to work towards this goal by increasing the safeguards set up to protect the integrity of information intended for shareholders, the Company has taken action to improve efficiency and focus on achieving compliance with the provisions of Law No. 262/2005. Specifically, in order to protect shareholders and stakeholders in general, in 2007 the Biesse Group introduced procedures to ensure the veracity, correctness and transparency of the data by (i) a preliminary scoping activity aimed at identifying the significant types of transactions, transactions not considered routine, and accounting estimates to be included in the scope of the analysis in relation to significant related accounts at a consolidated level, based on defined qualitative and quantitative criteria (e.g. materiality, inherent risk, etc.); (ii) a risk evaluation activity aimed at certifying that processes and sub-processes identified in the scoping phase are not invalidated by irregularities, errors or omissions not detected by the internal monitoring system and, generally, by the "Corporate Governance" system; (iii) implementation of new control procedures to prevent the risk under point (ii) above; (iv) planning and implementation of a round of tests on the entire internal control system designed to verify its relevance and effectiveness and preparation of a Remediation Plan with a view to completely achieving the control objectives defined in the scoping phase.
With specific reference to the Group's subsidiaries, the growing complexity of the business entails the need to align the operating rules for management of the main administrative processes, also in the light of the results of the audit activities carried out, in order to standardise the controls for correct financial reporting. For these reasons, following the implementation of Oracle ERP in all the Group's main subsidiaries, which constitutes an intrinsic improvement in the level of effectiveness of the Group's internal control system, on 20 December 2019 the Board of Directors approved a project to update the controls and documentation system pursuant to Law 262/05, which will be developed during 2020 with internal resources and which has the main objective of standardising control rules and procedures within the Group.
To fully implement the ICFR model, Biesse has set out requirements regarding: i) the compliance plan, which establishes the rules for the formalisation, maintenance, management and control of the model; ii) the collation procedure, whose purpose is to ensure that the Chairman of the Board of Directors and the Financial Reporting Officer receive the internal affidavit of the process owners responsible within the company for applying the model.
On 20 June 2018, the Biesse Shareholders' Meeting, following the opinion of the Board of Statutory Auditors and the Board of Directors on 14 May 2018, resolved to appoint Deloitte S.p.A. as independent auditors for the period 2019-2027, establishing the relative remuneration.
On 30 October 2019, in compliance with Law no. 262 of 28 December 2005, in addition to the provisions of the Articles of Association, the Board of Directors, at the proposal of the Chairman and subject to the favourable opinion of the Board of Statutory Auditors, approved the appointment of Mr. Pierre Giorgio Sallier de La Tour, new CFO of the Biesse Group, as Financial Reporting Officer.
Mr. La Tour took over the role in place of Mr. Stefano Porcellini, who had assumed this position ad interim following the resignation of the previous Administration, Finance and Control Director, Mr. Cristian Berardi, on 15 March 2019.
The Financial Reporting Officer, Mr. La Tour, possesses all the requirements of professionalism and integrity required by applicable law to carry out this task, being an expert in the fields of administration, finance and control and in possession of the necessary integrity requirements.
The Manager has been granted all the necessary powers under article 154-bis of Legislative Decree 58 of 24 February 1998, as introduced by article 14 (1) of Law 262 which include but are not limited to:
The issuer provides for coordination procedures among those involved in the Internal Control and Risk Management System in order to maximize the efficiency of the internal control and risk management system and to reduce duplication of effort. To this end, the Board of Directors receives and examines the periodic reports prepared by the Internal Audit Manager, by the Control and Risk Committee and by the Director in charge of the Internal Control and Risk Management System, in order to verify (i) whether the structure of the Internal Control and Risk Management System in place within the Group is effective in achieving the objectives and (ii) whether any reported weaknesses imply the need for System improvement.
According to the Regulation adopted by Consob with Resolution No. 17221 of 12 March 2010, as amended by Resolution No. 17389 of 23 June 2010 ("Consob Regulation"), on 12 November 2010 the Board of Directors of the Company adopted, with the prior approval of the Internal Control Committee at the time, the procedure governing transactions with related parties, laying down the rules for transactions with related parties with the aim of ensuring, for itself and its subsidiaries, the transparency and substantive and procedural fairness of transactions with related parties entered into by the Company.
The Regulation aims to identify the principles and procedures which Biesse uses in order to ensure the substantial and procedural transparency and correctness of Related-Party transactions (as defined below), executed by the Company, directly or through its subsidiaries.
For the purposes of the Regulation, related-party transactions ("RPT") may be defined as any transfer of services, resources, or obligations between related parties, regardless of whether or not a consideration has been agreed, which may include:
merger or spin off transactions in the narrow sense and not proportional, provided these are executed with Related Parties;
every decision related to the assignment of remuneration and economic benefits, in any form, to members of the Board of Directors and Statutory Auditors and to key managers.
The bodies involved in examination and approval of the transactions and bodies which have supervisory duties on enforcement of the Regulation, each for their own sphere of responsibility, for the purpose of identifying the RPT in accordance with the Regulation, are required to give preference to and consider the substance of the relationship and not only its legal form. Taking into account the reports and comments made by other company bodies, the Board of Directors of the Company reviews the effectiveness of the Regulation at least every three years and decides whether any changes are necessary or appropriate.
As the Company is a smaller listed company and pursuant to the recent amendments to the Articles of Association, Biesse is taking advantage of the ability to apply the procedural system allowed for Minor RPTs to Major RPTs, in accordance with article 10 of the Consob Regulation.
This Regulation includes the establishment of a Committee for vetting Related-Party transactions which consists of the two independent directors and uses the prerequisites set forth by applicable law and regulations. This Committee is the Control and Risk Committee.
During the Financial year, the Committee held two meetings, with minutes taken as required, lasting an average of 45 minutes. All members participated in those meetings. One meeting is planned in 2020.
The Board of Directors has found operating solutions that can facilitate the identification and adequate management of the situations in which a director holds an interest on his own behalf or on behalf of third parties.
The Biesse Related Party Transactions Regulation is available on the company's website at www.biessegroup.com, in the section "Investor Relations".
The Board of Statutory Auditors supervises compliance with the law and the Articles of Association and provides control of operations, while it is not responsible for accounting controls which are the responsibility of independent auditors designated by the Shareholders' Meeting among those registered in the Consob roll.
The Articles of Association specify that the Board of Internal Auditors be made up of three standing auditors and two substitute auditors and that nomination is based on the candidate lists filed by Shareholders representing at least 2% (two percent) of the voting stock in the Shareholders' Meeting or another minimum percentage laid down by Consob Regulations (for 2020, as established by Consob Executive Resolution No 28 of 30 January 2020, the minimum percentage established by Consob for the 2019 financial year is 2.5% - it should be noted that in any case the lower percentage laid down in the Articles of Association applies). No Shareholder, nor the Shareholders in the same group, may file or vote for, either severally or jointly or through nominees or trustees, more than one candidate list. If this rule is broken, the vote of the Shareholder in question will not be taken into account for any of the candidate lists filed. Each candidate may only be on one list. Failure to comply will mean ineligibility.
A statutory auditor is elected as follows: two standing auditors and one alternate auditor are selected, in the consecutive order in which they are listed, from the candidate list that obtained the highest number of votes in the Shareholders' Meeting; the names of one standing and another alternate auditor are selected from the candidate list with the second highest number of shareholder votes, according to the sequential order in which they appear in the list. The standing auditor will assume the role of Chairman. If there is a tie among two or more candidate lists, the Statutory Auditors appointed will be those most senior in age.
The lists must be filed no later than the twenty-fifth day prior to the date of the Shareholders' Meeting and must be posted, as required by law and by the Consob Regulations, at least twenty-one days prior to the meeting. Candidatures must be accompanied by a professional curriculum vitae and the statements whereby each candidate accepts the candidature and attests, under personal responsibility, the absence of ineligibility and incompatibility, as well as the existence of the requirements prescribed by law and by the Articles of Association for these roles.
In the event of the replacement or expiry of the term of a statutory auditor, the substitute from the same list as the terminated or expired auditor takes his place. Should this not be possible, the Shareholders' Meeting shall be responsible, with the legal majority, subject to that provided by law on the appointment of statutory auditors representing the majority.
The Board of Statutory Auditors in office was appointed by the ordinary Shareholders' Meeting on 24 April 2018 and remains in office until approval of the financial statements of the year ended 31 December 2020. The members of the Board of Internal Auditors were appointed on the basis of (i) the list presented by the majority shareholder Bi.Fin. S.r.l and (ii) of the minority list jointly presented by "Aletti Gestielle SGR S.p.A.", fund manager of: Gestielle Pro Italia; Amundì Asset Management SGR.p.A., fund manager of: Amundi Valore Italia PIR and Amundi Dividendo Italia; Arca Fondi SGR S.p.A., fund manager of Arca Economia Reale Equity Italia; Eurizon Capital S.A., fund manager of: Eurizon PIR Italia 30, Eurizon Azioni Italia, Eurizon Progetto Italia 70, Eurizon Azioni PMI Italia, Eurizon PIR Italia Azioni, Eurizon Progetto Italia 20 and Eurizon Progetto Italia 40; Eurizon Capital S.A., fund manager of: Eurizon Fund - Equity Italy and Eurizon Fund - Equity Small Mid Cap Italy; Fideuram Asset Management (Ireland) fund manager of Fonditalia Equity Italy; Fideuram Investimenti SGR S.p.A., fund manager of: Piano Azioni Italia, Piano Bilanciato Italia 50 and Piano Bilanciato Italia 30 and Mediolanum Gestione Fondi, manager of the Mediolanum Flessibile Futuro Italia fund, holding a total of 1.4046% of the Issuer's share capital.
The Board of Statutory Auditors met 17 times in 2019.
As at the date of preparation of this Report, 15 are planned for 2020.
For more information on the composition of the Board and the equity investment of each member, see the summary tables. At the end of year, the Board of Statutory Auditors was made up as follows:
Paolo De Mitri (Chairman), born in Milan, on 14/10/1963, obtained the qualification of accountant and commercial expert in 1982. He has been on the Register of Practitioners of the Professional Association of Chartered Accountants and Accounting Experts of the Province of Mantua since 1987 at number 215, Section A; in the Register of Arbiters, Arbitrators and Contract Experts of the Arbitration Board of Mantua since 1994; in the register of consultants to the judge in the categories: auditors, companies, company and asset valuations and taxation since 1993; in the register of auditors at No 18347. During the year, he served as Chairman of the Board of Statutory Auditors in the following companies: BPER Banca S.p.A., Riello Investimenti S.p.A.; Towerclean S.p.A.; Holdclean S.p.A., Ghibli S.p.A.; Fhs&C S.p.A. and as Standing Auditor in the following companies: Riello Industries Srl and Aereogest Srl.
As at 31 December 2019 he does not possess shares of the Issuer
Claudio Sanchioni (Standing Auditor), born in San Costanzo (PS) on 09/09/1958, he graduated in Economics and Commerce on 21/02/1984 at the University of Ancona and was enrolled in the Register of Chartered Accountants of Pesaro and Urbino on 2/10/1984 at No 67, then moved to No 103 A from 1/1/2008, and in the Register of Official Accounting Auditors according to a Ministerial Decree dated 12/4/1995. Technical consultant at the Court of Pesaro, Bankruptcy Receiver at the Court of Pesaro, Chairman of the Board of Statutory Auditors of several unlisted companies, Director of the Board of Chartered Accountants of Pesaro-Urbino and Chairman of the Protection Committee.
As at 31 December 2019 , Mr Sanchioni owns 200 Issuer shares.
It should be noted that on 05 June 2019 the standing auditor Claudio Sanchioni announced his resignation from office with immediate effect for personal reasons..
Silvia Cecchini (Standing Auditor), born in Petriano (PU) on 28 March 1960, with a first-class honours degree in Business and Economics from the University of Ancona in 1985, enrolled in the Board of Chartered Accountants of the Province of Pesaro-Urbino since 1985, auditor, technical consultant at the court of Pesaro and Urbino, Bankruptcy Receiver at the Court of Pesaro and Urbino and technical consultant at the public prosecutors office of Urbino. She has an numerous collaborations with the Faculty of Business and Economics at Urbino.
As at 31 December 2019, she does not possess any Issuer shares.
Dario De Rosa (Standing Auditor), born in Savona on 07/09/1965, graduated in Business Administration from Bocconi University and is a Chartered Accountant. On the Register of Auditors since 1995, he works as a Chartered Accountant specialising in business, tax, corporate, business planning and management control consultancy. Technical consultant to the Court of Pesaro in both civil and criminal corporate matters, he holds the position of member of the Board of Internal Auditors and auditor in several private companies.
As at 31 December 2019, she does not possess any Issuer shares.
Silvia Muzi (Substitute Auditor), born in Rome on 07/18/1969, graduated in Economics and Commerce at La Sapienza University of Rome. Since 1999 she has worked as a Chartered Accountant and Accounting Expert, an Auditor and a UNCI-accredited Auditor. She holds the position of Chair of the Board of Internal Auditors of the Company Cementir Holding S.p.A., a company listed in the Star segment and of the Company Rai Way S.p.A., listed in the MTA segment.
As at 31 December 2019, she does not possess any Issuer shares.
The meeting attendance record of the new auditors in 2019 was as follows: Paolo De Mitri: [100%]; Dario De Rosa: [100%, with reference to the number of meetings held during the actual period in office]; Silvia Cecchini: [64.7%], who, where absent, acquired the necessary and appropriate information from the other statutory auditors; Claudio Sanchioni [100%, with reference to the number of meetings held during the actual period in office]
Statutory auditors with personal or third party conflict of interest in a resolution shall promptly and fully inform the Chairman of the Board and the other members.
In carrying out its activities, the Board of Statutory Auditors monitored the independence of its members with a review carried out on 5 June 2019 and, following the replacement of Statutory Auditor De Rosa, on 10 July 2019, as well as with a self-assessment referring to the Board itself, which was presented at the Board meeting held on 20/12/2019
In performing its duties, the Board has supervised the independence of the external auditors, verifying both the compliance with legal requirements and the nature and entity of the services other than account auditing provided to the Issuer and its subsidiaries by the independent auditors.
In carrying out its duties, the Board of Statutory Auditors liaised with the Internal Audit department and with the Control and Risk Committee. It participated in all Committee meetings, to which the Internal Audit Manager reported on the work carried out.
The remuneration of the Statutory Auditors is commensurate with the commitment involved and the importance of the role held, as well as the size and sectoral characteristics of the Company.
Regarding the composition of the Board in office at 31 December 2019, the Issuer did not consider it appropriate to adopt a diversity policy for aspects such as age, gender, education and professional background, since: (i) the provisions of article 148 of the TUF on gender equality were applied for the election of the board (prior to the amendment introduced by Law no. 160 of 27 December 2019), (ii) the requisites of professionalism called for by the applicable laws and regulations are already required for the election of the Board of Internal Auditors.
It should be noted that with regard to gender requirements for corporate bodies, Law 160 of 27 December 2019 (2020 Budget Law) amended articles 147-ter and 148 of the TUF, which extended the related obligations for six consecutive terms and increased the number of directors and statutory auditors of the least represented gender that must be elected to corporate bodies from 1/3 to 2/5. Issuers already listed are required to comply with these new proportion provisions as from the renewal of the bodies after the entry into force of the new provision (i.e. subsequent to January 2020). Therefore, the composition of Biesse's corporate bodies as reflected in this Report is that provided for by the regulations prior to the aforementioned legislative amendment, in force on the date of election of the Board. It should also be noted that, as a result of the aforementioned change in the duration of the legal obligation on gender balance and the mechanism for the automatic transposition of the regulations in force on the subject provided for in the Company's Articles of Association, Biesse has not deemed it necessary to make any corrections to the provisions on gender balance provided for in its Articles of Association aimed at ensuring compliance with the criteria even after the expiry of the previous legislation, as recommended by the Corporate Governance Code.
Financial communication plays an essential role at Biesse in the value creation process for the Group: the Issuer has adopted a strategy to promote continuous and correct flows of information between the financial community, the market and the Issuer. Biesse has always actively worked to establish continuous dialogue with institutional investors, shareholders and the market, in compliance with the procedures adopted for public disclosure of internal documents and information. For this reason, the specific corporate function of "Investor Relations" was established, which Alberto Amurri was appointed to lead, working with the Board of Directors with the aim of ensuring the systematic publication of complete and timely disclosure through press releases, meetings with the financial community and periodic updates of the Company's website (www.biessegroup.com).
In 2019, Biesse participated in all events organised by Borsa Italiana (STAR events in Milan and London) and independently created various opportunities for meeting and dialogue with the Italian and international financial community.
To foster financial communication, the Board of Directors of Biesse works to provide easy and timely access to the information regarding the Issuer which is relevant for its shareholders to knowledgeably exercise their rights. To achieve this, the Company felt it would be appropriate to set up a dedicated space on its web site with economic and financial information (financial statements, quarterly and interim reports) and data and documents of interest to shareholders, including the Code of Conduct, the Organisation and Management Model and the Sustainability Report (www.biessegroup.com - section "Investor Relations"). The documentation will remain available on the site for at least five years.
Shareholders' Meetings are legally constituted when all shareholders are represented and its resolutions, taken in compliance with the law and the Articles of Association, are binding for all shareholders, even if absent or in disagreement. Shareholders' Meetings may be called in Italy at the company headquarters or elsewhere. The Shareholders' Meeting is called by the Board of Directors by issuing a notice to be published according to the deadlines and procedures provided for by applicable legislation.
Ordinary and extraordinary shareholders' meetings and shareholder decisions are valid where the quorum, voting majorities and other statutory requirements set out in existing laws are satisfied. The Shareholders' Meeting may be held with a single call.
Voting by mail or telecommunications is not provided for. Participation in the Shareholders' Meeting in video conference or conference call is not provided for.
Since 2001, the Company has had a set of shareholders' meeting rules that govern the orderly and practical running of the ordinary and extraordinary meetings, ensuring each shareholder the ability to participate in the discussion of items on the agenda. All those who participate as representatives of shareholdings are entitled to speak on any of the issues set forth for discussion. Shareholders who wish to speak must ask the Chairman for the floor, submitting a written request including indication of the topic of the question. This is done after the chairman has read aloud the items on the agenda and until he has declared the discussion of the issue closed.
The regulations for the meetings can be viewed in the specific section of the website www.biessegroup.com.
During 2019, the Shareholders' Meeting met on 30 April 2019, in second call, in order to resolve on the approval of the financial statements of Biesse S.p.A. as at 31 December 2018, allocation of the 2018 profit/loss, as well as the appointment of a new director, subject to an increase in the number of members of the Board of Directors referred to in point 4.2 above.
3 members of the Board of Directors (Stefano Porcellini, Elisabetta Righini and Federica Palazzi) and 3 statutory auditors Paolo De Mitri, Claudio Sanchioni and Silvia Cecchini) attended the meeting.
On that occasion, the Board reported to the Meeting on the work carried out and on its planned activities, and endeavoured to ensure that shareholders had adequate information so that they could make the fully informed decisions required of the Shareholders' Meeting, including through the publication of the reports required by applicable laws and regulations.
During 2019, there were no significant changes in capitalisation or corporate structure such as to suggest to the Board to propose amendments to the Articles of Association regarding the percentages required for exercise of shares and prerogatives in defence of minorities.
There are no other corporate governance practices other than the above. With regard to the letter of 19 December 2019 addressed by the Chairman of the Corporate Governance Committee to the Chairmen of the Boards of Directors of the listed companies, it should be noted that the on 21 February 2020, the Board of Directors took note of the recommendations received, which were illustrated and discussed in the presence of the members of the Board of Internal Auditors and are already largely being followed by the Issuer.
In particular, the Board, in relation to the improvement areas set out in the recommendations, noted that:
1) the Issuer is aligned with the recommendations on the sustainability of business activity, as an integrated issue in the definition of strategies and remuneration policy, also on the basis of an analysis of the relevance of the factors that may affect generation of value in the long term;
2) the Issuer is aligned with the recommendations regarding pre-Board Meeting information, having implemented on the one hand management of the Board Meeting documentation and on the other carrying out an explicit self-assessment on the adequacy of the pre-Board Meeting information;
3) the Issuer is aligned with regard to the correct application of the independence criteria defined by the Code and to supervision by the Board of Statutory Auditors of the application of such criteria;
4) the Issuer is aligned with the recommendations on remuneration, with regard to the remuneration paid to nonexecutive directors and members of the Board of Statutory Auditors, and will carry out checks during 2020 on the adequacy of the same in relation to the competence, professionalism and commitment required by their office, comparing them with the remuneration practices common in the reference sectors and for companies of similar size, possibly also considering comparable foreign experience.
There were no other changes taking place subsequent to 31/12/2019.
Below is summary information on the make up of the Board of Directors and the Board of Statutory Auditors.
Included with this report is a list of any offices held by each director of the Issuer in companies listed on regulated markets, including foreign markets, in financial, banking, insurance or other companies of significant size.
| S A C A A S C H R E P I T L T R U T U R E |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| No f s ha . o res |
% f s ha re cap o ita l. |
L ist d (sp i fy rk ) / n l ist d ets ot e ec ma e |
R ig hts d o b l iga ion t an s |
||||||||
| Or ina d ha ry s re s |
27 3 9 3, 0 42 , |
10 0 % |
L iste d o he MT A, ST AR n t ent se gm |
All sh ina tive fre ely nsf ble d i ndi vis ible ach . E tra are s a re nom era , an , sha itle s th e h old the rdi nd 's o ent to te at re er one vo co mp any nar y a rdi har eho lde etin in ord ith law s in for rs' ext rao nar y s me gs, acc anc e w ce and th Art icle of As iati nd ibu the ddi tion al attr te e s soc on, a a adm ini tive d e ity rig hts ach ed otin k b law stra att to v toc an qu g s y |
|||||||
| S ha i h l im i d t te re s w ing ig h t ts vo r |
/ | / | / | / |
| f he h bs be ly d ha O T H E R F I N A N C I A L I N S T R U M E N T S ( in ig i iss ) t t to to co n er r g r su cr n ew ue s re s |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| No f . o L ist d (sp i fy e ec ins in Ca f s for ion /ex ise f s for ion /ex ise ha No ha tru nts teg me ory o res co nv ers erc . o res co nv ers erc rk ) / n l ist d ets ot ma e irc lat ion c u |
||||||||||
| Co ib le bo nd ert nv s |
/ | / | / | / |
| S G C A Q S S S A C A A I N I F I N T E U I T Y I N V E T M E N T I N T H E H R E P I T L |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| De lar t c an |
ire D ct ha ho lde s re r |
% f o ina ita rd ha l o ry s re cap |
% f v ing ita ot ha l o s re cap |
|||||||
| G ian lo Se lc i car |
BI .FI N SR L |
5 1% |
5 1% |
| Con Com (CC |
l an d tro Ris k Rem une mit tee Com R) |
ion rat mit tee (CR ) |
Ap intm ent po s Com mit , if tee any |
Exe ive cut Com mit tee , if a ny |
Rel d ate Par ties Com mit tee (CP C) |
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Off ice |
Me mb ers |
Yea r of bir th |
Dat e of fir st app oin nt* tme |
In o ffic e fro m |
In o ffic til e un |
Lis t (M /m) ** |
Exe c. |
Non -ex ec. |
Ind ep. nt pur sua he to t Cod e |
Ind ep. nt t pur sua o Con soli dat ed Law on Fin anc e |
(% ) *** |
No oth er offi ces ** |
* |
* |
* |
* |
* |
* |
* |
* |
* |
* |
| Ch air. |
i Gia Selc rlo nca |
193 6 |
199 4 |
24/ 4/1 8 |
App al o f th rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
M | x | 62.5 | / | |||||||||||||
| MD | Selc i Ro ber to |
196 0 |
200 0 |
24/ 4/1 8 |
App al o f th rov e fina nci al s tate ts men at 3 1/12 /20 20 |
M | x | 100 | / | |||||||||||||
| Dir ecto r |
la Ale Par jo pa dra ssan |
197 3 |
200 5 |
24/ 4/1 8 |
al o f th App rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
M | x | 75 | / | |||||||||||||
| Dir ecto r |
Por ini Ste cell fan o |
196 5 |
200 6 |
24/ 4/1 8 |
App al o f th rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
M | x | 100 | / | |||||||||||||
| Dir ecto r |
ini Silv ia Van |
195 2 |
201 9 |
30.4 .19 |
App al o f th rov e fina nci al s tate ts men at 3 1/12 /20 20 |
M | x | 100 | / | |||||||||||||
| Dir ecto r |
Chi ura Gio ni van |
196 5 |
201 8 |
24/ 4/1 8 |
App al o f th rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
m | x | x | x | 100 | 3 | |||||||||||
| LID | i Elis Rig hin abe tta |
196 1 |
201 5 |
24/ 4/1 8 |
App al o f th rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
M | x | x | x | 100 | 1 | x | 100 | x | 100 | x | 100 | |||||
| Dir ecto r |
i Fed Pal azz eric a |
197 9 |
201 8 |
24/ 4/1 8 |
App al o f th rov e fina nci al s ts at 3 tate men 1/12 /20 20 |
M | x | x | x | 100 | / | x | 100 | x | 100 | x | 100 | |||||
| Not e th e q uor um |
uir ed req |
for fili the list s at the ng |
las t ap intm ent po |
: 2. 5% |
||||||||||||||||||
| No . of etin hel d d uri the fin ial r in esti me gs ng anc yea qu on: |
B.o | .D. : 7 |
CC R: 4 |
CR :2 |
AC : / |
EC : / |
CPC :2 |
* By date of first appointment of each director is meant the date on which the director was appointed for the first time (ever) to the Board of Directors of the issuer
** This column indicates M/m depending on whether the member was voted from the majority list (M) or a minority list (m).
*** This column indicates the directors' attendance at meetings of the Board of Directors and the committees (number of attendances / number of meetings held during the period of office).
**** This column indicates the number of offices of director or auditor held by the individual in other companies listed on regulated markets, Italian or foreign, in financial, banking, insurance or other companies of significant size.
***** This column indicates with an "X" if the member of the Board of Directors is also a member of the committee.
| B d o f S Au dito tatu tor oar rs y |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Off ice |
Me mb ers |
r of bir Yea th |
Dat e of fir st app oin nt* tme |
ffic e fr In o om |
ffic til In o e un |
Lis t (M/ m) ** |
Ind nde epe nce nt t o th pur sua e Cod e |
) * (% |
Nu mb f ot her er o offi ces ** |
|||
| Ch airm an |
Pao lo D e M itri |
196 3 |
201 8 |
24/ 04/ 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
m | x | 100 | 8 | |||
| Sta ndi Au dito ng r |
Silv ia C hin i ecc |
196 0 |
201 1 |
24/ 04/ 18 |
al o f th e fi cial App rov nan t 31 /12 /20 stat nts eme as a |
M | x | 64,7 | / | |||
| Sta ndi Au dito ng r |
Dar io D e R osa |
196 5 |
201 8 |
24/ 04/ 18 |
al o f th e fi cial App rov nan t 31 /12 /20 stat nts eme as a |
m | x | 100 | / | |||
| Alt Au dito ate ern r |
Silv ia M uzi |
196 9 |
201 8 |
24/ 04/ 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
m | x | / | / | |||
| ---A ---- ---- ---- |
UD ITO RS LE AV ING OF |
FIC E D UR ING TH E Y EA R - ---- |
---- ---- - |
|||||||||
| Sta ndi Au dito ng r |
Cla udi o S hio ni anc |
195 8 |
201 8 |
24/ 04/ 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
M | x | 100 | / | |||
| uir for fili list intm : 2. 5% Not e th ed the s at the las t ap ent e q uor um req ng po |
||||||||||||
| No . of etin hel d d uri the fin ial r in esti 17 me gs ng anc yea qu on: |
* By date of first appointment of each director is meant the date on which the director was appointed for the first time (ever) to the Board of Statutory Auditors of the issuer
** This column indicates M/m depending on whether the member was voted from the majority list (M) or a minority list (m).
*** This column indicates the auditors' attendance at meetings of the Board of Statutory Auditors (number of attendances / number of meetings held during the period of office).
**** This column indicates the number of director or auditor offices held by the individual, which are relevant for the purposes of article 148-bis of the TUF. The complete list of the offices is attached, in accordance with article 144(15) of the Consob Issuers' Regulation to the report on the supervisory activities, drawn up by the auditors in accordance with article 153(1) of the TUF.
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