Governance Information • Apr 6, 2017
Governance Information
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This Report (hereinafter the "Report") aims to illustrate the model of corporate governance that COFIDE S.p.A. (hereinafter the "Company") adopted in the year 2016.
The Report, approved by the Board of Directors at the meeting held on March 13 2017, is being made available to the Shareholders in the ways envisaged by law together with the rest of the documentation relating to the Financial Statements for the year ended December 31 2016 that has been prepared for the Annual General Meeting of the Shareholders being called to approve the same financial statements and can also be consulted on the website of the authorized storage mechanism: and – together with other documents of interest to the market - on the website of the Company www.cofide.it in the section "Corporate Governance".
The description of the main duties and functions of the administrative bodies, and of the internal control and the risk management systems of the Company is contained in the "Code of Conduct of COFIDE S.p.A.", approved by the Board of Directors on March 11 2013. The document (available on the Company website) is attached to this Report (Attachment B).
Information on the ownership structure (as per Art. 123-bis, paragraph 1, T.U.F) at December 31 2016
The subscribed and paid up share capital consists of € 359,604,959 comprising 719,209,918 ordinary shares, listed on the Mercato Telematico Azionario of the Milan Stock Exchange – FTSE Small Cap index. All the ordinary shares have the same rights and obligations.
The shares of the Company are freely transferable, except for some restrictions applicable to certain categories of persons for limited periods of time on the basis of the Code of Conduct on the subject of Internal Dealing published on the website of the Company in the section "Corporate Governance".
Given that the Company belongs to the category of SMEs as defined by Art. 1 of D. Lgs. no. 58 of February 24 1998 (hereinafter "T.U.F."), below are the names of the Shareholders of last resort who, in accordance with Consob Resolution 11971/99 either directly or indirectly had percentages of ownership higher than 5% of the capital with voting rights at December 31 2016:
At present there are no shares that give their holders any special controlling rights.
The Annual General Meeting of the Shareholders held on April 27 2015 approved instituting an increased voting right in favour of stable Shareholders as permitted by Art. 127-quinquies of the T.U.F., amending Art.8 of the Company Bylaws.
There are no particular mechanisms for the exercise of voting rights by employees who hold shares.
There are no restrictions on voting rights.
The Company is not aware of the existence of any agreements between Shareholders as per the terms of Art. 122 of the T.U.F.
No agreements have been signed by COFIDE S.p.A. or any of its directly or indirectly controlled subsidiaries which contain a change of control clause, i.e. clauses that take effect in the event of the change of the shareholding control of COFIDE S.p.A.
No compensation is envisaged for Directors in the event of resignation, dismissal without just cause or termination of the position following a takeover bid.
For the election and replacement of Directors reference should be made to what is illustrated in Art. 5) of the attached document Code of Conduct of COFIDE S.p.A. devoted to the appointment of Directors. For amendments to the Bylaws, the terms of the Law are applicable.
For a period of five years from the date of the resolution adopted by the Extraordinary Meeting of the Shareholders on April 29 2013, the Board of Directors has the right to:
a) increase the share capital either once or more than once by a maximum of EUR 250,000,000 (two hundred and fifty million) nominal value either free of charge or against payment, with or without a share premium. The Directors have the right each time to establish the category of shares, the issuance price of the shares, the start of dividend entitlement, the possible allocation of the share capital increase to servicing the conversion of bonds issued even by third parties both in Italy and abroad, or servicing warrants. They will also have the right to determine the reserves and provisions available for allocation to share capital and the amount of the same. More in general to define the procedures, terms and conditions of the share capital increase.
b) issue once or more than once convertible bonds, even in foreign currencies, where the Law permits, with the related share capital increase, up to a maximum amount of Euro 250,000,000 (two hundred and fifty million).
More in general it has the right to define the procedures, terms and conditions of the bond issue and the rules governing such issuance.
The Annual General Meeting of the Shareholders held on April 29 2016, pursuant to and as an effect of Art. 2357 of the Civil Code, authorized the buyback of COFIDE shares for eighteen months from the date of the AGM resolution up to a maximum of 50,000,000 shares with a maximum disbursement limit of euro 35,000,000; the Company will set up a non-available reserve entitled "Reserve for treasury stock held", for the amount of the own shares bought back, by transferring the corresponding amount from the reserve "Recovery of historical cost of equity investments" as per the Financial Statements as of December 31 2015, the most recent ones approved.
The price of each individual share buyback transaction must be no more than 10% higher or lower than the benchmark price recorded by the stock on the trading day on the Stock Exchange immediately
preceding the day on which the buyback is made or the date on which the price is fixed.
The buyback may take place:
a) Through a tender offer (public offer to acquire or exchange shares);
b) On regulated markets according to operating procedures set out in the rules for the organization and management of those same markets, which do not allow the direct matching of bids and offers in the market or in any case in such a way as to ensure equal treatment for all shareholders and in accordance with laws and regulations in force at the moment of the deal; the quantities bought back on any one day shall not exceed 25% of the average daily volume, as defined in EC Regulation no. 2273/2003;
c) Through the proportional assignment to the shareholders of put options to be awarded within a period of 15 months and exercisable within a period of 18 months from this resolution.
At December 31 2016 the company was not holding any of its own shares as treasury stock.
The Company complies with the Code of Conduct of Borsa Italiana S.p.A. as currently in force, prepared by the Committee for the Corporate Governance of Listed Companies and promoted by Borsa Italiana S.p.A., which is available on the website of the Corporate Governance Committee http://www.borsaitaliana.it/comitato-corporate-governance/codice/2015 clean.pdf.
CIR S.p.A. and its strategically important subsidiaries are not subject to any non-Italian rules of law that affect the structure of the corporate governance of the Issuer.
Reference should be made to point 7) of this Report and to Art. 7 of the attached Code of Conduct of COFIDE S.p.A. which deals with the Internal Control and Risk Management System.
Reference should be made to what is described in point 10) of this Report on Shareholders' Meetings and to Art. 9 of the attached Code of Conduct of COFIDE S.p.A., entitled "Relations with the Shareholders".
Reference should be made to what is described in the sections of this Report that deal with: the composition of the Board of Directors (point 2), the Statutory Auditors (point 8) and the Committees (point 4 Institution and functioning of the Internal Committees of the Board of Directors - 6 Remuneration of Directors and 7 System of Internal Control and risk management) and also to the attached Code of Conduct of COFIDE S.p.A., Articles 2, 3 and 5 for the Board of Directors, Art. 8 for the Statutory Auditors, and Articles 4, 5, 6, and 7 for the Committees.
The Company complies with what is prescribed by current regulations as well as with the principles and criteria of the Code of Conduct of Borsa Italiana S.p.A. in relation to the composition of the Board of Directors and the Board of Statutory Auditors on aspects such as age, gender, professional background and experience and monitors the self-assessment process both for the Board of Directors and for the Board of Statutory Auditors.
***
For the general rules relating to the Role of the Board of Directors reference should be made to the terms of Art. 1 of the "Code of Conduct of COFIDE S.p.A."
As of the date of this report the Board of Directors, among other things, carried out the following activities:
on the basis of internal procedures approved by the Board of Directors on October 29 2012, it examined and approved the strategic and financial plans of the Company and also examined the consolidated strategic, business and financial plans of its direct subsidiary CIR and of the companies heading the industrial groups that the latter controls as presented by their respective Chief Executives, evaluating whether the said plans were consistent with those of COFIDE and periodically monitoring their implementation;
defined the nature and level of risk compatible with the strategic objectives of the Company;
evaluated the adequacy of the organizational, administrative and accounting structure of the Company, with particular reference to the system of internal control and risk management;
established the frequency, generally every three months, with which the Chief Executive Officer shall report back to the Board on the activity carried out in the exercise of the powers assigned to him or her;
assessed the progress of operations taking into consideration, in particular, the information received from the Chief Executive of the Company and the Chief Executives of the main subsidiaries, analysing the businesses and the evolution of the income and equity situation of the Company and of the Group; - examined and gave prior approval to transactions put in place by the issuer and examined those of the subsidiaries that have a significant strategic importance. To this end the Company at the Board of Directors Meeting held on October 29 2012 defined its parameters for measuring significance, adopting a special procedure;
carried out during the meeting held on March 9 2016 a self-assessment of the size, composition and functioning of the Board of Directors itself and of its committees, taking into account elements such as the professional characteristics, experience, even managerial experience, and the gender of its members as well as how long they have been on the Board;
before the appointment of a new Board, can give the Shareholders its views on the managerial and
professional figures whose presence on the Board would be considered useful;
Regarding the further activities of the Board of Directors on the subject of "Control and risk system" reference should be made to paragraph 7) "System of internal control and risk management". Art. 1 of the Code of Conduct of COFIDE S.p.A., attached to this Report, gives guidelines on the maximum number of positions of Director or Statutory Auditors approved by the Board of Directors on October 29 2012, which set limits in terms of number of positions that can be held by Executive and non-Executive Directors of COFIDE in Significant Companies, as defined by the same Board.
It should be noted that Mr Rodolfo De Benedetti, in his role as Executive Chairman, was assigned managerial powers in the light of the experience he has gained over the years in managing the Group, and to provide a governance that is the most suitable and functional possible given the characteristics of the Company.
Consequently, on April 29 2016, the Board of Directors of the Company assigned the following powers to the Executive Chairman of the Company, Mr Rodolfo De Benedetti:
the legal representation of the Company and with it the power with his sole signature to represent the Company with third parties, whether public or private, before any judicial or administrative authority and to sign in his role as above any document, deed, agreement and correspondence in the name of and on behalf of the Company and with the right to have someone else replace him;
all powers of ordinary and extraordinary administration of the Company, to be exercised with his sole signature, and thus the power to make any decision useful or necessary for the achievement of the Company object except for matters regarding:
(i) matters, transactions or resolutions reserved by law, by the Company Bylaws, to the exclusive competence of the Board of Director as a body;
(ii) the following categories of transaction:
the purchase, sale or subscription of equity investments where: (1) the payment or – where this is not in the form of money – the transaction value assigned to the same is higher than Euro 40 million: (2) the sale (or exchange) refers to investments recorded in the balance sheet with a value of over Euro 25 million; (3) the transaction involves the acquisition or the loss of control, as per the terms of Art. 2359 of the Civil Code, in companies or entities of another kind or nature;
the purchase or sale on any account of businesses or business arms for a price or with a value of over Euro 40 million;
any other investment transaction of any kind and on any account and in any manner (including the payment of capital contributions or the conversion of receivables into capital), taking on debt or making loans of any kind or issuing guarantees and in general any other deal the value of which is over Euro 40 million;
any decision that the Company may make relating to transactions or decisions of the subsidiaries which may, in any way or on any account, result in a reduction of the stake held by the Company to below the threshold of control;
(iii) the most important transactions with related parties identified as such on the basis of criteria identified in Annex 3 of the "Regulations giving instructions on the subject of related party transactions" approved by Consob with its Resolution no. 17221 of March 12 2010, as well as any other transactions with related parties of more importance that will be identified by the internal procedures adopted by the Board of Directors as per the terms of Articles 4 and 8 of the aforesaid "Regulations giving instructions on the subject of related party transactions", competence for which is reserved for the Board of Directors.
9
For the rules of a general nature relating to the composition and functioning of the Board of Directors, reference should be made to what is stated in Art. 2 and Art. 3 of the Code of Conduct of COFIDE S.p.A. attached to this document, and also to what is stated in Art. 1 of the same regarding the functions carried out by the Chairman.
The Board currently consists of nine Directors, one of whom has executive status (the Chairman), while eight are non-executive. In consideration of their number and their authority, the non-executive Directors provide a guarantee that their judgment shall have significant weight in the resolutions adopted by the Board; they each bring their own individual expertise to Board debates and contribute to the adoption of decisions in the interest of the Company.
Five non-executive Directors are independent. The composition of the Board of Directors of the issuer is therefore appropriate to guarantee adequate conditions of operational independence, aimed at maximizing the economic and financial objectives of the same issuer.
It should be remembered that the mandate of the current Board of Directors will terminate with the approval of the Financial Statements for the year ended December 31 2018.
When they were appointed all the Directors filed declarations in which they attested there were no reasons why they should not be elected nor was there any incompatibility prescribed by law and that they possessed the requisites of integrity and professionalism required by current legislation and by the Company Bylaws.
The Directors were drawn from the sole list presented by the majority shareholder F.LLI DE BENEDETTI S.p.A. - owner as of the date of the AGM – of 21.335% of the share capital. The following chart shows the composition of the Board of Directors:
| Name | Year of birth |
Position | In office since |
In office until |
List | Exec. | Non Exec. |
Indep. Code of Conduct |
Indep. TUF |
% B of D |
Other positions |
Position held since |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| De Benedetti Rodolfo |
1961 | Chairman | 29.04.2016 | 31.12.2018 | M | X | 100 | 5 | 09.06.1986 | |||
| Candiani Silvia |
1970 | Director | 29.04.2016 | 31.12.2018 | M | X | X | X | 71 | / | 29.04.2013 | |
| Cremona Massimo |
1959 | Director | 29.04.2016 | 31.12.2018 | M | X | X | X | 100 | 5 | 27.04.2007 | |
| De Benedetti Edoardo |
1964 | Director | 29.04.2016 | 31.12.2018 | M | X | 100 | 1 | 29.04.2013 | |||
| De Benedetti Marco |
1962 | Director | 29.04.2016 | 31.12.2018 | M | X | 100 | 7 | 15.03.1994 | |||
| Dubini Paola |
1963 | Director | 29.04.2016 | 31.12.2018 | M | X | X | X | 71 | / | 16.05.2011 | |
| Ferrero Pierluigi |
1942 | Director | 29.04.2016 | 31.12.2018 | M | X | 100 | / | 27.04.2001 | |||
| Guasti Francesco |
1947 | Director | 29.04.2016 | 31.12.2018 | M | X | X | X | 71 | 3 | 30.04.2009 | |
| Porcari Maria Serena |
1971 | Director | 29.04.2016 | 31.12.2018 | M | X | X | X | 100 | 1 | 29.04.2016 |
Number of Board of Directors Meetings: 7
Key:
List: M/m: according to whether the Director was elected from the list voted by the majority or one voted by a minority.
Independent (Code of Conduct and T.U.F.): indicates whether a Director can be qualified as independent.
% CdA: shows the Director's attendance, in percentage terms, at the Board Meetings held during the year.
Other positions: shows the total number of positions held in other listed companies, financial companies, banks, insurance companies or other companies of a significant size.
Mr Carlo De Benedetti is the Honorary Chairman of the Company.
The Board of Directors notes and publishes each year the positions of Director or Statutory Auditor held by the Directors in other listed companies and in financial companies, banks, insurance companies or other companies of a significant size (Attachment A). It should be noted that the personal and professional profiles of each Director are given as an attachment to this report.
During 2016 the Board of Directors met seven times. The meetings lasted for an average for about two
hours. For the year 2017 six meetings have been scheduled. The Executive responsible for the
preparation of the Financial Statements and corporate documents (appointed by the Board of Directors
on October 26 2009), Mr Giuseppe Gianoglio, attends the meetings of the Board of Directors.
On the subject of passing information to the Board, in accordance with what is set out in the Code of Conduct of Borsa Italiana S.p.A., the Executive Chairman reports back regularly (at least every three months) to the Board and at the same time to the Board of Statutory Auditors on the action taken in the exercise of the powers assigned to him.
The Executive Chairman also gives adequate information (at least once every three months) on any non-typical or unusual transactions to the Board of Directors and the Board of Statutory Auditors.
The following chart shows the composition of the Committees set up by the Board: the Appointments and Compensation Committee, the Control and Risk Committee, and the Committee for Related Party Transactions (whose members are the same as those of the Control and Risk Committee).
| Name | Appointments & Compensation Committee |
% attendance of A.C.C. meetings |
Control & Risk Committee (*) |
% attendance of C.R.C. meetings |
Committee for Related Party Transactions |
% attendance of CRPT Meetings |
|---|---|---|---|---|---|---|
| Cornelli Francesca (until 29.04.2016) |
X | 100 | X | 100 | X | / |
| Cremona Massimo | X | 100 | X | 100 | X | 100 |
| Robotti Roberto (until 29.04.2016) |
X | 100 | X | / | ||
| Dubini Paola | X | 100 | X | 100 | X | 100 |
| Guasti Francesco | X | 0 | X | 100 | X | 100 |
| Porcari Maria Serena | X | 100 | X | 100 | ||
| Number of Committee meetings | 2 | 5 | 3 |
Key:
% CC: shows the Director's attendance in percentage terms at the meetings of the Appointments and Compensation Committee held during the year.
% CRC: shows the Director's attendance in percentage terms at the meetings of the Control and Risk Committee held during the year.
% CRPT: shows the Director's attendance in percentage terms at the meetings of the Committee for Related Party Transactions held during the year.
(*) The members of the Control and Risk Committee are the same as those of the Committee for Related Party Transactions.
In accordance with the terms of the Code of Conduct of Borsa Italiana S.p.A., on April 29 2016 the Board of Directors appointed as Lead Independent Director Mr Massimo Cremona to whom all the non-executive Directors can refer (especially the Independent Directors) to enable them to make a better contribution to the activity and the running of the Board.
The Lead Independent Director collaborates with the Chairman to guarantee that the Directors receive full information flows on a timely basis. Among other things the Lead Independent Director, either independently or at the request of other Directors, also has the right to call a meeting of just the Independent Directors to discuss topics considered of interest to the running of the Board of Directors or the management of the Company.
Regarding induction programs and in relation to regulatory requirements on the subject, a special briefing session was organized for directors and statutory auditors with the assistance of external consultants. The invitations to the induction session were sent out in plenty of time so that as many people as possible were able to attend. The session was held on May 30 2016, with the proceedings occupying most of the day. The presentations covered the following topics: "Corporate Governance and the liability of the Directors – Sustainability Report – Management and Coordination activities" and were followed by a lively debate, which was an opportunity to examine the individual aspects of the topics dealt with in greater detail.
Art. 3 of the attached Code of Conduct of COFIDE S.p.A. gives the requisites on the basis of which the Company – in compliance with the recommendations of the Code of Conduct of Borsa Italiana S.p.A. and what is stipulated in Art. 147-ter paragraph 4 of the T.U.F. – considers Directors as Independent.
The Board of Directors meeting held on April 29 2016 verified the existence of the requisites for independence set out in the Code.
During 2016 the Board of Statutory Auditors verified that the criteria and checking procedures adopted by the Board of Directors for assessing the independence of its members were being applied correctly. On March 14 2016 the Independent Directors met without the other Directors to give their opinion on the quality of the information transmitted to the Board of Directors by the company and the Chief Executive Officer.
The principles underpinning the institution and functioning of the internal committees set up by the Board of Directors are set out in Art. 4 of the attached Code of Conduct of COFIDE S.p.A.
As permitted by the Code of Conduct of Borsa Italiana S.p.A., the Company has merged the functions of the Appointments Committee and of the Compensation Committee into one single committee, whose members include profiles with adequate competence in finance or compensation policy and which is known as the Appointments and Compensation Committee, approving its rules at the Board of Directors Meeting held on October 29 2012.
The Internal Control Committee set up by the Board of Directors on May 4 2000 has taken the name of Control and Risk Committee and at least one of its members has adequate experience in accounting and finance or risk management. This Committee also carries out the functions of the Committee for Related-Party Transactions in compliance with the Rules for related-party Transactions.
The Committee for Related-Party Transactions is called upon to exercise its functions with regard to:
giving a reasoned non-binding opinion on the interest of the Company to enter into Transactions of lesser importance and on the substantial economic benefit and correctness of the conditions of the same;
in the case of Transactions of greater importance, it is involved in the negotiation and the investigatory stages. When these stages are over, it gives a binding opinion on the Company's interest to execute the Transaction and on the substantial economic benefit and correctness of the conditions of the same.
As indicated above in letter l) of the section of the Report entitled "Information on the ownership structure", reference should be made to the information given in Art. 5 of the attached Code of Conduct of COFIDE S.p.A. and to the articles of the Bylaws reproduced therein.
The Appointments and Compensation Committee is made up of Independent Directors: Mr Francesco Guasti (Chairman of the Committee), Mr Massimo Cremona and Ms Paola Dubini.
On the subject of the appointment of the Directors, the Appointments and Compensation Committee has the functions set out in detail in Art. 6 of the attached Code of Conduct of COFIDE S.p.A.
The aim of the compensation policies of the Company is described in Art. 6 of the attached Code of Conduct of COFIDE S.p.A.: more specifically the compensation policy is established according to criteria appropriate for attracting, retaining and motivating people with professional qualities suitable for managing the Group effectively.
The compensation assigned to the Executive Chairman of the Board of Directors and to the nonexecutive Directors for being on one or more committees is a fixed sum and is a determined according to the commitment required of each of them.
The Appointments and Compensation Committee carries out the functions detailed in the already cited Art. 6 of the Code of Conduct of COFIDE S.p.A.
The compensation in 2016 of each director is given in the charts attached to the "Compensation Report" prepared in compliance with Art. 84-quater of Consob Resolution 11971/99, approved by the Board of Directors on March 13 2017 and made available to the Annual General Meeting of the Shareholders called to approve the Financial Statements for the year ended December 31 2016. The compensation policy of COFIDE S.p.A. is very simple as it involves only the payment of a fee – approved by the Shareholders' Meeting – to the members of the Board of Directors. .
Compensation for the position of Chairman and the fees payable to non-executive Directors with special duties are determined by the Board of Directors at the proposal of the Appointments and Compensation Committee, with the favourable opinion of the Board of Statutory Auditors. There are no compensation plans for employees based on the shares of the Company.
There is no compensation for Directors in the event of resignation, cancellation without just cause, or termination of the directorship following a successful takeover bid.
The Committee met twice and the meetings lasted for half an hour. The minutes of the meetings are taken as is standard practice.
The internal control system is the set of rules, procedures and organizational structures that make it possible to identify, measure, manage and monitor the main risks. The aims of the Control and Risk system, and the bodies and functions responsible for it are described in detail in Art. 7 of the attached Code of Conduct of COFIDE S.p.A.
During the year 2016 and within the sphere of the Control and Risk System, the Board of Directors carried out the following actions:
As per Art. 7, "System of internal control and risk management", of the Code of Conduct (Attachment B), the Chairman is the executive director in charge of ensuring that the internal control system works adequately and effectively, and this he does partly by defining suitable procedures that will guarantee sound and efficient operations and will identify, pre-empt and manage, as far as possible, any financial and operational risk and any fraud against the Company, availing himself of the assistance of the Control and Risk Committee. The Board of Directors with the resolution adopted on May 4 2000 set up the Internal Control Committee (subsequently re-named Control and Risk Committee) which was given the function of preparing proposals and acting in a consulting capacity and which acts along the lines set out in the Code of Conduct.
The Chairman of the Board of Statutory Auditors or another Statutory Auditor designated by the said Chairman takes part in the work of the Committee.
At present the Committee is formed of four Independent Directors with sufficient experience in finance, specifically: Mr Massimo Cremona (Chairman of the Committee), Ms Paola Dubini, Mr. Francesco Guasti and Ms Maria Serena Porcari. It should be noted that on March 11 2013 the Board of Directors appointed Mr Andrea Bergalio as head of the Internal Auditing function.
During 2016, the Committee met five times and minutes were taken of the meetings, which lasted an average of an hour and a half.
The appointment and the functioning of the statutory auditors are regulated by Art. 22 of the Company Bylaws as reproduced in Art. 8 of the "Code of Conduct of COFIDE S.p.A."
The Statutory Auditors are selected from people who can be qualified as independent on the basis of the criteria established for the Directors. During 2016 the Board of Statutory Auditors checked that the above criteria were being complied with, ensuring that the results of the check were shown in this report.
The Board of Statutory Auditors currently in office – the mandate of which expires with the approval of the Financial Statements as of December 31 2016 – is made up as follows:
| Name | Year of birth |
Position | In office since |
In office until |
List | Indep. Code of Conduct |
% attendance at meetings of B. of S.A. |
Other positions |
Date first appointed |
|---|---|---|---|---|---|---|---|---|---|
| Zingales Riccardo | 1960 | Chairman | 30.06.2014 | 31.12.2016 | M | X | 100 | 2 | 30.04.1999 |
| Dellatorre Antonella | 1971 | In office | 30.06.2014 | 31.12.2016 | M | X | 100 | / | 30.06.2014 |
| Bracco Tiziano | 1971 | In office | 30.06.2014 | 31.12.2016 | M | X | 100 | / | 27.04.2005 |
| Nani Luigi | 1959 | Alternate | 30.06.2014 | 31.12.2016 | M | X | / | / | 24.04.2002 |
| MacchiorlattiVignat Luigi |
1963 | Alternate | 30.06.2014 | 31.12.2016 | M | X | / | 2 | 24.04.2002 |
| Zambon Paola | 1969 | Alternate | 30.06.2014 | 31.12.2016 | M | X | / | 1 | 29.04.2013 |
KEY:
List: "M/m" according to whether the Statutory Auditor was elected from the list voted by the majority or by a minority. Indep: At the meeting held on April 27 2015 the Board of Statutory Auditors judged that its members who had been in office for more
than nine years had the requisite of independence. The Board of Directors at the meeting held on the same date, after hearing the opinion of the Control and Risk Committee, acknowledged and agreed with the opinion of the Board of Statutory Auditors.
% attendance: shows the attendance in percentage terms of the Statutory Auditor at the meetings of the Board of Statutory Auditors. Other positions: shows the number of positions of director or statutory auditor held by the individual in other Italian listed companies.
The full list of these positions is given in an attachment to this document (Attachment A).
During the year 2016 the Board of Statutory Auditors met thirteen times and the meetings lasted an average of an hour and a half.
On their appointment all the Statutory Auditors filed declarations in which they attested that there were no reasons why they could not be elected, that there was no incompatibility as per the terms of the law and that they possessed the requisites of integrity and professionalism required by current legislation and included in the Company Bylaws.
The Company has always endeavoured to establish and maintain an effective dialogue with its Shareholders and with the market, using various forms of communication such as the following: presenting the results of the Company and the Group during Shareholders' Meetings using slides, meeting with financial analysts and institutional investors in Italy and abroad, informing the public by making the corporate governance documents required by law, press releases and presentations available on the website of the Company.
The Company also adheres to the principles of the Guide for Information to the Market.
To this end the Chief Executive Officer appointed Mr Michele Cavigioli, Central Finance Manager of the subsidiary CIR S.p.A., as the head of the Investor Relations function with responsibility for managing the flow of information to Shareholders, financial analysts and institutional investors, in compliance with the rules established for the disclosure of Company information and documents.
It has always been the policy of the Company to use the Shareholders' Meeting as an opportunity to give the Shareholders information about the Company and the Group and its outlook for the future, while complying with the procedure concerning price-sensitive information.
All the Directors and Statutory Auditors endeavour to be present at Shareholders' Meetings as far as possible but particularly those Directors who can make a positive contribution to the debate in view of the positions that they hold.
The procedures and terms for calling Shareholders' Meetings are regulated by Art. 9 of the Company Bylaws reproduced in the attachment "Code of Conduct of COFIDE S.p.A."
The Shareholders' Meeting held on April 27 2001, in accordance with the terms of the Code of Conduct of Borsa Italiana S.p.A., approved and subsequently updated a set of Regulations for conducting Shareholders' Meetings, which can be consulted on the website of the Company in the section "Corporate Governance".
The Board of Director makes available to the Shareholders a booklet containing the items on the Agenda of the Shareholders' Meeting within the time frame laid down by law.
On March 7 2003 the Board of Directors approved the CODE OF ETHICS OF THE COFIDE GROUP with the aim of defining in a clear and transparent way the code of values underpinning the action of the Group in the pursuit of its objectives and establishing principles of conduct which are binding for Directors, employees and other individuals who maintain relations with the Group.
The text of the CODE OF ETHICS can be consulted on the company website in the section "Corporate Governance".
The Sustainability Report of the CIR group for the year 2016 was prepared in accordance with the "G4 Sustainability Reporting Guidelines" published in May 2013 by the GRI (Global Reporting Initiative). The Sustainability Report is the main instrument for reporting the performance obtained by the group in the economic, social and environmental sphere and for highlighting its commitment to conducting its business with the aim of creating value not only for the organization but also for its stakeholders.
The process of collecting data and information for the purpose of the preparation of the Report was managed collaboratively with the various departments of the companies that make up the CIR group, with the aim of giving a clear and precise indication of the information considered significant for the stakeholders according to the principles of balance, comparability, accuracy, timeliness, clarity and reliability, as expressed in the GRI guidelines.
Legislative Decree no. 231/2001 containing the "Discipline regulating the administrative liability of legal entities, companies and associations without legal status, pursuant to Article 11 of Law no. 300 of September 29 2000" and subsequent amendments and additions, introduced the criminal liability of entities for any fraudulent acts committed by people with a special functional relationship with the Company, where the alleged misdeed was carried out in the interest or to the advantage of the same Company; this liability was subsequently among other things extended by D.Lgs no. 61/2002 to cover corporate offences.
The decree provides that exemption for the company from such liability is possible provided that it can be demonstrated that the company had adopted and effectively put in place organizational models for the prevention of criminal offences and that it had given the task of monitoring the correct functioning of such models and making sure that they are fully updated to a controlling body equipped with independent powers to take the initiative and to carry out a control function.
On April 30 2003, with the aim of preventing the corporate offences envisaged by Legislative Decrees nos. 231/2001 and 61/2002 from being committed, the Board of Directors of the Company among other things set up a Supervisory Body with the competence and function established by the Code of Ethics. On October 29 2004 the Board of Directors also approved the "Organization Model", which was later supplemented after the broadening of the scope of the regulations included in D.Lgs. 231/2001.
The Board of Directors Meeting held on April 29 2013 after the Shareholders' Meeting approved a motion to assign the activity of the Supervisory Body, as per D.Lgs. 231/0, to the Board of Statutory Auditors who will carry out this function in conjunction with the internal auditing function.
The Supervisory Body of COFIDE S.p.A. monitored the functioning and observance of the Organization, Management and Control Model adopted by the Company, checking that it was effective and assessing any possible updates, in accordance with the programme approved by the Board of Directors Meeting held on March 14 2016.
With the approval of the Financial Statements for the year ended December 31 2016, the legal audit mandate awarded by COFIDE S.p.A. to the company Deloitte&Touche S.p.A. for the period 2008- 2016 came to an end.
In order to manage the transition to the new auditor in the best possible way, it was decided to award the legal audit mandate one year earlier than its natural maturity. Therefore, the Annual General Meeting held on April 29 2016 resolved to give the legal audit mandate for the years 2017-2025 to the firm of auditors KPMG S.p.A.
The Company is subject to management and coordination by its parent company F.LLI DE BENEDETTI S.p.A.
List of the positions held by the Directors of COFIDE S.p.A. in other companies listed on regulated markets, in financial companies, banks, insurance companies, and also in non-listed companies of a significant size (at December 31 2016)
| De Benedetti Rodolfo | Chairman of the Board of Directors of CIR S.p.A. Director of Gruppo Editoriale L'Espresso S.p.A. Director of Sogefi S.p.A.* Director of Decalia Asset Management S.A. Amministratore di AON Italia |
|---|---|
| Candiani Silvia | - no other positions - |
| Cremona Massimo | Director of UBS Fiduciaria S.p.A. Chairman of the Board of Statutory Auditors of Banca Generali S.p.A. Statutory Auditor of Ermenegildo Zegna Holditalia S.p.A. Chairman of the Board of Statutory Auditors of Metro Italia Cash and Carry S.p.A. Chairman of the Board of Statutory Auditors of Sasol Italy S.p.A. |
| De Benedetti Edoardo | Director of CIR S.p.A.* |
| De Benedetti Marco | Chairman of the Board of Directors of Twin-Set Simona Barbieri S.r.l. Chairman of the Board of Directors of Marelli Motori S.p.A. Director of CIR S.p.A.* Director of NBTY Inc. Director of Moncler S.p.A. Chairman of Comdata S.p.A. Director of Logoplaste S.A. |
| Dubini Paola | - no other positions – |
| Ferrero Pierluigi | - no other positions - |
| Guasti Francesco | Director of Ceresio Sim S.p.A. Director of Corriere del Ticino Holding S.A. Director of Società Editrice del Corriere del Ticino S.A. |
| Porcari Maria Serena | Director of VITA Società Editoriale S.p.A. |
| * Companies of the Group |
List of the positions held by the Statutory Auditors and Alternate Auditors of COFIDE S.p.A. in other Italian listed companies (at December 31 2016).
| Zingales Riccardo | Chairman of the Board of Statutory Auditors of Sogefi S.p.A. Statutory Auditor of CIR S.p.A. |
|---|---|
| Bracco Tiziano | - no other positions - |
| Della Torre Antonella | - no other positions - |
| Nani Luigi | - no other positions - |
| Macchiorlatti Vignat Luigi | Alternate Auditor of CIR S.p.A. Alternate Auditor of Sogefi S.p.A. |
| Zambon Paola | Alternate Auditor of CIR S.p.A.* |
* Companies of the Group
The Code of Conduct of COFIDE S.p.A. (hereinafter "COFIDE" or the "Company") contains a description of the main duties and functions of the corporate bodies of the Company and of the internal control and risk management structure of the Company.
The description of these duties and functions is carried out in a structured way in a single document in which it is possible to find not only content but also specific reference to the applicable regulatory environment: the provisions of the law and of regulations, the terms of the Company Bylaws, and the principles of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. with which the Company complies.
On this subject at the Board of Directors Meeting held on October 29 2012, following the new rules of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. introduced in December 2011, the Company updated its own corporate governance and approved internal procedures as indicated in the Code.
In order to incorporate the changes introduced in the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. in July 2014 and July 2015, the Board of Directors has subsequently updated the Code of Conduct of the Company.
Below are the provisions of the Company Bylaws on the subject of the role of the Board of Directors
mandatees in general for certain acts or categories of acts
The Directors must report back to the Board of Directors and to the Board of Statutory Auditors on activities carried out and on anything else required by law at regular intervals at least once every three months when Board Meetings are held or whenever particular timing needs make it desirable. This report shall be made directly, in writing, or verbally and/or by telephone.
In application of the terms of Art. 1 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A., the Board of Directors:
On the basis of the internal procedures approved by the Board of Directors, examines and approves the strategic and financial plans of the Company and also examines the consolidated strategic, business and financial plans of the direct subsidiary CIR and the latter's subsidiaries at the head of the groups in the various business sectors as presented by their respective Chief Executive Officers, assessing whether these plans are consistent with those of the Company and periodically monitoring their implementation. The procedures stipulate that the business plans and the budgets prepared by each company of the group should be the subject of discussion with the Chief Executive of COFIDE. The Chief Executive of COFIDE examines and evaluates the business plans and budgets of the companies of the group, availing him/herself, when there are elements of strong impact for COFIDE, of the contribution of the Chairman of the Control and Risk Committee but in any case keeping the Chairman of the Board of Directors informed. For the budgets, presentation to the respective Boards of Directors takes place by the end of the month of January;
Defines the nature and level of risk compatible with the strategic objectives of the Company, as illustrated in Art. 7 below, taking into account in terms of possible impact, of the main risks relating to the businesses of the subsidiaries, which in their turn must define the nature and level of risk compatible with the specific aspects of their business. The Company carries out a global risk assessment every year when the budget is approved;
The Directors act and adopt resolutions independently on the basis on their knowledge and good judgment and they accept the position when they consider that they can dedicate the necessary time to carrying out their duties, bearing in mind also their commitment in relation to their work and professional activities, the number of directorships or positions of statutory auditor that they hold in other companies listed on regulated markets (even foreign ones), finance companies, banks, or insurance companies or companies of a significant size. They are also required to inform the Board of Directors of any other activities they may have in competition with the issuer and of any significant changes that occur in the positions they hold in other companies.
Still in application of the terms of Art. 1 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. the Board of Directors has approved the following:
Guidance regarding the maximum number of positions as director or statutory auditor in other companies listed on regulated markets, including foreign markets, in financial companies, banks, insurance companies or companies of a significant size ("Significant Companies"):
The general criteria described above can always be waived in relation to one or more directors with a resolution taken by the Board of Directors giving the reasons for the waiver. In deciding on the waiver the Board of Directors may also take into account the director's attendance record at COFIDE board meetings and committee meetings.
It should also be noted that the Board of Directors assesses the independence of its Directors at least once a year, taking into account the information that the individuals involved are required to produce. While the terms of Art. 147-ter, paragraph 4, of the Finance Consolidation Act (T.U.F.) remain applicable, the Company intends to introduce the obligation for any Director who has lost the qualification of independence as per the terms of the Code of Conduct (Criterion 3.C.1) to resign his or her position, without prejudice for the right of the Board of Directors to evaluate each specific case possibly allowing waivers to the rules.
Information will be given of any waivers of the above approved by the Board of Directors in the Annual Report on Corporate Governance.
Below is what the Company Bylaws stipulate on the subject of the Chairman of the Board of Directors
LEGAL REPRESENTATION
In application of what is stated in Art. 1 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. the Chairman of the Board of Directors:
issuer operates, of the dynamics of the Company and the evolution thereof, of the principles of correct risk management, as well as of the regulatory environment and the internal rules on the subject;
- can ask the Chief Executive Officer, even at the request or one or more directors, for executives of the Company and of the companies of the group to be present at Board meetings to explain items in greater detail.
The Board of Directors is made up of executive and non-executive Directors who have adequate competence and professionalism.
The non-executive Directors bring their specific competences to the Board discussions, contributing to the adoption of judicious decisions and paying particular attention to the areas in which conflicts of interest can emerge.
The composition of the Board of Directors of the Company – even in relation to number, competence, authoritativeness and availability of time that the nonexecutive Directors have – must be suitable to guarantee conditions of managerial autonomy, directed towards the maximization of the economic and financial objectives of COFIDE.
The composition of the Board of Directors also respects the balance between the genders prescribed by current legislation and by Art. 11 of the Company Bylaws reproduced further on.
The Company complies with the so called ban on interlocking directorates, which was introduced by Art. 2.C.5 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A., i.e. the principle that the chief executive officer of an issuer cannot take a position as director of another issuer not belonging to the same group, in which a director of the issuer is chief executive officer.
The Directors are expected to know their duties and the responsibilities inherent in the position.
The Chairman makes sure that the Directors and Statutory Auditors, following their appointment and during their mandate, can take part in initiatives, in the most appropriate formats, aimed at giving them an adequate knowledge of the business sector in which the Company operates, of the Company dynamics and the evolution thereof, of the principles of correct risk management, and of the relevant regulatory environment and the internal rules on the subject. As far as information on the business sectors is concerned, each executive Director gives a briefing on the performance of the business at the meetings of the Board of Directors on an ongoing basis and in a more extended form at least once a year.
In relation to the regulatory environment, special information sessions may be organized for the Directors with the support of professional training experts when the Board of Directors is renewed and, subsequently, any time that changes in the regulatory framework make an update on the subject appropriate.
The Board of Directors designates a lead independent director. The lead independent Director is a point of reference who coordinates the requests and the contributions of the non-executive Directors, particularly the independent Directors. He or she collaborates with the Chairman to guarantee that the Directors receive full information flows on a timely basis. Among other things the Lead Independent Director, either independently or at the request of other Directors, also has the right to call a meeting of just the independent Directors to discuss topics considered of interest to the running of the Board of Directors or the management of the Company.
Regarding the possibility that issuers adopt mechanisms ensuring different maturities of all or some of the members of the administrative body (a staggered board), the Company did not deem it necessary to adopt this measure as it is not appropriate given the ownership structure of COFIDE.
The Independent Directors make up the majority of the members of the Board of Directors.
In accordance with what is recommended by the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. "Independent Directors" are considered as those directors:
or that they are not, or have not been in the previous three years, employees of one of the above entities;
d) who do not receive, or have not received in the previous three financial years, from the Company or from one of its subsidiaries or parent companies any significant remuneration in addition to their "fixed" fee as non-executive Directors of the Company, and the fee for being on the committees recommended by the Code of Conduct for listed companies, even in the form of participation in performance-related incentive plans even those involving shares;
Should any of the situations listed in the Code of CONDUCT OF BORSA ITALIANA S.P.A. as conditions for the non-independence of non-executive Directors exist, the Board of Directors shall examine on a case-by-case basis whether or not the individual has the necessary requisites to be qualified as an Independent Director. On the basis of paragraph 4, Art. 147-ter of the T.U.F., at least one member of the Board of Directors, or two if the Board of Directors has more than seven members, must have the requisites of independence established for statutory auditors and therefore in accordance with the terms of paragraph 3, Art. 148 of the T.U.F., the following individuals cannot be considered as independent:
The independence of the Directors is assessed by the Board of Directors when they are appointed and then once a year. The Board gives the outcome of its assessment in the Report on Corporate Governance.
The Board of Directors sets up from among its members one or more committees, the function of which is to make proposals and give advice, defining their duties. The committees consist of no less than three members all of whom are independent and who are coordinated by a chairperson. Minutes are taken of each committee meeting and the Chairman of each committee reports back on the same at the first Board of Directors Meeting.
The chairperson can from time to time, if he or she feels it is necessary, invite other individuals who are not on the committee but whose presence could be useful for the proceedings of the meeting.
For organizational reasons the functions of the Appointments Committee and those of the Compensation Committee are combined in a single committee, called the Appointments and Compensation Committee, whose members must include profiles with adequate competence in finance or compensation policy.
The Appointments and Compensation Committee and the Control and Risk Committee function according to what is set out in their respective Rules.
The Control and Risk Committee, of which at least one member must have adequate experience in accounting and finance or risk management, as well as advising, making proposals and monitoring the Control and Risk System, also carries out the function of Committee for Related Party Transactions in accordance with the Rules for Related Party Transactions.
The duties assigned to the individual Committees of the Board of Directors are illustrated in the following articles.
Below are the terms of the Company Bylaws on the subject of the appointment of Directors
percentage that may be decided upon in accordance with the law or with regulations, can present lists of candidates. They must be able to prove that they own the number of shares required within the terms and following the procedures laid down in legislation applicable. Shareholders who alone or together with other shareholders represent a total of less than 20% of the share capital can present lists containing no more than three candidates.
second most votes and must not be connected in any way, not even indirectly, to the Shareholders who presented and voted for the first list which received the most votes.
When application of the procedure described in a) and b) above does not give the gender balance required by current legislation, the last director elected from the list that obtained the most votes belonging to the most represented gender shall lapse and shall be replaced by the first candidate not elected from the same list belonging to the least represented gender, in compliance with the requirements of the law. Otherwise, the Shareholders' Meeting shall make up the number of the administrative body with the majorities required by law, ensuring compliance with the terms of the law.
In application of what is stipulated in Art. 5 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. and in the Rules of the Appointments and Compensation Committee approved by the Board of Directors, in relation to the appointment of the Directors, the Committee carries out the following functions:
The Succession Plan for Executive Directors is approved by the Board of Directors on the basis of the investigatory activity carried out by the Appointments and Compensation Committee. The Plan should give a clear definition of the objectives, instruments and timing of the process, should have the involvement of the Board of Directors and a clear allocation of competences, even with regard to the preliminary stage of the procedure.
Compensation policies aim to guarantee competitiveness in the labour market in line with the objectives of developing and rewarding the loyalty of human resources, as well as using different compensation tools according to individual professionalism and competence.
The Company keeps its compensation in line with market benchmarks, applying rewarding criteria when situations of particular merit arise.
The remuneration of non-executive Directors on the basis of the commitment required of each of them is established by the Shareholders' Meeting; the Board of Directors also determines the fee for the position of Chairman and the fees for directors holding special positions.
The Board of Directors at the proposal of the Appointments and Compensation Committee, defines a policy for compensating Directors and Executives with strategic responsibilities.
In application of principle 6.P.5. of the CODE OF CONDUCT OF BORSA ITALIANA S.p.A., when the position of an executive director or a general manager is terminated, the Company after following internal processes leading to the assignment or recognition of compensation and/or other benefits, gives full details of this in a press release to the market.
The remuneration of Directors holding special positions is, in accordance with the Bylaws, established by the Board of Directors at the proposal of the Appointments and Compensation Committee after hearing the opinion of the Board of Statutory Auditors, and is based on the guidelines established in the compensation policy.
In the preparation of any share-based compensation plans, the Board of Directors ensures that the criteria stipulated in the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. are observed.
In application of what is stated in Art. 6 of the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. and in the Rules of the Appointments and Compensation Committee approved by the Board of Directors, in relation to compensation, the Committee carries out the following functions:
It formulates opinions in conjunction with the Control and Risk Committee on proposals regarding the compensation policies for the head of internal auditing and the executive responsible for the preparation of the financial statements and corporate governance documents;
It formulates proposals for the compensation of the Chief Executive Officer and the Directors holding special positions, which may also include compensation plans involving the assignation of stock options or the provision of other share-based incentive plans;
The Board of Directors approves the general principles of the internal control and risk management system.
More specifically, the Board of Directors Meeting held on October 29 2012 adopted, with effect as from January 1 2013, its Guidelines on the subject of the System of Internal Control and Risk Management:
Control and Risk System
The Control and Risk System is the collection of rules, procedures and organizational structures that aim to make it possible, through an adequate process of identification, measurement, management and monitoring of the main risks, to conduct a healthy and correct company that is consistent with its established objectives and to foster judicious decision making. The Control and Risk System contributes towards guaranteeing that the Company's capital is safeguarded and ensuring the efficiency and effectiveness of company processes, the reliability of disclosures made to the Company bodies and to the market, and compliance with the law and regulations as well as with the Company Bylaws and internal procedures.
The Control and Risk System helps reduce and limit errors, fraudulent infringement of control systems and unexpected events although it cannot eliminate the possibility of wrong decisions.
Apart from these guidelines, the Control and Risk System includes internal rules contained in the Bylaws and in Regulations on the subject of the division of competences and the delegation of responsibilities, including the Organization Model as per the terms of D.Lgs. 231/2001, the objectives and methods of evaluating risks and instructions on the subject of the administrative, accounting and financial system.
Duties of the bodies and functions of the Control and Risk System The bodies and functions responsible for the Control and Risk System are the following:
a) the Board of Directors;
b) the Director given responsibility for the Control and Risk System (the "Director Responsible");
h) the other corporate bodies and functions with competence on the subject of internal control and risk management.
All employees, within the sphere of their duties in the Company organization, contribute to the effective functioning of the Control and Risk System, carrying out their responsibilities with the necessary knowledge and understanding of the activity, the organization of the market in which the company operates and how it functions and of the risks and operational objectives of the Company.
The bodies and functions listed above operate each in accordance with its duties and competences and following the indications given in these Guidelines and in the rules of law, regulations and internal rules applicable.
The Board of Directors has ultimate responsibility for the Control and Risk System and defines its strategies in line with strategic objectives and the risk profile of the Company. Within the sphere of the Control and Risk System the Board of Directors:
a) Defines the policies of the Control and Risk System, making sure they are suitably amended and updated;
b) Identifies the nature and level of risk compatible with the strategic objectives of the Company, reassessing them whenever circumstances make it necessary;
c) On an annual basis assesses the adequacy, effectiveness and efficiency of the Control and Risk System in relation to the business of the company and the risk profile it wishes to have, taking into account the opinions on the subject of the Director Responsible and of the Control and Risk Committee;
d) Approves, at the proposal of the Control and Risk Committee on an annual basis in conjunction with the approval of the Annual Report and Financial Statements, the audit plan after hearing the Board of Statutory Auditors and the Director Responsible;
e) Evaluates, after hearing the Board of Statutory Auditors, the results set out by the legal audit firm in any letter containing suggestions that they may produce and in the report on the fundamental issues that emerged from the legal audit;
f) Appoints the Director Responsible;
g) Appoints from within its number a Control and Risk Committee and designates the Chairman thereof;
h) Approves the rules of the Control and Risk Committee and any amendments and updates to the same;
i) Appoints and revokes the appointment of the Head of Internal Audit, establishing his/her compensation in line with company policy, at the proposal of the Director Responsible and after obtaining a favourable opinion from the Control and Risk Committee and the Appointments and Compensation Committee and hearing the Board of Statutory Auditors;
j) Ensures that the Head of the Internal Audit function has adequate resources for carrying out his/her duties.
The Director Responsible is responsible for ensuring that the internal control system works well and is adequate. As a rule the Director Responsible coincides with the Chief Executive Officer.
The Director Responsible:
a) Deals with the identification of the main company risks and submits them periodically to examination by the Board of Directors;
b) Sees to the design, implementation and management of the Control and Risk System, setting up a process of coordination between the various bodies and the departments affected in order to maximize efficiency and reduce duplication;
c) Constantly verifies, partly on the basis of the reports presented by the Head of Internal Audit and at the indication of the Control and Risk Committee, the adequacy, effectiveness and efficiency of the Control and Risk System, proposing suitable amendments and updates to the Board of Directors;
d) Can ask the Head of Internal Audit to carry out checks in specific operating areas and on compliance with internal rules and procedures in the execution of company transactions, giving feedback on the same to the Chairman of the Board of Directors, the Chairman of the Control and Risk Committee and the Chairman of the Board of Statutory Auditors;
e) Refers back as soon as possible to the Board of Directors on any problems or critical areas that emerged in the execution of his/her duties and which have somehow come to his/her notice so that the Board of Directors can take appropriate action;
f) In carrying out his/her duties, can use the consulting services of the Control and Risk Committee.
The Control and Risk Committee carries out a consulting role, makes proposals and monitors the Control and Risk System.
The Control and Risk Committee:
a) Together with the executive responsible for the preparation of the company's financial statements and having heard the legal audit firm and the Board of Statutory Auditors, evaluates that the correct accounting standards are being used and that they are consistent for the purposes of the preparation of the statutory and consolidated financial statements for the year and presents the results of its evaluation to the Board of Directors as stated in letter f) below;
b) Expresses opinions on specific aspects regarding the identification of the Company's main risks, and in particular on the identification, measurement, management and monitoring of the Company's main risks;
c) Examines the reports on the assessment of the Control and Risk System prepared by the Internal Audit function and refers back to the Board of Directors with its own evaluation on the subject as required by letter f) below;
d) Monitors the independence, the adequacy, the effectiveness and the efficiency of the Internal Audit function and proposes any corrective action needed to the Board of Directors;
e) Can ask the Internal Audit department to carry out checks on specific operating areas, at the same time notifying the Chairman of the Board of Statutory Auditors, the Chairman of the Board of Directors and the Director Responsible;
f) Refers back to the Board at least once every six months, on the occasion of the approval of the Annual Report and Financial Statements and the Semi-annual Interim Financial Report, on its activities and on the adequacy of the Risk Management System;
g) Supports the assessments and decisions of the Board of Directors regarding the management of risks resulting from prejudicial events that have come to the notice of the Board of Directors, with an appropriate investigation;
h) Examines the audit plan and proposes that the Board of Directors adopt it;
i) Carries out the functions of a committee for transactions with related parties as per the terms of the procedure for transactions with the related parties of the Company;
j) Carries out any other functions that may be assigned to it at any time by the Board of Directors in relation to specific critical factors on the subject of the internal control and risk system of the issuer and of the Group.
The Control and Risk Committee is made up of at least 3 independent directors, of whom at least one has adequate experience in accounting and finance or risk management, and operates in accordance with the provisions of the internal rules approved by the Board of Directors, which describe the procedures for its appointment, its duties, how it functions, its powers and its expense budget.
The Chairman of the Board of Statutory Auditors or another Statutory Auditor designated by the same Chairman takes part in the works of the Control and Risk Committee (and the other Statutory Auditors can in any case also participate).
Within the sphere of the Control and Risk System, the Head of the Internal Audit department:
a) Prepares the audit plan submitting it to the Control and Risk Committee so that it can be put before the Board of Directors for adoption;
b) Checks both on an ongoing basis and in relation to specific necessities that the Control and Risk System is functioning well and is suitable for the task through the audit plan which is approved by the Board of Directors;
c) Prepares half-yearly reports on its activities, the procedures used to conduct risk management, compliance with the plans defined for containing the risk and the suitability of the Control and Risk System. He/she then sends a copy to the meeting of the Control and Risk Committee which precedes the Board of Directors Meetings that approve the Annual and Semi-Annual financial statements;
d) Prepares timely reports on events of particular significance, sending a copy of the same to the Chairmen of the Board of Directors, the Control and Risk Committee and the Board of Statutory Auditors as well as to the Director Responsible;
e) As part of the audit plan he/she checks the reliability of the IT systems, including the accounting system.
Hierarchically the Head of the Internal Audit department reports on a general basis to the Board of Directors, to the Chairman of the Board of Directors, and has direct access to any information useful to carry out his/her role.
The description of the activities and functions of the Risk Manager is given below.
The Board of Statutory Auditors monitors the effectiveness of the Control and Risk System. In carrying out its functions the Board of Statutory Auditors can ask the Head of the Internal Audit department to carry out checks on specific operating areas or company transactions, advising the Chairman of the Board of Directors. The Board of Statutory Auditors and the Control and Risk Committee exchange the information they need to carry out their duties on a timely basis.
The Supervisory Body set up as per the terms of D.L.gs 231/2001 carries out the duties assigned to it by the Company's Organization Model and collaborates and exchanges information regularly with the Control and Risk Committee, the Board of Statutory Auditors and the Director Responsible.
The other bodies and departments of the Company with competence in the area of internal control and risk management include the Officer Responsible for the preparation of the financial statements and all of the procedures and bodies that make up the structure of the Company.
The risk management system is organized with the following three levels of control:
a) The operating functions within the company note the risks and establish any action to be taken to manage them;
b) The risk management functions carry out a constant analysis and monitoring activity;
c) The Internal Audit department controls the functioning of the System and gives its own independent assessments.
At least once a year when the budget is prepared, COFIDE carries out an overall assessment of its risks, quantifying them and evaluating their possible impact both of the achievement of results and in general on the management of its portfolio of equity investments.
The analysis is carried out with the methodological support of the document "Risk analysis and evaluation" given as an attachment (Annex a), which forms an integral part of this document. The outcome of this activity is a document that describes in full the level of risk for each business area and defines the action planned to mitigate the risks. The general content of the information produced is given in document (for example Annex b) which must be discussed by the Risk Manager with the company management and with the Control and Risk Committee. The Control and Risk Committee can request clarification and/or additional information to be given in the document so that it can report back exhaustively to the Board of Directors. The Board of Directors must be put in the condition to be able to then easily assess whether the level of risk compatible with the strategic objectives of the Company is acceptable as it is set out in the document prepared by management and discussed with the Control and Risk Committee. The Board of Directors must give its opinion on the mitigation action proposed and on the amount of any residual risk.
The examination, discussion and definition by the Board of Directors of the nature and level of risk compatible with the Company's objectives is carried out through a critical analysis of the Control and Risk Committee's evaluation of the probability/impact of the risk and takes into consideration parameters relating to the operating result, shareholders' equity and the net financial position of the Company.
The above activity must be subjected to a complete review and ongoing monitoring during the year by the Risk Manager in close conjunction with those responsible for the process and with the Head of the Internal Audit department.
In practical terms the activity of the Risk Manager in conjunction with those responsible for the process consists of taking the following actions:
a) Mapping out the company processes and updating them whenever necessary;
b) Recording both internal and external risks for the individual processes on an annual basis;
c) Measuring the risks in terms of probability / impact and assessing their effect on the business plans and on the budget;
d) Analysing factors that can mitigate the risk;
e) Presenting the results of the activity to the Control and Risk Committee for examination and a preliminary discussion with a view to presenting the same to the Board of Directors.
The above activity is carried out following the methodological guidelines contained in the document "Analysis and assessment of risks", which are inspired by the framework "ERM - enterprise risk management" prepared by the "Committee of Sponsoring Organizations of the Treadway Commission" (COSO report).
The Risk Manager carries out a constant monitoring activity of the possible consequences of strategic, operating, compliance and reporting risks. He/she defines a series of information flows from the operating functions in order to continually monitor the level of risk. He/she reports back every three months to the Control and Risk Committee and coordinates the work of the risk managers of the subsidiaries, where they exist, in the preparation of a document for assessing and monitoring risk. For the 100% controlled subsidiaries, the analysis and assessment of their risk are managed directly by the Risk Manager of COFIDE.
By October 31 the Risk Manager meets with the Control and Risk Committee to illustrate the annual risk analysis and assessment of the Company. The Control and Risk Committee analyses the document and goes into more depth where necessary during the following months of November and December to then put the final document before the Board of Directors when they meet to approve the budget in January. .
At the Board of Directors Meeting held on October 29 2012, the Company also adopted Guidelines for implementing the internal control and risk management System of the companies of the Group.
Below are the terms of the Company Bylaws on the subject of Statutory Auditors
other companies or organizations whose shares are listed on a regulated market included in the list as per articles 63 and 67 of D.Lgs. no. 58/1998 cannot be included in the list of candidates and neither can individuals who do not possess the necessary requisites of integrity, professionalism and independence laid down in the legislation on the subject or those who do not respect the maximum limit for the number of positions they can hold in accordance with the law or with regulations.
only one list is presented, the candidate for the position of Statutory Auditor who is number one on that list has the right to the position of Chairman of the Board of Statutory Auditors.
The Statutory Auditors are selected from persons who, in addition to having the requisites required by law, can be qualified as independent even according to the criteria set out in the CODE OF CONDUCT OF BORSA ITALIANA S.P.A. for Directors, as recommended by the same CODE OF CONDUCT OF BORSA ITALIANA S.P.A.
The Board of Statutory Auditors checks that the said criteria have been complied with after their appointment and then once a year.
The Statutory Auditors accept the position when they feel that they can devote the necessary amount of time to carrying out their duties in a diligent fashion.
The compensation of the Statutory Auditors is commensurate with the commitment required of them, with the importance of the role they hold and with the characteristics of the Company in terms of size and business sector.
The supervisory activity of the Board of Statutory Auditors on the effectiveness of the Control and Risk Committee is described in Art. 7 above.
The Company endeavours to establish and maintain an effective dialogue with its Shareholders and with the market, using various forms of communication such as: presenting the results of the Company and the Group during Shareholders' Meetings using slide projections, meeting with financial analysts and institutional investors in Italy and abroad, informing the public by making the corporate governance documents required by law, press releases and presentations available on the website of the Company.
The Company also adheres to the principles of the Guide for Disclosing Information to the Market.
The Company appoints an officer responsible for the Investor Relations function to manage the flow of information to Shareholders, financial analysts and institutional investors, in compliance with the rules established for the disclosure of the Company's information and documents.
In its relations with its listed subsidiaries, the Company adopts the practice of announcing to the public any proposals that it intends to put before the Shareholders' Meeting well in advance on topics where there is no specific proposal made by the Directors
Below are the terms of the Company Bylaws on the subject of the terms and procedures for calling Shareholders' Meetings
The Board of Directors provides the Shareholders with a file containing the proposals on the Agenda for the Annual General Meeting. This is made available on the Company's website within the time limits laid down by current legislation.
The Rules for Shareholders' Meetings, which can be found on the Company's website, ensure that Shareholders' Meetings take place in an ordered and functional manner.
Rodolfo De Benedetti (Turin, 1961) is Chairman of CIR and COFIDE since his appointment in April 2013. The COFIDE-CIR Group, of which he is a controlling shareholder together with his brothers Edoardo and Marco, operates in various business sectors, particularly Auto components (Sogefi), Media (Gruppo Editoriale L'Espresso) and Healthcare (KOS). Within the group he is also a member of the Board of Directors of Sogefi and Gruppo Editoriale L'Espresso.
Previously he was Chief Executive Officer of CIR from 1993 and of COFIDE from 1995. He joined COFIDE in 1988 as Director of International Affairs and was subsequently appointed as General Manager. In 1990 he also became General Manager of CIR.
Before his appointments in CIR and COFIDE, Rodolfo De Benedetti worked from September 1985 to December 1986 for Lombard Odier, one of the main private banking groups in Switzerland based in Geneva, as Assistant to the Chief Executive Officer. From January 1987 to January 1988 he worked for Shearson Lehman Brothers (New York) as an Associate in the Merchant Banking Group.
Currently he is a Shareholder and Director of Decalia Asset Management S.A., an international investment management company established in 2014.
He is also a member of the European Round Table of Industrialists (ERT), a forum made up of more than 50 of the most important European companies in various sectors, chairman of the European Advisory Board of Harvard Business School and a board member of Aon Italia (risk management and insurance brokerage).
Rodolfo De Benedetti completed his education in Geneva where he graduated in 1982 in Political Economics and in 1985 in Law. Married to Emmanuelle de Villepin, he is father to Neige, Alix and Mita.
Edoardo De Benedetti (Turin, 1964) is a doctor specializing in internal medicine and cardiology who works in the department of cardiac catheterization of the l'Hôpital de La Tour di Meyrin (Switzerland).
Since 2003, as well as being joint head of interventional cardiology, he also exercises the profession of cardiologist in a private practice. After his University studies in medicine at the Faculty of Medicine of the University of Geneva, where he graduated in 1990, in 1995 he obtained a Swiss specialization in internal medicine followed by a specialization in cardiology in 1998 from the University Hospital of Geneva. From 1999 to 2003 he was consultant for the CHUV in Lausanne where he continued to specialize in interventional cardiology. In 2000, thanks to a research grant, he devoted himself to research for the National Institute of Health and Medical Research (INSERM) in Paris, while also practising interventional cardiology at the Bichat-Claude Bernard Hospital.
He has been involved in various humanitarian missions at the hospitals of Sarajevo (Bosnia), Tbilisi (Georgia) and Djakove (Kosovo) and is the author of numerous articles published in various specialist journals in the field of cardiovascular medicine.
Edoardo De Benedetti is on the Boards of Directors of Cir and Cofide.
He is also on the scientific committee of the Fondazione Together to Go – TOG for the rehabilitation of children who have suffered neurological problems.
He is married and has two daughters.
Marco De Benedetti is Managing Director of Carlyle since November 2005.
He was appointed Chairman of Fratelli De Benedetti S.p.A. in March 2013. He is a Director of CIR since June 2014 and of Cofide since 1994.
He is Chairman of Marelli Motori S.p.A., Comdata S.p.A. and Twin-Set Simona Barbieri S.r.l. and is a member of the Board of Directors of Moncler S.p.A., NBTY, Inc. and Logoplaste S.A..
He was Chief Executive Officer of TIM from July 1999 to July 2005 and Chief Executive Officer of Telecom Italia (July 2005 - October 2005).
Marco De Benedetti graduated in history and economics from the Wesleyan University (Middletown, CT-US) in 1984. In 1987 he was awarded a Master in Business Administration by the Wharton Business School (Philadelphia, PA-US).
Silvia Candiani (Milan, 1970) is Director of Marketing & Operations for Microsoft. From April 2010 to June 2011 she was Head of Microsoft's Consumer & Online Division.
From 1999 to 2010 she worked for Vodafone Italia holding various position in the commercial area and in 2002 became Director of Marketing.
She was Director of CRM in SanPaolo IMI (1998-1999).
From 1993 to 1998 for McKinsey & Company she managed strategy and organization projects for Italian and multinational businesses in the media and finance sector.Silvia Candiani graduated in Business Economics from the Bocconi University in Milan and was awarded an MBA by the international INSEAD school.
Born in Busto Arsizio (VA) on April 3 1959.
Currently a contract Professor at the Catholic University in Milan, Faculty of Economics and Commerce. He was previously a contract Professor at the State University of Milan, Faculty of Law.
He has contributed to national and international publications and has held seminars both in Italy and internationally.
Is a founder partner of Studio Pirola Pennuto Zei and Associates of which he is a member of the Board of Directors and the Executive Committee.
He is the consultant of important Italian and foreign groups with particular reference to financial, banking and insurance activities. He has carried out important assignments for the Ministry of the Treasury as Ministerial Commissioner for brokers in their periods of authorized suspension of activities. He has been an independent director in listed companies and companies with a widely distributed shareholder base.
Member of the Board of Directors of the companies Cofide S.p.A., Gucci Logistica S.p.A., Guccio Gucci S.p.A., SIT La Precisa S.p.A., Technogym S.p.A., UBS Fiduciaria S.p.A. and others. Chairman of the Board of Statutory Auditors of FONSPA BANK S.p.A., Italian subsidiaries of the Bosch Group, FASTER S.p.A., Luvata Italy S.p.A., Metro Italia Cash&Carry S.p.A., Sasol Italy S.p.A. and others.
Graduated in Economics and Commerce from the Catholic University in Milan in academic year 1982/1983. Business Consultant (Dottore Commercialista) since 1985 on the Professional Register of the jurisdiction of the Milan Court.
Paola Dubini is an Associate Professor of the Bocconi University of Milan and also works for the University of Milan (Università degli Studi).
Since November 2009 she is Director of the ASK (Art, Science and Knowledge) research centre of the Bocconi University and of the degree course in Economics for the Arts, Culture and Communication (Cleacc).
She has had experience in research and lecturing in the United States and in France. She has carried out research on various strategic topics, especially in relation to how culture and content processes are being transformed, and on subjects relating to entrepreneurship, and managing and enhancing the value of artistic and cultural heritage.
She is the author of numerous publications at national and international level.
Born in Turin on June 14 1942.
He graduated in Economics and Commerce from the University of Turin in 1966.
He joined Ing. C. Olivetti & C. S.p.A. in 1966 and held various positions.
He left Olivetti on April 1 1987 with the title of Director of Control for the Group in order to join CIR S.p.A. as Central Director for Administration and Control.
From April 1991 to October 1994 he held the position of Deputy General Manager of Cerus (the French holding company of the Group). In November 1994 he was appointed Deputy General Manager and in September 1997 General Manager of CIR S.p.A. becoming a Member of the Board of Directors of the Company in April 1999. He left the General Management of CIR on September 30 2001, keeping the position of Director with special assignments until April 29 2011. Current positions: Director of COFIDE S.p.A.; Chairman of CIR INTERNATIONAL S.A., Residenze Anni Azzurri S.r.l., MONTAIGNE 51 SAS and Residence Branly SAS.S.r.l.
Born in Milan in 1947. Graduated in law with first class honours from the Milan State University. Practised law from 1974 to 1978 Notary Public in the district of Milan since 1978. Specializes in company law, family law and inheritance. Speaks at various law-related conferences, writes for the press and is the author of writings on juridical subjects. Chairman or director of non-profit and cultural associations. Honorary Judge of the Milan Court of Law from 2000 to 2005. Member of the Board of Directors of Eurofinleading Fiduciaria S.p.A. - Milan (from 2002 to 2007). Member of the Board of Directors of Cofide S.pA. - Milan. Chairman of Cofide S.p.A. – Milan (from 2009 to 2013). Member of the Board of Directors of Società editrice del Corriere del Ticino S.A. - Lugano.
Member of the Board of Directors of Ceresio SIM S.p.A. – Milano.
Maria Serena Porcari (Milan, 1971) is Executive Director of Fondazione Dynamo, Executive Vice Chairman of Associazione Dynamo Camp Onlus and Chairman of Dynamo Academy Srl Impresa Sociale. She is on the Board of Directors of Associazione Serious Fun Children's Network and Community Advisor of the Newman's Own Foundation in the US. She began her professional career in 1994 in market research and financial analysis for venture capital projects. She worked for IBM Italia from 1995 to 2004. Maria Serena Porcari graduated cum laude in Business Economics from the Bocconi University in Milan and is a tax specialist (dottore commercialista). She obtained an MBA from the Henley Management School, UK, and a CEMS Master's in International Management.
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