Governance Information • Apr 8, 2015
Governance Information
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Corporate Governance and Shareholding Structure Report 2014
Pursuant to Article 123-bis of Law No. 58/1998, approved by the Board of Directors on March 10, 2015
(Traditional Management and Control Model)
Pursuing the satisfaction of our clients in the energy industry, we tackle each challenge with safe, reliable and innovative solutions. We entrust our competent and multi-local teams to provide sustainable development for our Company
and for the communities where we operate.
Commitment to health and safety, openness, flexibility, integration, innovation, quality, competitiveness, teamwork, humility, internationalisation, responsibility and integrity.
Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Italy, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey, United Kingdom
Bolivia, Brazil, Canada, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Peru, Suriname, Trinidad and Tobago, United States, Venezuela
CIS Azerbaijan, Kazakhstan, Russia, Turkmenistan, Ukraine
AFRICA Algeria, Angola, Congo, Egypt, Gabon, Ghana, Libya, Mauritania, Morocco, Mozambique, Nigeria, South Africa, Uganda
MIDDLE EAST Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
FAR EAST AND OCEANIA Australia, China, India, Indonesia, Japan, Malaysia, Pakistan, Papua New Guinea, Singapore, South Korea, Thailand, Vietnam
The Corporate Governance Report is published on Saipem's website www.saipem.com, in the 'Corporate Governance' section
4 Corporate Governance and Shareholding Structure Report
| 4 | Issuer profile |
|---|---|
| 4 | Principles |
| 5 | Business ethics |
| 5 | Stakeholders |
| 5 | Labour protection and equal opportunities |
| 5 | Development of professional skills |
| 5 | Diversity |
| 5 | Cooperation |
| 5 | Regulatory System |
| 7 | Health and safety |
| 8 | Environmental protection |
| 8 8 |
HSE Management System The Code of Ethics |
| 9 | Sustainability |
| 9 | Saipem's organisational structure |
| 10 | Shareholding structure |
| (pursuant to Article 123-bis, paragraph 1, of Law No. 58/1998) as at December 31, 2014 | |
| 10 | Share capital distribution |
| 10 | Restrictions on the transfer of shares |
| 10 | Relevant shareholdings |
| 11 | Special Shareholders rights |
| 11 | Shareholding of employees: exercise of voting rights |
| 11 | Voting rights restrictions |
| 11 | Shareholders agreements as per Article 122 of Law No. 58/1998 |
| 11 | Change of control clauses (pursuant to Article 123-bis, paragraph 1, letter h), |
| of Law No. 58/1998) and statutory provisions for takeover bids (Article 104, paragraph 1-ter | |
| and Article 104-bis, paragraph 1) | |
| 11 | Indemnification for Directors in case of dismissal (without just cause), |
| resignation or termination following a public purchase offer | |
| 11 | Directors' appointment or replacement, and modifications to the Articles of Association |
| 12 12 |
Share capital increases and buy-back of treasury shares Direction and coordination (pursuant to Article 2497 of the Italian Civil Code) |
| 12 | Corporate Governance Code |
| 13 | The Board of Directors |
| 13 | Composition, appointment and replacement of Board of Directors |
| 14 | Succession plans |
| 14 | Cumulation of offices |
| 15 | Board of Directors' Induction |
| 15 | Responsibilities, functions and powers of the Board of Directors |
| 18 | Board of Directors' meetings |
| 18 | Board review/Professional recommendations |
| 20 | Executive Directors |
| 20 | Independent Directors |
| 21 | Processing of inside information |
| 22 | Board Committees |
| 22 | Compensation and Nomination Committee |
| 24 24 |
Directors' remuneration Audit and Risk Committee |
| 25 | Risk management system and internal control over financial reporting |
| 26 | Main features of the risk assessment and internal control systems |
| for the purposes of financial reporting | |
| 27 | Bodies involved in the Internal Control and Risk Management System |
| 28 | The Board of Directors |
| 28 | Director responsible for the Internal Control System |
| 28 | The Board of Statutory Auditors |
| 29 | Audit and Risk Committee |
| 29 | Senior Vice President responsible for the Internal Audit department |
| 29 | Integrated Risk Management |
| 31 | Organisational Model, pursuant to Law Decree No. 231/2001 / Compliance Committee |
| 32 | Anti-Corruption procedures |
| 33 | External auditors |
| 33 | Officer responsible for preparing the Company's financial reports |
| 33 | Co-ordination of bodies involved in the Internal Control and Risk Management System |
| 34 35 |
Directors' and Statutory Auditors' interests and transactions with related parties The Board of Statutory Auditors |
| 35 | Composition, appointment and functions of the Board of Statutory Auditors |
| 38 | Investor relations |
| 38 | The Shareholders' Meeting |
| 39 | Saipem Corporate Governance additional practices |
| 40 | Events subsequent to year-end |
| 41 | Table 1. Shareholding structure |
| 42 | Table 2A. Structure of the Board of Directors and its Committees (up to May 6, 2014) |
| 43 | Table 2B. Structure of the Board of Directors and its Committees (from May 6, 2014) |
| 44 | Table 3A. Structure of the Board of Statutory Auditors (up to May 6, 2014) |
| 44 | Table 3B. Structure of the Board of Statutory Auditors (from May 6, 2014) |
Corporate Governance Code/Code: the Corporate Governance Code for listed companies approved in July 2014 by the Corporate Governance Committee and endorsed by Borsa Italiana SpA, ABI, Ania, Assogestioni, Assonime and Confindustria.
Board of Directors: the Board of Directors of the Issuer.
CoSO Report: internal control system model issued by the Committee of Sponsoring Organizations of the Treadway Commission - 1992.
Issuer: issuer of stocks and shares referred to in this Report.
Year: financial year 2014, subject of this Report.
TUF: Legislative Decree No. 58 (TUF - Testo Unico della Finanza), issued on February 24, 1998.
This Report is designed to provide a general and complete overview of Saipem SpA's ('Saipem') Corporate Governance system. In order to comply with applicable laws and stock market listing standards, in keeping with the recommendations of Borsa Italiana SpA and of the relevant business associations, the Report also furnishes information regarding Saipem's shareholding, its compliance with the Corporate Governance codes1 established by institutional bodies and the relevant commitments to observe them, as well as the choices that the Company has made in implementing its Governance. This Report is available at Saipem's headquarters, published on Saipem's website, and sent to Borsa Italiana SpA and the authorised storage mechanism 'Nis Storage' (), in accordance with current legal rules and deadlines.
The information contained in this Report relates to the financial year 2014 and has been updated, with respect to specific matters, as of March 10, 2015, the date of the Board of Directors' Meeting that approved it, together with the 2014 Annual Financial Report.
Saipem is a world leader in the engineering, construction and drilling sectors, providing services to the oil & gas industry, with a strong bias towards operations in remote areas and ultra-deep waters.
The Company excels in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and execution of large-scale offshore and onshore projects. Saipem is also able to offer its clients cutting-edge technology used in gas monetisation and heavy oil exploitation.
Over the years Saipem has built up a solid EPC/EPCI industrial model (Engineering Procurement and Construction / Engineering Procurement Construction and Installation), which enables it to be a world leader in the provision of EPCI and EPC services to the oil industry both Onshore and Offshore. With EPC/EPCI contracts Saipem is able to offer its clients highly effective solutions, where the Company takes on the full responsibility for all phases of project operations, ensuring significant investments in local content and local development.
Furthermore, Saipem operates both onshore and offshore in some of the most hostile areas of the world thanks to its technologically advanced drilling vessels.
Saipem is a leading international contractor, operating on behalf of the major oil companies in Europe, the former Soviet Union, North and West Africa, the Middle and Far East and the Americas.
The Company operates in more than 62 Countries, employing local personnel and a large number of resources from developing Countries, totalling approximately 50,000 employees of 129 different nationalities. Furthermore, Saipem has important service hubs in India, Croatia, Romania and Indonesia.
Saipem creates sustainable value in the Countries of operation, having made a commitment to all its stakeholders. Saipem is guided by the principles of transparency, honesty, integrity, commercial fair play and adopts the strictest international standards and guidelines in its business activities. Saipem's sustainability model guides all corporate processes, focused as it is on the achievement of excellence and long-term objectives in order to prevent, reduce and manage all risks.
Saipem's activities are carried out in compliance with the highest health, safety and Quality standards. Saipem's 'Health & Safety Environment Management System' and the 'Quality Management System' have obtained Lloyd's Register International Standard certification ISO 9001:2000.
Saipem undertakes to maintain and strengthen a Governance system in line with international best practice and standards. The complexity of the situations in which Saipem operates, the challenges of sustainable development and the need to take into consideration the interests of all those having a legitimate stake in the corporate business ('Stakeholders'), increase the importance of clearly defining the values and responsibilities that Saipem recognises.
Compliance with the law, regulations, statutory provisions, self-regulatory codes, ethical integrity and fairness, is a constant commitment and duty for all Saipem personnel, and characterises the conduct of Saipem's entire organisation.
All personnel working for Saipem, without distinction and/or exceptions, are committed to observing and enforcing the aforementioned principles, within their own function and responsibilities, in addition to the values and principles in matters of transparency, energy efficiency and sustainable development, as stated by Institutions and International Conventions.
The belief of acting in Saipem's interests cannot in any way justify the adoption of practices contravening these principles.
(1) Reference is made to the Corporate Governance Code 2006 of Borsa Italiana SpA, as amended in July 2014, which is posted on http://www.borsaitaliana.it/comitato-corporate-governance/codice/2014clean.pdf.
Saipem's business and corporate activities must be carried out in a transparent, honest and fair way, in good faith, and in full compliance with competition protection rules.
Specifically, Saipem applies the OECD (Organisation for Economic Co-operation and Development) guidelines for multinational companies.
Saipem is committed to respecting all stakeholders with whom it interacts in business, as it believes that they are an important asset to the Company.
Saipem respects the universally recognised core labour standards contained in the Fundamental Conventions of ILO (International Labour Organisation); it guarantees the freedom to form a union and the right of collective bargaining; it repudiates any form of forced or juvenile labour and/or discrimination. In addition, Saipem is an equal opportunity employer and guarantees its employees equal treatment, based on merit.
Saipem values and promotes the development of skills and competencies of each employee in addition to team work, so that the energy and creativity of an individual can realise their full potential.
Saipem's business conduct is inspired by the respect it affords to cultures, religions, traditions, ethnic diversity and the communities in which it operates, and strives to preserve their biological, environmental, social, cultural and economic identities.
Saipem is committed to promoting the quality of life and the social and economic development of the communities in which the Group operates.
The Regulatory System is part of Saipem's Corporate Governance and is one of the tools that Saipem SpA uses to exercise direction, coordination and control over its subsidiaries, both in Italy and abroad.
Saipem's Regulatory System is a dynamic system that is continuously improved as the internal and external context evolves. The System is organised, developed and distributed in such a way as to facilitate usability and understanding by its users.
The Regulatory System is process-based, regardless of the positioning of the respective duties within the corporate and organisational structure of Saipem SpA and its subsidiaries. All of Saipem's activities have been grouped into a map of processes involving more than one area, identifying a Process Owner for each process. The Process Owner is responsible for the adequacy of the design of the Management System Guideline (MSG) relating to the process/rules of Compliance or Governance within his/her own sphere of competence, and for promoting full compliance with them and their correct application at Saipem SpA and its subsidiaries. Process Owners of compliance MSGs or Governance MSGs are also responsible for monitoring the evolution of reference laws, case law and best practices in order to ensure the proper adjustment of the entire Regulatory System.
Saipem uses the Regulatory System to promote the integration of principles of compliance into company processes, with a view to disseminating the rules and standards of control established by the various compliance models, and introducing them into the operational context at the various entities. The regulatory instruments describe the minimum control principles that the persons involved in the regulated process are required to adhere to in order to operate in accordance with the applicable regulations, legal requirements and other Saipem management tools, including the organisational structure, the system of powers and internal proxies and the strategic plan.
Furthermore, Saipem's regulatory system is based on and is consistent with the general framework, which comprises: legal provisions, the Articles of Association, the Corporate Governance Code, the CoSo Report, the Organisation, Management and Control Model 231, which includes the Code of Ethics and the internal control system over financial reporting.
The Regulatory System is divided into four levels, each comprising a type of regulatory instrument:
The Policies, MSGs and corporate regulatory documents are issued by Saipem SpA, are some of the instruments used by Saipem SpA in its role of steering, coordination and control over its subsidiaries. The Company regulatory documents are issued by Saipem SpA and its various entities; alongside the first three levels, they ensure the optimal operational management of the individual entity. They are regulatory instruments specific to the individual companies that define, where necessary, the principles, operational rules and controls set forth in Policies and MSGs and by the other reference corporate regulatory documents.
They define the fundamental principles and mandatory rules of conduct that must inspire all activities carried out by Saipem in order to guarantee the achievement of business objectives, considering all relative risks and opportunities. They apply to Saipem SpA and its subsidiaries.
These are common to all Saipem entities and comprise of:
They apply to Saipem SpA and its subsidiaries.
These are the documents that discipline processes and specific issues/areas of interest to the Company at Saipem level, supplementing the content of the MSGs or defining them in greater detail. They guide the work carried out by Saipem with the aim of guaranteeing standards of conduct and pursuing compliance objectives, by describing the tasks and responsibilities of the Company structures/positions involved in the relevant processes, the management and control methods and the communication flows. These include:
Standard Procedures apply to Saipem SpA and its subsidiaries, following implementation by the Board of Directors of each subsidiary.
These define the principles and operating procedures for each specific Company area in order to ensure compliance with local and international legislation, they standardise in detail the sub-processes or the activities linked with the macro-processes already defined in a Corporate regulatory document and/or describe a process in detail and in line with the specific Company characteristics. They apply to the individual companies responsible for their issue.
To rationalise and improve the efficiency of the body of documents that define general principles and conduct rules that must inspire all actions carried out by Saipem and its subsidiaries, and to ensure the achievement of corporate objectives, Saipem between 2010 and 2012 issued ten specific Policies entitled:
The development of the Regulatory System progressed in 2014 with the issue of additional Process and Compliance/Governance MSGs, and the updating of both corporate and company regulatory documents. Furthermore, in 2014, periodic monitoring activities were carried out to ensure the implementation of regulatory documents by the subsidiaries and certification was requested from the relevant Process Owners confirming the adequacy of the MSG framework.
All Policies, MSGs and other current documents are distributed to all subsidiaries and posted on Saipem's intranet. Some of these are also published at www.saipem.com.
Saipem ensures the highest health and safety standards for its employees and those of its subcontractors in all geographical areas of operations, and faces all challenges by applying the safety vision: 'To be winners through passion for Health and Safety'. Saipem's vision stresses how being safe and healthy equates to being more efficient in terms of business performance. In 2007, Saipem began implementing the programme 'Leadership in Health and Safety - LiHS', aimed at creating a strong safety culture throughout the Company by turning its leaders into safety leaders.
The LiHS (Leadership in Health and Safety) continued its development through its various phases, reaching personnel from all Business Units, both in Italy and abroad, paying particular attention to personnel involved in newly-acquired projects. Furthermore, 'Five Star' courses have increased significantly, exceeding 1000 trainees.
The 'Leading Behaviours' campaign launched in 2011 has continued over the years and has been implemented at dozens of Saipem sites worldwide. Leading behaviours are five simple non-negotiable rules, which, when adopted by personnel, shall enable Saipem to achieve excellent Health and Safety standards.
Saipem is also committed to prevention and health promotion: many were among the initiatives and campaigns launched by Saipem in 2014. For example, the awareness campaign to disseminate the 'Life Saving Rules' issued by OGP, the International Association of Oil & Gas Producers. In the second half of 2014 all support material was prepared (videos, posters, booklets, trainer's guidelines, etc.) for its launch and roll-out across the group planned in 2015. This campaign is part of a larger project named 'We Want Zero', sponsored by the CEO, aimed at eliminating fatal accidents within Saipem.
Also in 2014, activities of the 'LiHS' (Leadership in Health and Safety) Foundation continued with the promotion of various initiatives aimed both at the Saipem world and outwith the Group. For instance, for the 'World Day for Health & Safety at Work', the LHS Foundation organised the production of the theatrical show 'Giorni Rubati' ('Stolen days') at the Massimo Troisi Theatre in San Donato Milanese. The show was also produced in Arbatax (Sardinia) as part of the open day event dedicated to employee's families; in Mantua with the support of the local Confindustria (Confederation of Italian Industry) branch and Versalis Mantua; and in Vicenza, with the cooperation of AIAS and CVP. On April 28, as part of the 'Sharing Love For Health & Safety' campaign, a new internal competition was launched named 'SAFE Selfie Contest' which received in excess of 100 photographs. To celebrate the successful launch of this initiative, a special edition of the magazine LiHS News was issued along with a celebratory video.
On the occasion of the Saipem Open Day, when several Saipem Italian offices were opened on a Saturday to allow the employees to show their families their place of work, the LiHS team organized two play/educational initiatives for visiting children focused on 'health and safety' issues. More than 100 children took part in this fun and educational experience, becoming familiar with a subject traditionally aimed at adults.
Saipem places particular emphasis on Health and Safety training as it deems it one of the main tools for accident prevention. In 2014, training progressed on employee health and safety, with the launch of specific courses aimed at ensuring compliance with the relevant regulations in those Countries where Saipem operates. In Italy a specifically-tailored HSE training protocol was rolled out, which conforms to the requisites set forth in the State-Region Agreement. This protocol, issued in July 2013 (rev.2), sets the guidelines for the planning, management and implementing of HSE training within Saipem. These training protocols ensure that all legal and regulatory provisions are met and that the highest HSE standards are achieved for all Saipem personnel.
Saipem is aware that all its activities – from planning to design through to local operations – have the potential to affect the environment and local communities. For this reason Saipem strives to continuously improve its environmental performance and minimise the impact of its operations.
To this end Saipem adopts an HSE management system which has been developed in compliance with best international safety standards, it undertakes research and development studies, rolls-out implementation and awareness best practices which are subsequently published in the quarterly publication eNEWS magazine.
With regard to the management of the most critical environmental impacts, Saipem's focus over recent years has been on accidental spill prevention strategies. Developing adequate spill management procedures at all sites and for all projects, together with the training of all personnel involved in operations and periodic drills proved to be the most effective preventative measure.
Further efforts were also made in 2014 to improve energy efficiency: appropriate Energy Assessments were planned and carried out on office buildings in Italy (Fano and Vibo Valentia), at Onshore Drilling sites in Italy (Val d'Agri), at the Fabrication Yard at Arbatax and at the Logistical base in Ravenna, in order to identify technical solutions to increase energy efficiency, whose implementation is planned to take place in 2015 and 2016.
Saipem also made three technical contributions at the workshop 'Waste Day 2014' organised by Eni and dedicated to waste management. This centred on curbing waste production, both in terms of quantity and dangerousness, evaluating and considering, whenever possible, the waste monetization option.
In June 2014, Saipem consolidated the celebration of the World Environment Day (WED). More and more this has become an event devoted to raising the awareness of the entire workforce towards the environment through appropriate actions and initiatives. For this occasion Saipem coined the slogan 'Efficient Consumption means Green Consumption', as a result of energy assessments and the strategy adopted by Saipem of reducing waste and natural resources consumption. Furthermore, on the same day, the 'Print Less Day' initiative was launched aimed at all employees, and contribution was made to the 'Energy Day' organised by Eni, illustrating activities related to energy efficiency, consumption reduction, and the technological solutions Saipem offers its clients.
Saipem's HSE integrated management system complies with both international standards and the strictest legislation. Many Saipem Group companies have attained ISO 14001 and BS OHSAS 18001 Certification. This ensures the structured management of HSE issues through: organisational procedures, operating instructions, health protocols and training, to ensure continuous improvement of the HSE performance.
At Saipem SpA, the process for the renewal of ISO 14001 and BS OHSAS 18001 Certification was completed in November 2014; this involved all processes associated with the Company's business operations.
This important achievement confirms Saipem management's unwavering commitment to HSE themes.
At the Meeting of July 14, 2008, the Board of Directors of Saipem SpA approved a new version of the organisational, management and control Model pursuant to Legislative Decree No. 231 of 2001 (approved for the first time in 2004), entitled 'Model 231 (inclusive of the Code of Ethics)' – hereafter Model 2312, accompanied by the document 'Sensitive activities and specific control standards of Model 231'2.
The Code of Ethics – chapter 1 of Model 231 – represents a compulsory general principle and clearly defines, in compliance with the provisions of law, the values that Saipem recognises and accepts, as well as the responsibilities the Company assumes both internally and externally. It imposes fairness, honesty, integrity and transparency of operations, conduct, working practices and relations both internal and external to the Group.
The Code of Ethics provides for the appointment of a Guarantor of the Code of Ethics, whose responsibilities have been delegated to the Compliance Committee (Chapter 3 of Model 231) and which has been granted 'independent powers of initiative and control' pursuant to Article 6, paragraph 1, letter b) of Law Decree No. 231/2001 on administrative liability of legal entities deriving from offences. The duties of the Guarantor include the promotion of information and training initiatives towards Saipem's employees, who are required to observe the principles contained in the Code of Ethics.
The Compliance Committee's mandate coincides with that of the Board of Directors which appointed it. The composition of the Compliance Committee, modifications and additions, are approved through a resolution of the Board of Directors, having heard the opinion of the Audit and Risk Committee and that of the Board of Statutory Auditors, at the proposal of the CEO in agreement with the Chairman.
The Board of Directors, at their Meeting of July 29, 2014, resolved the following appointments to the Committee: Vincenzo Salafia - Chairman (external member), Mario Casellato (external member), Mario Colombo (internal member - Senior Vice President General Counsel, Company Affairs and Governance), Dario Gallinari (internal member - Executive Vice President Human Resources and Organisation) and Gabriel Almandoz (internal member - Senior Vice President Internal Audit). The Compliance Committee's independence is safeguarded by the position afforded to the aforementioned functions within the Company's organisation and their reporting lines, pursuant to Article 6, paragraph 1, letter b), of Law No. 231/2001.
(2) Model 231, comprising the Code of Ethics, is published on Saipem's website www.saipem.com in the 'Corporate Governance' section.
Reporting to the Compliance Committee is the Technical Secretariat of the Compliance Committee, responsible for assisting with the identification and running of activities within its remit and ensuring the upholding of professional requirements and continuity of action.
Each subsidiary, directly or indirectly, both in Italy and overseas, issues its own Organisational, Management and Control Model, which assigns the functions of Guarantor to its own Compliance Committee.
One of the duties contained in Model 231 of Saipem SpA is the promotion and dissemination of the principles that make up Saipem's Code of Ethics. This is carried out by a specific multifunctional team reporting to the Guarantor of the Code of Ethics (Compliance Committee), the 'Code Promotion Team', set up on October 6, 2008, and last re-appointed on December 1, 2014. The Team is made up of 11 members sourced from several internal departments (Investor Relations, Italian Industrial Relations, Human Resources, Secretary's Office, Learning Recruitment and Skill Management, Organisation, Internal Communication, HR Analytics and Services, Sustainability, Sector Procurement Coordination, E&C Tendering and Drilling Operations Coordination).
As of today, the Code of Ethics has been translated into 16 languages for publication on the Company's intranet and website. Another example is the training of new recruits through the 'Welcome to Saipem' course and that of employees through attendance of specific courses held at Saipem Group's overseas companies.
With these initiatives, the Board of Directors further strengthened the internal control system, with the firm conviction that the Company's business activities, whose aim is the creation of value for its Shareholders, must be founded on the principle of fair conduct towards all stakeholders (comprising, besides the Shareholders, employees, suppliers, clients, commercial and financial partners, in addition to the communities the Group comes into contact with in the Countries where it is present) and that this, through the promotion of important social initiatives in a continuous effort to foster amongst stakeholders the awareness that only a business approach that seizes the opportunities and manages the risks resulting from economic, environmental and social development can generate long-term value for all parties involved.
In 2008, Saipem adopted a Sustainability Model designed to support and integrate into the business so as to ensure the creation of stakeholder value. In this Model, cooperation with local communities, based on the contribution to the territorial development through policies and strategies focused on local content, safeguarding health, safety and the environment, social responsibility and the growth of suppliers, respecting the various cultures and Human Rights, as well as transparency in running the business are all pivotal elements.
The Sustainability Model is based primarily on the formal codification of these topics into corporate values and principles: Saipem's Code of Ethics includes the general principles underpinning corporate life vis-à-vis its internal and external stakeholders. The sustainability policy, in its latest version of 2012, defines the vision, objectives, processes and tools that guide its path towards sustainable business. Strategic direction and approval of sustainability programmes are the responsibility of the Sustainability Committee, a body chaired by the CEO and comprising the Directors of Corporate Functions and Business Units.
The Sustainability Committee convened twice in 2014 to discuss the results achieved in 2013, approve the Sustainability Report 2013 and the Sustainability Plan 2015. The Plan represents the Company's commitment towards its stakeholders in the various contexts of operations, the requests of major stakeholders, describes how this commitment shall materialise in the coming year and forms the basis of the sustainability MBO targets for Senior Managers. The implementation of the annual Plan is closely monitored by the Corporate Sustainability function and is supported by a network of resources located in the most strategic areas.
In addition to the awards received recently from various international institutions and bodies, Saipem is currently listed in the Sustainability FTSE4Good Index.
Saipem's organisational structure is based on the traditional administration and control model, whereby the Board of Directors is the central body, solely responsible for the Company's management.
Supervisory and control duties are the responsibility of the Board of Statutory Auditors, whereas the external auditors are responsible for the legal auditing of accounts.
The Shareholders' Meeting manifests the will of the Shareholders, through resolutions adopted in compliance with the law and the Company's Articles of Association.
The Shareholders' Meeting appoints the Board of Directors for a maximum term of three years.
The Shareholders' Meeting appointed the Chairman, while the Board of Directors appointed the CEO (Chief Executive Officer), to whom the following positions report:
The Chairman has the power to represent the Company, pursuant to Article 21 of the Company's Articles of Association, together with those Directors vested with executive powers (pursuant to Article 26 of Articles of Association).
The Board of Directors, at their Meeting of February 13, 2012, resolved to set up:
The Board of Directors, having received the opinion of the Board of Statutory Auditors and at the proposal of the Compensation and Nomination Committee, appointed the Company's Chief Financial and Compliance Officer as the Officer responsible for the preparation of the Company's financial reporting, pursuant to Article 21 of the Articles of Association.
(pursuant to Article 123-bis, paragraph 1, of Law No. 58/1998) as at December 31, 2014
At December 31, 2014, the share capital of Saipem SpA amounted to €441,410,900, fully paid-up and comprising No. 441,301,574 ordinary shares, equal to 99.98% of the share capital, with a nominal value of €1 each, and No. 109,326 savings shares, equal to 0.02% of the share capital, with a nominal value of €1 each, both of which are listed on the Computerised Share Trading Market (Mercato Telematico Azionario) managed by Borsa Italiana SpA (see Table 1). Shares cannot be split and each share carries the entitlement of one vote. Saipem's Shareholders enjoy, and are limited by, all relevant rights afforded by law. Savings shares are convertible at par with ordinary shares, without charges or time restrictions; they enjoy a higher dividend than ordinary shares, equal to 3% of the nominal share value. On April 30, 2013, the Savings Shareholders' Meeting appointed Mr. Roberto Ramorini as their collective representative for the following three years. No other financial instruments have been issued by the Company that allocate the right to subscribe newly-issued shares. No share-based incentive plans have been issued that may give way to (free or otherwise) share capital increases.
No restrictions exist on the transfer of shares.
Based on information available and notifications received pursuant to Article 120 of Law No. 58/1998, Shareholders owning a stake in Saipem SpA in excess of 2% at December 31, 2014, are as follows (see also Table 1):
| Shareholders | Shares held | % of capital |
|---|---|---|
| Eni SpA | 189,423,307 | 42.913 |
| Dodge & Cox | 22,262,143 | 5.045 |
| People's Bank of China | 8,945,981 | 2.027 |
| Shareholders | Number of Shareholders | Shares held | % of capital |
|---|---|---|---|
| Italy | 50,985 | 247,712,308(**) | 56.11 |
| Other EU Member States | 897 | 67,229,108 | 15.23 |
| Americas | 628 | 54,167,189 | 12.27 |
| UK and Ireland | 272 | 33,178,317 | 7.52 |
| Other European States | 122 | 12,562,295 | 2.85 |
| Rest of the world | 257 | 26,561,683 | 6.02 |
| Total | 53,161 | 441,410,900 | 100.00 |
(*) No dividend was paid in 2014.
(**) Incudes no. 1,977,532 treasury shares, which do not have dividend entitlement.
| Shareholders | Number of Shareholders | Shares held | % of capital |
|---|---|---|---|
| > 10% | 1 | 189,423,307 | 42.91 |
| > 2% | 2 | 24,038,770 | 5.45 |
| 1% - 2% | 2 | 11,800,896 | 2.67 |
| 0.5% - 1% | 13 | 38,880,849 | 8.81 |
| 0.3% - 0.5% | 14 | 25,386,600 | 5.75 |
| 0.1% - 0.3% | 50 | 37,724,818 | 8.55 |
| ≤ 0.1% | 53,078 | 112,178,128 | 25.41 |
| Treasury shares | 1 | 1,977,532 | 0.45 |
| Total | 53,161 | 441,410,900 | 100.00 |
All Shareholders enjoy the same rights.
Employees holding Saipem's shares enjoy the same voting rights as ordinary Shareholders.
No restrictions exist on voting rights.
No known agreements exist amongst Shareholders, as per Article 122 of Law No. 58/1998.
Saipem and its subsidiaries are not party to any significant agreements3 that would become effective, be modified or be terminated in the event of a change in the identity of the Shareholders who currently control Saipem.
However we point out the following:
Should there be a change of control, Saipem may be requested to repay the loaned capital and related interests in advance of the contractual terms and conditions.
Replacing the aforementioned financing on the market and taking into account the adjustment in the risk profile of the Company, would result in an increased annual financial outlay assumed to be approximately €33.5 million;
Should there be a change of control, Saipem may be requested to release all Eni lines of credit currently utilised against bank guarantees. Replacing existing lines of credit on the market, taking into account the adjustment in the risk profile of the Company, would result in an increased annual financial outlay assumed to be approximately €37.7 million.
In terms of takeover bids, Saipem's Articles of Association complies with the provisions of Passivity Rule set forth in Article 104, paragraphs 1 and 1-bis of Law No. 58/1998, and does not provide for the application of the breakthrough provisions set forth in Article 104-bis, paragraphs 2 and 3 of Law No. 58/1998.
There are no agreements indemnifying Directors in case of dismissal/revocation of their appointment without just cause, resignation or termination following a public purchase offer.
Procedures regulating the appointment of Board Directors are illustrated under the item 'Board of Directors' (see paragraph 'Composition, appointment and replacement of Board of Directors' on page 13).
The Board of Directors has the power to amend the Articles of Association in order to comply with the provisions of law and has all powers granted by Article 2365 of the Italian Civil Code, and Article 20 of Articles of Association (see paragraph 'Responsibilities, functions and powers of the Board of Directors' on page 15).
The Board of Directors does not have the power to increase the share capital, pursuant to Article 2343 of the Italian Civil Code. The number of treasury shares held by the Company at December 31, 2014 was 1,939,832, equal to 0.44% of the share capital. The Shareholders' Meeting had resolved to buy back shares for allocation to the Stock Option Plans between 2002 to 2008. This resolution is no longer in force.
The Company is subject to the direction and coordination of Eni SpA, pursuant to Article 2497 (and subsequent amendments) of the Italian Civil Code.
The Corporate Governance of Saipem SpA is based on international best practice standards and, in particular, on the principles of the Corporate Governance Code (hereafter Code) of listed companies approved by the Corporate Governance Committee, in addition to all relevant provisions of regulations issued by Italy's Securities and Exchange Commission (Consob).
At their Meeting of December 14, 2006, the Board of Directors moved to adopt the recommendations and principles of the current Code, in compliance with a similar resolution taken on November 9, 2000, and to monitor its actual implementation.
At their Meeting of December 13, 2011, the Board of Directors resolved on the implementation of Article 6 of the Corporate Governance Code, as modified in March 2010, and following the publication of a new version of the Corporate Governance Code of Listed Companies in December 2011.
The Board of Directors, at their Meeting of January 8, 2013, approved adherence to the following basic principles: (i) taking into account the Board review evaluating the function, size and composition of the Board and its Committees, it will recommend to the Shareholders' Meeting, before the appointment of the new Board of Directors, the professional profiles that are deemed appropriate in the Board; (ii) from the next appointment of the Board of Directors, the CEO shall not hold another directorship at any listed company outwith the Group whose CEO is a Saipem Director; (iii) having evaluated the opinions of the Board of Statutory Auditors and the Audit and Risk Committee, the Board of Directors shall review the results expressed by the Audit Company in their recommendation letter and in their Audit Report.
At the same Meeting, the Board of Directors approved the document entitled 'Saipem SpA Board of Directors' Guidelines on Internal Audit', which updates the previous guidelines approved by the Board on April 22, 2009 and implements the Code's recommendations in terms of roles, responsibilities, goals and reporting of the Internal Audit function.
Despite the fact that the Company was already largely conforming with the recommendations of the Code, at their Meeting of January 26, 2015, the Board of Directors formally adopted the provisions issued by the Corporate Governance Committee of Borsa Italiana (hereinafter 'Committee') on July 14, 2014, relating to modifications made to Article 6 of the Code (Directors' remuneration). These introduce the principle and implementation criteria, based on which, the issuer shall issue a press release providing details to the market of any indemnification and/or other benefit paid to an Executive Director or General Manager when their mandate expires or employment contract is terminated.
Again Article 6 of the Code recommends the introduction of clawback clauses, whereby Directors are bound to totally or partially repay the variable part of their remuneration (or to have future payments withdrawn), when these were allocated based on data which later proved to be plainly incorrect.
The guidelines contained in the Code, in line with EU Recommendation No. 208/2014 and the 'comply or explain' mechanism set forth in Article 123-bis of Law No. 58/1998, provide that detailed explanation be given whenever its recommendations are not implemented.
With respect to the Board Review, Article 1 of the Code recommends that the annual Corporate Governance Report provide information as to the identity of the external consultant and the additional other services they may provide the Company; furthermore, Article 1 also states that the documentation to be provided in advance of Board meetings be sent in a timely, complete and confidential manner and that, should it not be possible to provide it well in advance, the Chairman shall ensure that the necessary analysis be carried out during Board meetings. Since adopting the Corporate Governance Code, the Board of Directors has taken necessary resolutions to implement and specify the provisions contained therein.
This annual Corporate Governance Report was prepared, as in previous years, utilising the format of Borsa Italiana SpA (5th Edition - January 2015)4. The Company strived to provide correct, exhaustive and effective information consistent with the characteristics of its business activities and corporate objectives, and in line with market requirements.
Saipem SpA and its subsidiaries are not subject to any non-Italian legal requirement that may influence the Corporate Governance of the Issuer.
(4) The Corporate Governance Report format of Borsa Italiana SpA, 5th Edition (January 2015), is available at www.borsaitaliana.it.
The Board of Directors, comprising nine members, was appointed by the Shareholders' Meeting on May 6, 2014 for a one-year period, its mandate expiring at the Shareholders' Meeting called to approve the Financial Statements at December 31, 2014. At the same Meeting, the Shareholders appointed the Chairman of the Board of Directors.
At the Meeting of May 9, 2014, the Board of Directors appointed the CEO, granting him adequate powers to carry out his responsibilities. Following the resignations of one Director on August 6, 2014, the Board of Directors co-opted one Board Director on September 23, 2014. The appointment of Directors occurs pursuant to Article 19 of Articles of Association, through voting from lists, so as to allow the appointment of minority interest representatives and to ensure gender balance. Lists are filed at the Company's registered headquarters at least twenty-five days prior to the Shareholders' Meeting (first call) and are published in compliance with current legislation and Consob regulations. Voting lists include professional résumés for all candidates, their declarations accepting the nomination, stating that there are no grounds for ineligibility and/or incompatibility, and that they meet the integrity and/or independence requirements. Lists can be presented by Shareholders, who, individually or with others, hold voting shares representing at least 1% of the share capital, as per Consob Resolution No. 19109 of January 28, 2015. Lists that feature three, or more than three, candidates must include both genders, in compliance with current legislation on gender balance5. When the number of the least-represented gender must, by law, be at least three, the lists from which most Board members are selected must include at least two candidates from the least represented gender.
Seven tenths of Directors are appointed from the list that has obtained the majority of votes (rounded down if necessary). The remaining Directors shall be selected from the other lists, provided they are not in any way, not even indirectly, linked with the Shareholders who have presented or voted for the list that has obtained the majority of votes. Therefore, votes obtained for each list will be successively divided by one, two, three and so on, until the remaining number of Directors to be appointed has been reached. The ratios obtained will be progressively attributed to candidates from each list, in the order attributed to each candidate within that list. Candidates will be classified in decreasing order according to their respective ratios, and those who have received the higher ratios will be appointed. In the event that more than one candidate obtains the same ratio, the candidate on the list with no Director yet appointed or on the list with the lowest number of Directors appointed will be elected. If these lists have yet to elect a Director, or if they have already appointed an equal number of Directors, the candidate on the list with the highest number of votes shall be appointed. In the event that the vote is still tied, the Shareholders' Meeting will vote again, but only amongst the candidates under ballot, and the candidate who receives the majority of votes will be elected.
Should this procedure fail to appoint the minimum number of independent Directors required by the Articles of Association, the ratio of votes is calculated for each candidate from said lists by dividing the votes received by each list by the order number of each candidate. Candidates who do not meet independence requirements with lowest ratios from all lists are replaced, starting from the last one, by independent candidates from the same list (in the order they appear on the list), or by persons who meet the independence requirements appointed by the Shareholders' Meeting through a majority vote as required by law. In the event that candidates from different lists obtain the same ratio, the candidate on the list with the highest number of Directors already appointed will be replaced, or the candidate from the list that received the fewest votes, or should the number of votes be the same, the candidate who obtains the fewest votes by the Shareholders' Meeting in an ad-hoc ballot. Should this procedure fail to meet the requirements of regulations on gender balance, the ratio of votes is to be calculated for each candidate taken from the lists by dividing the votes received by each list by the order number of each candidate. The candidate of the most represented gender with the lowest ratio amongst candidates from all lists is replaced, provided the minimum number of independent Directors is met, by the candidate from the fewest represented gender with the higher order number in the same list of the replaced candidate, or by a person appointed by the Shareholders' Meeting through a majority vote as required by law. If candidates from different lists obtain the same minimum ratio, the candidate from the list which has appointed the greater number of Directors is replaced, or the candidate from the list that obtained the fewest votes, or, if votes are equal, the candidate who obtains the fewest votes by the Shareholders' Meeting in an ad-hoc ballot.
This voting procedure is applicable only when the entire Board of Directors is to be renewed. Should the need arise for one or more Directors to be replaced during their mandate, the procedure as per Article 2386 of the Italian Civil Code is applied. Should the majority of Directors become unavailable, the entire Board of Directors shall be considered void. A Shareholders' Meeting shall be called by the outgoing Board to elect a new one. In any case, current legislation must be complied with vis-à-vis the minimum number of independent Directors and gender balance quotas.
When the current Board was elected in 2014, two lists of candidates were put forward, one by Eni SpA and the other by Institutional Investors.
Candidates declared that they met the integrity requirements prescribed by regulations, and possessed the professional expertise, competence and experience to carry out their mandate efficiently and effectively and that they were able to dedicate sufficient time and resources to their office. Pursuant to Criteria 1.C.2 of the Code, information regarding offices of Directors or Auditors held by members of the Board of listed companies, financial or insurance companies or companies of considerable size is provided below under 'Cumulation of offices'.
The Board comprises the Chairman Francesco Carbonetti (independent and non-executive Director), the CEO Umberto Vergine (non-independent and executive Director), and the Directors Rosario Bifulco (independent and non-executive Director), Nella Ciuccarelli (independent and non-executive Director), Federico Ferro-Luzzi (independent and non-executive Director), Francesco Gattei6 (non-independent and non-executive Director), Guido Guzzetti (independent and non-executive Director), Enrico Laghi (independent and non-executive Director), Nicla Picchi (independent and non-executive Director). All members of the Board have been in office since May 6, 2014, with the exception of the CEO, Umberto Vergine, who has been a member of the Board of Directors since October 27, 2010.
Francesco Carbonetti, Fabrizio Barbieri7, Rosario Bifulco, Nella Ciuccarelli, Enrico Laghi and Umberto Vergine were proposed as candidates by Eni, whose list obtained 44.08% of the voting shares.
Federico Ferro-Luzzi, Guido Guzzetti and Nicla Picchi were proposed as candidates by Institutional Investors – AcomeA SGR SpA and others – obtaining 28.74% of voting shares.
The professional résumés of all Directors are posted on the Company's website www.saipem.com under the section 'Corporate Governance'. Article 19 of the Articles of Association has been adjusted to comply with new Article 37, paragraph 1, letter d) of Market Regulations, whereby the Board of Directors of a listed subsidiary subject to management and coordination by another listed company shall be comprised of a majority of independent Directors, identified as such in compliance with the law and current regulations. This amendment took effect from the appointments made at the Shareholders' Meeting of May 4, 2011. Following the introduction of Law No. 120 of July 12, 2011 (effective from August 12, 2011) and Consob Regulation No. 18098 of February 8, 2012, this Article has been further amended to ensure gender balance in management and control bodies of listed companies.
Board Directors, following their appointment and annually thereafter, shall state that they fulfil both the independence and integrity requirements pursuant to current legislation, and the Board of Directors verifies that these subsist.
At their Meeting of March 10, 2015, the Board of Directors, based on the declarations provided and on information at the Company's disposal, ascertained that Board Directors meet both the independence and integrity requirements, and that no reasons for ineligibility or incompatibility subsist. The Board of Statutory Auditors verified that the Board correctly applied all the relevant criteria and procedures to assess the independence of its members.
As of March 10, 2015, the date of the approval of this Report, in consideration of the nature of the Company's shareholding structure and the role of co-ordination and direction exercised by the parent company Eni SpA, the Compensation and Nomination Committee has not put forward a succession plan of Saipem's executive Directors.
However, Saipem defined a procedure to identify successors for those managerial positions that are within the remit of the Compensation and Nomination Committee (i.e. Senior Managers whose appointment is the responsibility of Saipem's Board of Directors), in addition to roles of strategic interest.
This succession plan for the aforementioned positions is a procedure that has been in force at Saipem since 2012. It provides the following phases:
Succession plans for positions of strategic interest in Saipem represent a reference point when making decisions concerning managerial development and enhancement.
Pursuant to items 1.c.2 and 1.c.3 of the Corporate Governance Code, to ensure that Directors can devote enough time to their office, the Board of Directors on March 28, 2007 expressed the following guidelines on the number of offices a Director may hold:
Offices held at companies of the same Group are excluded from the limit of cumulation.
Should the aforementioned limits be exceeded, Directors shall immediately inform the Board of Directors, who, after assessing the position and, in light of the Company's interests, shall invite the Director to take the relevant decisions.
(6) Francesco Gattei was appointed by co-optation on September 23, 2014 following the resignations of Fabrizio Barbieri.
(7) Resigned on August 6, 2014.
Based on the information received, listed hereunder are additional directorships or auditor posts held by Saipem's Board Directors in other companies.
Chairman of 'CNP-Unicredit Vita SpA'.
Chairman of 'Banca ITB', 'Sorin SpA' (listed company) and 'Victor L sas'; Sole Director of 'Bootes Srl'; Board Director of 'DeA Capital SpA' (listed company), 'Humanitas SpA', 'Italian Hospital Group SpA', 'Italian Hospital Group 2 SpA', 'Istituto Europeo di Oncologia Srl', 'Neaheliopolis SpA'; Director of 'Assolombarda'.
Independent Director of 'Astaldi SpA' (listed company) until July 2014.
Chairman of the Board of Directors of 'Beni Stabili SpA' (listed company), 'Midco Srl'; Board Director of 'B4 Holding SpA' and 'C.A.I. SpA'; Chairman of the Board of Statutory Auditors of 'Prelios SpA' (listed company), 'Acea SpA' (listed company) and 'Huffington Post Italia Srl'; Statutory Auditor of 'Unicredit SpA' (listed company).
Board Director and member of the Compliance Committee of 'Unipol-SAI SpA' (listed company); Board Director and Chairman of the Compliance Committee of 'Sabaf SpA' (listed company); Chairman of the Compliance Committee of 'Alfa Acciai SpA', 'Gefran SpA' and 'Faringosi Inges Srl'.
After the appointment of the current Board by the Shareholders' Meeting on May 6, 2014, from the Board Meeting of May 9, 2014, Saipem set up and rolled out a board induction programme to enable new Directors to progressively acquire in-depth knowledge of the Company both in terms of its industrial, operational and commercial profile, and its financial, Governance and Compliance profile.
The programme, which also involved the members of the Board of Statutory Auditors, was divided into three modules:
and took place on May 26, June 11, July 23, 29, and September 23, 2014.
During a series of meetings, the Company's top management presented Saipem's operations and organisation, its various Business Units and main subsidiaries, providing a thorough analysis of the issues of major interest to the Directors and Statutory Auditors.
In 2014, meetings were held at the offices of Saipem's Egyptian subsidiary MISR for Petroleum Services (S.A.E.) in Egypt, on-board the vessel 'CastorOne' and at Saipem's site in Shah, in the United Arab Emirates.
The Board of Directors is the central body within the Corporate Governance system of Saipem SpA and the Saipem Group. Article 20 of the Articles of Association states that the management of the Company is the exclusive responsibility of the Board of Directors.
Article 2365 of the Italian Civil Code and Article 20 of the Articles of Association grant the Board the power, normally the responsibility of the Extraordinary Shareholders' Meeting, to resolve on motions concerning:
In addition to the powers granted by Article 2381 of the Italian Civil Code, taking into account the instructions of the Corporate Governance Code of listed companies and based on a Board resolution dated May 9, 2014, Saipem's Board of Directors is responsible for:
The following are considered significant operations:
The Shareholders' Meeting endorsed the competition ban provided for in Article 2390 of the Italian Civil Code.
Pursuant to Article 2391 of the Italian Civil Code, Directors shall inform the other Directors and the Statutory Auditors of interests they may have, on their own behalf and on behalf of third parties, in any specific Company operation.
At Board Meetings, the Chairman reminds the Board of Directors that, pursuant to Article 2391 of the Italian Civil Code, Board Directors must voice any interests they may have, directly or through a third party, related to any items on the Agenda before they are discussed. Directors have to state the nature, origin and relevance of these interests, if any.
The Chairman organises the activities of the Board of Directors and ensures that the Directors and Statutory Auditors are provided with all necessary documentation and information in a timely manner to enable them to make decisions. Meeting documents are sent preferably no later than the notice of meeting (at least five days before the Meeting). To this end, in 2013 a new IT platform named 'BoardVantage' was launched to enable the sharing and exchange of documents, notes and messages amongst the company departments and the Board of Directors, or amongst members of the Board. The system ensures the highest confidentiality through appropriate access credentials. The Secretary of the Board of Directors ensures the timely and accurate delivery of pre-meeting information and can be contacted by Board Directors and Statutory Auditors to provide clarifications and additional information. Should it not be possible to provide pre-meeting documentation well in advance, the Chairman shall ensure that the necessary analysis be carried out during Board meetings.
To improve the Board's knowledge of the Company's operations and dynamics, the COOs of the Business Units are periodically invited to Board meetings to illustrate the most significant projects, strategies and market conditions in their respective areas. Specifically, the Directors of the following functions took part in Board induction sessions: 'Development, Organisation, Compensation and Management of Managerial resources', 'Onshore E&C' Business Unit, 'Offshore E&C' Business Unit, 'Floaters' and 'Drilling' Business units, 'Investor Relations', 'Administration, Finance & Control', 'General Counsel, Company Affairs and Corporate Governance'. Furthermore, all Board meetings are also attended by the Chief Operating Officer - COO Giuseppe Caselli and the Chief Financial and Compliance Officer - CFCO Alberto Chiarini.
The Company's Articles of Association do not specify how often the Board should meet, although Article 21 states it has to occur at least quarterly as follows: 'The Directors inform the Board of Directors and the Board of Statutory Auditors promptly or at least every quarter on Company activities, major economic and financial transactions involving the Company or its subsidiaries; in particular they report those operations in which they have an interest, on behalf of themselves or third parties, or those operations that are subject to the influence of the controlling party'.
In 2014, the Board of Directors met on 14 occasions, their meetings lasting 3.30 hours on average; 4 meetings have been scheduled to take place in the first half of 2015; as of March 10, 2015, the Board has held 3 meetings. The general public is informed of the dates of Board Meetings when periodical statements and reports, required by current legislation, are to be approved.
The Board of Directors sets down the formalities pertaining to the calling of Board Meetings; in particular, meetings are convened by the Chairman, who also prepares the agenda for the meeting, through notices sent by post, fax or e-mail at least five days prior to the date of the meeting; in exceptional circumstances, notice is sent at least 24 hours prior to the time of the meeting. The Articles of Association allow for meetings to be held via video-conference link. Directors and Statutory Auditors are provided in advance with documents pertaining to items to be discussed and/or resolved on at the meeting.
In 2014, an average of 86.7% of Board Directors and 82.6% of independent Directors attended Board Meetings. The COO is invited to attend Board of Directors' meetings on a regular basis to report on the status of operations and the strategic prospects, and occasionally other Senior Managers involved in specific matters. Generally Board of Directors' meetings are also attended by the Company's CFCO.
The Secretary to the Board of Directors is present at every Board Meeting (this office is held by the Saipem's Senior Vice President General Counsel, Company Affairs and Corporate Governance, Mario Colombo).
In compliance with the Corporate Governance Code, Saipem's Board of Directors in 2014 carried out the annual review of the size, composition and functions of the Board itself and its Committees, by interviewing all Directors and the Chairman of the Board of Statutory Auditors and using a questionnaire.
Saipem's Board of Directors, with the support of the Compensation and Nomination Committee, entrusted the task of performing the Board review to the company Egon Zehnder International SpA, an independent consulting company that does not provide any other service to Saipem.
Based on the information they collected and their comparative analysis, the consultant expressed a positive opinion in terms of the Board's Compliance to the Corporate Governance Code.
The review was carried out using a tailor-made questionnaire and individual interviews, which focused on:
All Board Directors consider the current number of Directors to be appropriate, with a ratio between 7 independent and 2 non-independent Directors, which is ideal to ensure the proper management by the Board of its Committees and of situations presenting a potential conflict of interests.
The vast majority of Directors deem the qualitative profile of the Board to be altogether correct and the mix of Directors' competencies and experience appropriate. Furthermore, they deem 'gender diversity' to be suitably represented, however they are aware that the next Board shall have to improve gender balance in line with the relevant legal provisions.
The majority of Directors recommend strengthening sector specific competencies, international experience, strategic and market know-how, through the appointment of a single new Board member.
All Board Directors wish for stability in the composition of the next Board of Directors, so as not to waste the important effort made by the Directors over recent months for their induction and training in Saipem-specific business.
All Board members maintain that the contribution made by the independent Directors to the work of the Board is not formal but one of substantial independence.
The vast majority of Directors deem the Induction programme to be effective and comprehensive, specifically:
The vast majority of Directors deem the duration, number of Board meetings and their attendance to be adequate.
All Directors positively evaluated the internal climate and the quality of Board discussions. The vast majority considers that decisions are taken based on in-depth analyses and discussions.
Directors deem meeting agendas to be adequate, putting forward some improvements for the future:
All Directors appreciated the Chairman's leadership and authority, his competencies and Independent profile, and the role he plays in supporting Directors in reaching broad consensus decisions.
Some members expressed the need to devote more time to absorb/debate a few business topics, as part of their learning curve of Saipem's world and their role as Directors.
The vast majority of Directors deem the relation between the CEO and the Chairman to be constructive and well-balanced.
Also the relation between the Board and the management is deemed to be open and cooperative, with most Directors expressing the need to further strengthen relations with the operational management.
Greatly appreciated is the comprehensive and well-structured information sent before Board meetings, as well as the presentations. Times and methods for circulating information are appreciated as is the 'BoardVantage' tool. A significant minority of Directors suggested contextualizing the presentations for projects on which the Board is called to take specific resolutions, with an improved effort on synthesis for larger projects. The top management of the Company has already welcomed this suggestion. All Directors consider the information they received regarding Consob's investigation and the 'Algeria' subject to have been adequate and satisfactory. The majority of Directors maintain that the strategy and communication process to the external market could be improved upon.
The Directors felt that they had analysed in depth the main causes for risk, and that they had provided the Company with pragmatic rather than theoretic support, applied to the specific context. The majority of Directors are satisfied with the initiatives Saipem launched to strengthen its Internal Control and Risk Management System, even though a minority believes there is still scope for improvement.
Most Directors are satisfied with their knowledge of the Company organisation; however, they wish to increase their knowledge of managers in key operational positions. In fact, they greatly appreciated the opportunities to visit the vessel Castorone in Egypt and the Yard at Shah (UAE).
The majority of members maintains that over the last nine months they have not received sufficient information on the quality of Human Resources responsible for implementing the Board's decisions. These topics shall be discussed at future meetings.
With regard to the size and composition of Board Committees, these are largely deemed appropriate by the Directors.
The Audit and Risk Committee provides information and documentation in an adequate fashion, is proactive and efficient, periodically reporting to the Board on forthcoming audit activities. A significant minority deems it expedient for the Board to discuss findings of Committees activities.
The Compensation and Nomination Committee provides information and documentation in an adequate fashion, is proactive and efficient, periodically reporting to the Board on the remuneration of the CEO and the top management positions. Some Directors wish for the Board to have more substantial information in matters of nomination, profiles considered and evaluation of solutions.
Additional Committees are not deemed to be required; however, increased co-ordination between the secretaries of the Committees and the secretary of the Board is advised, in order to adjust their respective activities.
The Company's Secretariat supports Board activities adequately, the minuting process being timely and efficient. The Secretary of the Board is positively appreciated for his Corporate Governance competencies and reliability.
Activities carried out by the Board of Statutory Auditors are illustrated to the Board clearly and efficiently. The Board appreciates the leadership of the Chairman and his communicative style.
Overall, all Directors are satisfied with the work carried out by the Board and remark on how well it functions. Main areas of excellence they found are:
active presence in the Board and its Committees, which enables the conscious and well-structured assumption of responsibility when taking decisions;
the Board induction programme.
Main areas of improvement are:
In view of its renewal, Saipem's current Board, in compliance with the recent provision of the Corporate Governance Code of Borsa Italiana, deemed it expedient to advise Shareholders on the composition and mix of competencies that should be considered when choosing the professional figures to be appointed to the new Board of Directors.
Hereafter are the results of the analysis carried out by the consultant:
Taking into consideration that:
in view of the renewal of the Board and in compliance with the directions of the Corporate Governance Code, the Board of Directors provides, through the Chairman, the following advice to the Shareholders on the qualitative and quantitative profile of the new Board. All Board Directors consider the current number of directors (9 members) to be appropriate; they also consider the current ratio between Independent (7) and non-independent Directors (2) to be appropriate.
With regard to its composition, all Board Directors wish for continuity for the next Board of Directors through the re-appointment of a significant number of members, so as to ensure stability and a return on investments made for their induction and training. Board Directors are aware of the need to increase by at least one person the number of Directors from the least-represented gender on the Board, in line with the relevant legal regulations.
Among their competencies and experience, they recommend:
Consistent with international best practices, which recommend avoiding the concentration of duties in one person, the Board of Directors resolved, at their Meeting of July 29, 2008, to separate the roles of Chairman and Chief Executive Officer (CEO), the latter being the administrator who, by virtue of powers granted and their actual exercise, is the principal person responsible for the management of the Company.
The Corporate Governance Committee of Borsa Italiana believes that the separation of the aforementioned roles can strengthen the characteristics of impartiality and balance required of a Chairman of the Board, to whom the law and procedure entrust the tasks of organising the work of the Board, as well as acting as a link between executive and non-executive Directors.
The separation of the roles of Chairman and Chief Executive Officer (CEO) makes the appointment of a lead independent Director unnecessary. Umberto Vergine (CEO) is the only executive Director; he does not hold other offices at any other Issuer.
The Board vested the CEO, the person ultimately responsible for the Company's management, with all ordinary and extraordinary powers to manage the Company, except for the undelegable powers and those of the Board itself. The Chairman is an independent and non-executive Director and is vested with all powers granted to him by law and the Company's Articles of Association.
Reporting to the CEO are: the COO (Chief Operating Officer), the CFCO (Chief Financial and Compliance Officer), the Senior Managers responsible for the following departments: Institutional Relations, Communication, Integrated Risk Management, Procurement Contract and Industrial Risk Management, Business and Technology Development, Quality, HSE and Sustainability, Human Resources, Organisation and Services to Personnel.
The Chairman chairs the Shareholders' Meeting, convenes and chairs Board of Directors' meetings and ensures the implementation of resolutions taken by the Board itself.
There are no other executive Directors on the Board.
Consob Resolution No. 17221 of March 12, 2010 (adoption of 'Related Parties' Regulations) amended through Resolution No. 17389 of June 23, 2010, had amended Article 37, paragraph 1, letter d) of Market Regulations, providing that the shares of a subsidiary subject to management and coordination by another company may only be admitted to trading if its committees are composed of independent Directors. For companies subject to management and coordination by another listed company, as in Saipem's case, the Board of Directors shall also be composed of a majority of independent members.
On December 13, 2010, the Board of Directors amended Article 19 of the Articles of Association, providing that the majority of Directors shall meet the independence requirements set by Consob for Directors of companies subject to management and coordination by another listed company. Hence, the Shareholders' Meeting of May 6, 2014 elected the new Board of Directors for the year 2014, and, in compliance with Article 37, paragraph 1, letter d) of Market Regulations, seven out of nine members appointed are independent Directors.
The Directors who do not comply with the independence requirement are the executive Director Umberto Vergine, and the non-executive Director Francesco Gattei.
Following their appointment, the Board of Directors ascertains annually that Board Directors still comply with the independence requirements. At the Board Meeting of March 10, 2015, it was ascertained that all Board Directors comply with the independence requirements. The Board of Statutory Auditors has assessed the application of criteria and procedures adopted by the Board of Directors to ascertain the independence of its members and found them to be compliant. Directors are committed to inform the Board of any changes that may ensue during their mandate. This evaluation is carried out in accordance with the criteria set forth in Article 148, paragraph 3 of Law No. 58/1998 and in the Corporate Governance Code.
Independent Directors have not deemed it necessary to meet without the other Directors in view of the fact that they take an active part in Committee meetings.
At their Meeting of March 13, 2013, the Board of Directors approved the Management System Guideline 'Market Abuse'8, which consolidates in the same document procedures previously in force in matters of inside information and relevant Register of personnel having access to them, and internal dealing.
The Management System Guideline ('MSG') 'Market Abuse' sets forth the principles and the rules whereby Saipem SpA and its direct or indirect subsidiaries, in Italy or abroad should undertake the internal management and disclosure to third parties of Company documents and information concerning Saipem, with particular reference to inside information. To this end, this MSG also governs the creation, maintenance and updating of the Register of persons having access to the aforesaid information, as well as the identification of the relevant persons and disclosures relating to the transactions undertaken by them, including those handled by proxies, involving the shares issued by Saipem SpA or by listed Subsidiaries or other financial instruments linked to these shares ('Internal Dealing').
As Saipem SpA is considered to be a relevant Company for the purposes of this same Eni procedure, it decided to manage its own Register autonomously.
Specifically, striving for continuous improvement, the procedure:
On October 28, 2013, the Audit and Risk Committee being in favour, the Board of Directors identified persons considered relevant for the purposes of internal dealing disclosures pursuant to the 'Market Abuse' procedure: these are the members of the Executive Committee and all personnel reporting directly to the CEO.
(8) The procedure 'Market Abuse' is published on Saipem's website www.saipem.com under the section 'Corporate Governance'.
As and when provided by law, sale or purchase transactions involving Saipem shares are disclosed to Consob, Borsa Italiana and the public through the relevant section of the IT platform SDIR-NIS and subsequently sent to the authorised storage mechanism 'NIS Storage' () and published on the Company's website.
With the implementation of the 'Market Abuse' MSG on May 9, 2013, new provisions have been put in place to make the Register of parties having access to sensitive information compliant to the new guidelines. All Group subsidiaries have implemented this MSG through a resolution of their own Board of Directors, whilst all subsidiaries considered relevant have delegated the task of maintaining their Registers to Saipem SpA.
Relevant subsidiaries inform the person responsible for the Register of Saipem SpA of the personal details and information on individuals (including external personnel) who have access to sensitive information, who are to be enrolled on the register. They also provide updates for individuals already on the Register.
When the list of relevant subsidiaries is updated for the purposes of SOA or in case of relevant occurrences, the relevant Corporate functions inform the register of any changes in the list of relevant subsidiaries.
In order to carry out its responsibilities more efficiently, the Board set up two committees: the Compensation and Nomination Committee and the Audit and Risk Committee. Both are comprised entirely of non-executive independent Board Directors, all of whom are experts in accounts, finance and risk management.
In compliance with a Board resolution dated May 26, 2014, the committees are comprised of:
The responsibilities of the Compensation and Nomination Committee, in addition to those provided for in the Corporate Governance Code, include propositive and consultative activities towards the Board in relation mainly to: senior managerial appointments within the competence of the Board of Directors; annual review of the Board of Directors and its committees; direction on the cumulation of offices held by Directors; assessment of their meeting legal requirements. The current composition of the Compensation and Nomination Committee is compliant with the requirements of the Corporate Governance Code, being made up entirely of non-executive independent Directors.
The Audit and Risk Committee has the duty to consult and support the Board of Directors in matters relating to the Internal Control and Risk Management System, and the approval of the periodic financial reports. The current composition of the Audit and Risk Committee complies with the requirements of the latest Corporate Governance Code, being comprised entirely of non-executive independent Directors.
Following the introduction of the procedure 'Transactions involving interests held by Board Directors and Statutory Auditors and transactions with related parties', the Compensation and Nomination Committee and the Audit and Risk Committee provide the Board of Directors with opinions, as per the procedure (please refer to the section 'Directors' and Statutory Auditors' interests and transactions with related parties', page 34).
The Compensation Committee, renamed 'Compensation and Nomination Committee' on February 13, 2012, was set up by the Board of Directors in 1999. The composition, appointment, responsibilities and method of operations of the Committee are governed by its Regulations approved by the Board of Directors on February 13, 2012 and available at www.saipem.com under the section 'Corporate Governance'.
In line with the latest recommendations of the Corporate Governance Code, the Committee is comprised of three non-executive independent Directors. The Committee's regulations provide that at least one member has adequate knowledge and experience in matters of finance and compensation, as assessed by the Board at the time of their appointment.
Until the renewal of the corporate bodies by the Shareholders' Meeting on May 6, 2014, the Committee was comprised of the following non-executive independent Board Directors: Gabriele Galateri di Genola, in his capacity as Chairman, Nicola Greco and Maurizio Montagnese. The new Board of Directors at their Meeting of May 26, 2014 appointed as members to the Committee non-executive independent Board Directors, pursuant to the law and the Corporate Governance Code: Rosario Bifulco (Chairman), Nella Ciuccarelli and Federico Ferro-Luzzi.
Saipem's Executive Vice President for Human Resources, Organisation and Services to Personnel, or in his stead the Senior Vice President for Development, Organisation, Compensation and Management of Managerial Resources acts as Secretary of the Committee.
The Committee fulfils a propositive and consultative role to the Board of Directors and specifically:
having first reviewed CEO directions, it proposes the general remuneration criteria applicable to Senior Managers with strategic responsibilities, annual and long-term incentive plans, and stock-based plans; it sets performance targets and reviews the Company's performance results in order to determine the variable remuneration of executive Directors and the implementation of incentive plans;
periodically assesses the adequacy, consistency and actual operation of the Remuneration Policy, providing the Board with relevant proposals;
In fulfilling its duties, the Committee provides opinions, as and when required by the current internal regulation in terms of transactions with related parties.
The Committee meets as often as is required to carry out its role, usually on the dates provided for in the annual meeting schedule approved by the Committee itself. A Committee Meeting is deemed valid when a majority of members are present, and resolutions are passed with the absolute majority of attending members. The Board of Directors provides the Committee with the necessary resources to carry out its responsibilities. The Committee can access information and Company departments as required in order to fulfil its duties. It can also have recourse, through the latter, to external consultants, ensuring that no reasons exist that could compromise the independence of their judgement.
The Chairman of the Board of Statutory Auditors (or other Statutory Auditor designated by the latter) may attend Committee meetings; other Statutory Auditors may also attend when the Committee discusses matters for approval by the Board of Directors that are subject to the mandatory opinion of the Board of Statutory Auditors. At the request of the Chairman of the Committee, other persons can be invited to attend Committee meetings to provide information and evaluations within their area of expertise on individual items on the meeting agenda. The meetings of the Compensation and Nomination Committee are not attended by the Directors involved where remuneration proposals are discussed that are to be put forward to the Board.
The Committee carries out their responsibilities based on their annual programme, which comprises the following phases:
In 2014, the Committee, in its former and current composition, convened on 7 occasions, with meetings lasting an average of 1 hour and 33 minutes and attendance by 100% of members. The Chairman of the Board of Statutory Auditors attended all meetings, which were all minuted. During the first part of the year, the work of the Committee focused on the impact of Article 84-ter of Law No. 98 dated August 9, 2013, and the introduction of the new Long-Term Monetary Incentive Plan linked to the share price, and based on new criteria of performance and new reference Peer panel. This proposal was submitted to the binding vote of the Shareholders' Meeting on May 6, 2014, which approved the Plan. The Committee also carried out its periodic evaluation of the remuneration policy implemented in 2013, drawing up the new Remuneration guidelines for 2014 in light of recent events and Company results, reviewing the Company's actual results for 2013, identifying performance targets for 2014 vis-à-vis variable incentive plans. It also reviewed Saipem's 2014 Remuneration Report, evaluated candidates to the office of Chairman of the Compliance Committee and identified proposals for the remuneration of the CEO, the Chairman and non-executive Directors serving on Board Committees, members of the Compliance Committee and the Senior Vice President for Internal Audit. During the second part of the year the Committee reviewed the votes cast at the Shareholders' Meeting on the Remuneration Policy for 2014. They also evaluated candidates for positions on the Compliance Committee. It fulfilled the requirements relating to the annual self-review of the Board of Directors and its Committees and reviewed actual 2013 results for the purposes of the Long-term Monetary Incentive Plan aimed at top managers and managerial resources deemed of critical importance. Proposals were finalised on the new Long-term Monetary Incentive Plan also aimed at top managers and critical resources, and its implementation methods.
The Committee scheduled at least 8 meetings to take place during 2015, 4 of which have already been held as of March 10, 2015. These focused on the review of the remuneration policies of 2014 and the definition of remuneration proposals for 2015, the remuneration of the CEO, the Chairman and non-executive Directors who will serve on Board committees from the new Board mandate, actual results achieved in 2014 and the identification of 2015 performance targets for the purposes of variable incentive plans.
section of the Remuneration Report, pursuant to current legislation.
The Committee reports, through the Chairman of the Committee, on the methods used to carry out its responsibilities to the Shareholders' Meeting called to approve the Financial Statements, pursuant to the provisions set forth in the Committee's Regulations and the Corporate Governance Code, with the aim of establishing a dialogue with Shareholders and Investors.
Further information on the Compensation and Nomination Committee is available, in compliance with Article 123-ter of Law No. 58/1998, in the Remuneration Report.
Article 123-ter of Law No. 58/1998 has made it compulsory for listed companies to publish a 'Remuneration Report', whose contents and methods of publication are governed by Consob, through Article 84-quater of Issuers Regulations issued on December 23, 2011. This Consob resolution took effect on December 31, 2011, making it compulsory to issue this new Remuneration Report from 2012 onwards. For all issues relating to the remuneration of Directors, Statutory Auditors and Senior Managers with strategic responsibilities please refer to the 'Remuneration Report', which is available to the public at Saipem's registered office or on the Company's website www.saipem.com under the section 'Corporate Governance - Documents' at least 21 days prior to the General Shareholders' Meeting called to approve the Financial Statements for the year 2014. At the General Shareholders' Meeting, Shareholders will be required to cast a non-binding vote on the first
In compliance with the Board resolution of November 9, 2000, the Audit and Risk Committee fulfils a preparatory, consultative and propositive role regarding the general management of the Company. On February 13, 2012, the Board of Directors implemented the Audit and Risk Committee, in accordance with the Corporate Governance Code for Listed Companies issued by Borsa Italiana SpA in December 2011. On May 29, 2013, the Board also approved an updated version of the Regulations of the Audit and Risk Committee. In accordance with the current Regulations, the Chairman of the Board of Statutory Auditors, or an Auditor appointed by the Chairman, and the Chief Financial Officer (now CFCO) takes part in the Committee's activities. The Audit and Risk Committee meets regularly with Saipem's CEO and COO. The Senior Vice President of Internal Audit is the Committee's Secretary and assists the Audit and Risk Committee in its duties. On January 26, 2015, the Board of Directors adhered to the Corporate Governance Code of Italian listed companies – edition July 2014 – and approved the Guidelines for the Internal Control and Risk Management System. The Audit and Risk Committee's responsibilities are:
The Audit and Risk Committee has access to information and Company departments as required to carry out its duties. The Audit and Risk Committee can draw on the necessary financial resources, approved by the Board of Directors, to carry out its responsibilities. The Audit and Risk Committee reports to the Board of Directors at least every six months, providing a detailed account of work carried out, and the adequacy of the Internal Control and Risk Management System. The Committee also ensures the information flow towards the Board of Statutory Auditors to enable the prompt exchange of the information necessary for the fulfilment of their respective responsibilities within the common remit and to ensure the orderly performance of business functions.
The Audit and Risk Committee has access to information and Company departments as required to carry out its duties. The Audit and Risk Committee can draw on the necessary financial resources, approved by the Board of Directors, to carry out its responsibilities.
The Audit and Risk Committee convened 15 times in 2014, with meetings lasting on average 3.5 hours and average attendance of 83% of members. Main activities consisted of:
reviewing and evaluating the outcome of internal audit actions;
checking that the Senior Vice President for Internal Audit continues to meet the integrity, professionalism, competence and independence requirements;
As of the date of the approval of this Report (March 10, 2015), the Committee has already met on 4 occasions.
Internal control over financial reporting is a system designed to provide reasonable assurances regarding the reliability, accuracy, fairness and timeliness of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles.
In accordance with the provisions of the law, the Officer responsible for the Company's financial reporting is responsible for the internal control system with regard to financial reporting and, to this aim, establishes the administrative and accounting procedures necessary for drafting the periodic accounting documentation and any other financial notification; moreover, he/she certifies, together with the CEO, their adequacy and actual implementation during the period to which the aforementioned accounting documents refer, by means of an appropriate report on the annual financial statements, on the half-yearly financial statements and on the consolidated annual financial statements. Pursuant to the aforementioned Article 154-bis, the Board of Directors ascertains whether the AO has appropriate powers and means to perform the assigned duties, in addition to supervising the actual conformity to these procedures.
The 'Guidelines on internal controls over financial reporting' approved by the Board of Directors on October 29, 2007, and later amended by the Management System Guideline 'Internal Controls over Corporate Reporting - Rules and Procedures' approved by the Board of Directors on December 13, 2011, and the Management System Guideline 'Internal Controls over Financial Reporting' approved by the Board of Directors on July 30, 2012, are aimed at achieving healthy and fair business management; they define rules and methodologies on the design, implementation and maintenance of the internal control system over Saipem's financial reporting, as well as on the evaluation of the system's effectiveness. On January 26, 2015 with the support of the Audit and Risk Committee, the Board of Directors approved an updated version of the MSG - Internal Control and Risk Management System focusing on four main topics:
These regulations and methodologies have been designed in accordance with the provisions of the aforementioned Article 154-bis of Law No. 58/1998 and of the USA law Sarbanes-Oxley Act of 2002 (SOA) which Saipem is required to comply with as a subsidiary of Eni, whose securities are listed on the New York Stock Exchange (NYSE), and based on the CoSo Report ('Internal Control - Integrated Framework' published by the Committee of Sponsoring Organizations of the Treadway Commission - 1992, updated in May 2013).
In accordance with international accounting principles, the Management System Guideline 'Internal Controls over Corporate Reporting' is applicable to Saipem SpA and its direct and indirect subsidiaries, in consideration of their relevance for the preparation of financial reporting. All controlled companies, regardless of their relevance with respect to Saipem's internal control system, use this Management System Guideline as a reference for the design and implementation of their own internal control system, in order to ensure its adequacy in relation to the size of the company and the nature of its business.
The internal control system was designed in accordance with two fundamental principles: to extend control to all levels of the organisational structure, consistent with operating responsibilities; and the sustainability of controls in the long term, so as to ensure that the performance of controls is increasingly integrated and compatible with operational requirements.
The design, implementation and maintenance of the internal control system are ensured through: risk assessment, control identification, evaluation and reporting.
The risk assessment process has a top-down approach aimed at identifying those organisational departments, processes and specific activities that bear the risk of unintentional errors and/or fraud, which could have a material impact on the financial statements.
The identification of companies that fall within the scope of the internal controls system is based both on their contribution to the consolidated financial statements (turnover, net debt, net revenues, profits before taxation) and their relevance in terms of processes and specific risks9. Among the companies identified as relevant for the purposes of internal controls, significant processes are then identified based on an analysis of quantitative factors (processes involved in the calculation of items featured in the financial statements which are greater than a certain percentage of profits before taxation), as well as qualitative factors (for instance: complexity of the accounting treatment used for an item; new items or significant changes in business conditions).
Risks are assessed for relevant processes and activities, i.e. potential events whose occurrence could compromise the achievement of the control objectives for financial reporting (for instance financial statements assertions). These risks are prioritised in terms of their potential impact and likelihood of occurrence, based on quantitative and qualitative parameters and assuming no controls. Saipem carries out a specific assessment on risks of fraud10, using a methodology based on the 'Anti-fraud Programmes and Controls' included in the Management System Guideline 'Internal Controls over Financial Reporting'.
Controls are defined for the individual company, processes and associated risks deemed relevant. The control system comprises of entity level controls, which operate across the relevant entity (Group/individual company) and process level controls.
A checklist based on the model adopted in the CoSo Report divides entity level controls into five components.
In May 2013, the Committee of Sponsoring Organisations of the Treadway Commission (CoSO) updated the framework for the internal control system (so-called 'CoSO Framework') used as reference by Saipem for its own Internal Control over Financial Reporting.
Main amendments made to the CoSO Framework were aimed at:
identifying criteria for the definition, implementation and evaluation of the control system;
placing increased attention on targets for operations, compliance and non-financial reporting (sustainability, transparency, integrity).
In the new version of the CoSO Report, the five components of the Internal Control System framework (control environment, risk assessment, control activities, IT systems and information flows, and monitoring activities) are unchanged. However, the new version has detailed 17 principles whose existence and correct implementation are essential to ensure the effective operation of the single components of the internal control system.
The 'control environment' component includes all activities relating to the definition of time-frames for the preparation and publication of financial results (interim and annual financial statements and associated financial calendars); the 'control activities' component covers organisational and regulatory structures that guarantee the achievement of financial reporting objectives (for instance: the review and updating by specific departments of rules relating to the preparation of financial statements and charts of accounts); the component 'IT systems and information flows' includes management controls over the consolidation process (Mastro).
Process level controls are divided into specific controls, which are all activities, both manual and automated, aimed at preventing, identifying and correcting errors and irregularities occurring during operating activities; and pervasive controls, which are structural elements of the internal control system aimed at establishing a general environment which promotes the correct execution and control of operational activities (for instance segregation of incompatible duties and general IT controls).
Specific controls are detailed in ad-hoc procedures which define Company processes and the 'key controls', whose absence or non-implementation entails the risk of significant error/fraud in the financial statements which cannot be detected by other controls.
Entity Level Controls and Process Level Controls are constantly monitored to evaluate their design and operational effectiveness; this is done by means of ongoing monitoring activities carried out by the managers in charge of the relevant processes/activities, and through
(9) Companies subject to internal controls include those incorporated under and regulated by non-EU member state legislations, for which the provision of Article 36 of Consob Market Regulations apply. (10) Fraud: for the purposes of the Internal Control System, this refers to any international act or omission that may result in false representation or misleading reporting.
separate evaluations carried out by the Internal Audit department in accordance with an audit plan provided by the Chief Financial and Compliance Officer/Manager responsible for financial reporting11 which defines the audit scope and objectives to be implemented through agreed-upon audit procedures.
Monitoring activities highlight possible deficiencies in the control system; these are evaluated in terms of probability of occurrence and impact on Saipem's financial reporting and, based on their significance, are classed as 'deficiencies', 'significant weaknesses' and 'material weaknesses'.
The findings of monitoring activities regarding the state of the internal control system are periodically reported using IT tools that ensure the traceability of information relating to the adequacy of design and the operational effectiveness of controls.
The work of the CFCO/Manager responsible for preparing financial reports is supported by various departments within Saipem, whose responsibilities and tasks are set out in the aforementioned Management System Guideline. Specifically, internal controls involve all levels of Saipem's organisation, from operations and business managers to function and administrative managers. In this organisational context, a very important figure of the internal control system is the risk owner, who carries out line monitoring activities, evaluating the design and operating effectiveness of specific and pervasive controls and producing reports on monitoring activities.
Saipem is committed to promoting and maintaining an adequate Internal Control and Risk Management System12 consisting of a set of tools, organisational structures, Company rules and regulations aimed at safeguarding the Company's assets, the efficiency and effectiveness of Company operations, the reliability of financial reporting and compliance with the laws and regulations, of the Articles of Association and Company procedures. The structure of Saipem's internal control system constitutes an integral part of the Company's organisational and management model; it involves – with different roles – administrative bodies, supervisory bodies, control bodies, the management and all personnel, and complies with the principles contained in the Code of Ethics and the Corporate Governance Code, the applicable regulations, the relevant 'CoSO Report' framework and national and international best practices.
The main industrial risks that Saipem faces and is actively monitoring and managing are as follows:
The main responsibilities of the Internal Control and Risk Management System are entrusted to Saipem bodies and organs equipped with the necessary powers, tools and structures to pursue its objectives.
Saipem is aware that adequate processes for the identification, measurement, management and monitoring of main risks contributes towards ensuring sound and proper Company management in line with the strategic objectives set out by the Board of Directors. Saipem promotes a preventive approach to risk management whereby the management's decisions and activities aim to reduce the probability of negative events occurring and their associated impact. To this end, Saipem adopts risk management strategies in accordance with the nature and type of risk, such as mainly financial and industrial risks in addition to certain strategic and operational risks associated with the specific nature of the Company's operations.
Saipem is committed to guaranteeing the integrity, transparency, fairness and efficiency of its processes through the adoption of adequate tools, rules and regulations in performing activities and exercising powers, and promotes rules of conduct inspired by the general principles of traceability and segregation of activities. Indeed, Saipem's management – also on the basis of the risks managed – established specific control activities and monitoring processes aimed at ensuring the internal control system's efficacy and efficiency over time. In line with this approach, Saipem has long been committed to favouring the development and diffusion of awareness towards internal control issues amongst all the Company's personnel. In this context, Saipem – through an appropriate internal regulation and in compliance with the provisions of the Sarbanes-Oxley Act (since it is a subsidiary of Eni, which is listed on the NYSE13) – manages the receipt (through easily-accessible information channels), analysis and processing of notifications it receives from its subsidiaries, even in confidential or anonymous form, relating to internal control issues, financial reporting, the Company's administrative responsibility, fraud or other matters (so-called whistle-blowing)14.
The internal control system is regularly verified and updated, so as to consistently guarantee its ability to monitor the main risk areas of the Company's activities, in relation to the specific nature of the Company's operational Divisions and organisational structure, and in response to possible changes within the legal and regulatory framework.
(13) New York Stock Exchange.
(11) Additional information on the Chief Financial and Compliance Officer/Manager responsible for preparing financial reports are provided under its dedicated section.
(12) The Board of Directors of Saipem SpA on January 26, 2015 updated the Guidelines of the Internal Control and Risk Management System.
(14) Saipem fully guarantees the protection of persons that report any issues in good faith, and submits the results of the preliminary investigation to the Company's management and to the relevant control and supervisory bodies.
The Board of Directors plays a key role with regard to internal control matters, as it defines the guidelines of the organisational, management and accounting structure of the Company, its main subsidiaries and the Group as a whole; in this context, after analysing the proposals of the Audit and Risk Committee, the Board determines the nature and level of risk commensurate with the Company's strategic objectives and the guidelines for the Internal Control and Risk Management System, so as to guarantee that the major risks affecting the Company and its subsidiaries are identified, measured, managed and monitored. In defining these guidelines, the Board applies the sector regulations and takes into due consideration the reference models and national/international best practices. At their Meeting of February 13, 2012, the Board of Directors confirmed its role in guiding and evaluating the adequacy of the Internal Control and Risk Management System.
Lastly, the Board assesses – on an annual basis and with the assistance of the Audit and Risk Committee – the adequacy, effectiveness and actual functionality of the Internal Control and Risk Management System as a whole, in relation to Saipem's characteristics. During the Meeting held on March 10, 2015, the Board of Directors was presented with the following reports:
The Board of Directors has noted the opinions expressed in the aforementioned reports and considered the organisational, administrative and accounting structure of the Company to be adequate.
In compliance with the provisions contained in the document 'Management System Guidelines - Internal Control and Risk Management System', the Board of Directors appointed the CEO as the officer responsible for maintaining a functional Internal Control System.
The CEO identifies the Company's main business risks, taking into account the characteristics of the activities carried out by the Issuer and its subsidiaries and periodically reporting his findings for review by the Board of Directors; implements the guidelines for the Internal Control and Risk Management System approved by the Board; and is responsible for amending this system to suit the dynamics of the operating conditions and legislative and regulatory frameworks; provides the Board of Directors with the necessary information to fulfil its responsibilities, explaining the system for the identification, monitoring and management of risks, the relevant procedures, standards and Company departments.
The CEO also has the power to request that the Internal Audit function carry out audits on specific operational areas and/or ascertain adherence to internal corporate procedures, reporting their findings to the Chairman of the Board of Directors, the Chairman of the Audit and Risk Committee and the Chairman of the Board of Statutory Auditors. The Internal Audit function also promptly informs the Board of Directors of problems and critical issues that may emerge while fulfilling its responsibilities or that it became aware of, so that the Board may take appropriate action.
The Board of Statutory Auditors, given its role of 'Committee for internal control and auditing' pursuant to Italian Legislative Decree No. 39/2010, supervises:
The Audit and Risk Committee assists the Board of Directors in fulfilling its responsibilities vis-à-vis the Internal Control and Risk Management System. Specifically, it assists in setting guidelines for the Internal Control and Risk Management System and periodically checks that it is adequate and operates effectively. The Committee oversees Internal Audit activities and reviews any problems emerging from the Internal Control and Risk Management System, with the support of the functions, departments and bodies involved in managing and/or ensuring compliance with the system itself. It also supervises activities related to the approval of periodic financial reports.
The Senior Vice President of Internal Audit, Gabriel Almandoz, was appointed by the Board of Directors, at their Meeting of May 29, 2013, at the proposal of the Audit and Risk Committee and based on the indication of the Chief Executive Officer and having consulted the Compensation and Nomination Committee and the Board of Statutory Auditors. The Board of Directors entrusted the CEO with the task of setting the remuneration of the Internal Audit Senior Vice President, in line with Company policy and at the recommendation of the Compensation and Nomination Committee. The Internal Audit Senior Vice President is responsible for overseeing that the Internal Control and Risk Management System is fully operational and effective; he is not responsible for any operative area. The Audit and Risk Committee oversees the functions of the Internal Audit department vis-à-vis the relevant Board of Directors' responsibilities, monitoring and ensuring that these are fulfilled while maintaining the necessary conditions of independence, autonomy, adequacy, effectiveness and efficiency. The Senior Vice President of Internal Audit reports to the Board of Statutory Auditors in its capacity as 'internal control and audit committee' pursuant to Article 19 of Legislative Decree No. 39/2010.
The Internal Audit Senior Vice President has the powers to enter into contracts for consultancy and professional services, having access to adequate funds (up to €750,000 per transaction for contracts with juridical persons and up to €500,000 per transaction for contracts with physical persons – with no budget restrictions).
On March 10, 2015, the Internal Audit Senior Vice President released the annual report on the Internal Control and Risk Management System (covering the period January 1-December 31, 2014, containing information up to the date of issue) and expressed his opinion on its adequacy based on the monitoring activities carried out during the reference period.
In line with the 'Standards for the Professional Practice of Internal Audit' issued by the 'Institute of Internal Auditors', the Internal Audit department is responsible for providing independent and objective activities aimed at promoting efficiency and effectiveness improving measures in the Internal Control and Risk Management System and the Company's organisation.
The Internal Audit department assists the Board of Directors, the Audit and Risk Committee and the Company's management in pursuing the objectives of the organisation through a systematic professional approach, aimed at reviewing and improving processes of control, risk management and Corporate Governance.
Main responsibilities of the Internal Audit department are: (i) ensuring independent monitoring activities provided for by the control system over financial reporting and compliance, as per Law Decree No. 231/2001; (ii) ensuring the assessment and updating of the risk map, in line with the annual risk assessment carried out by the Integrated Risk Management function, in order to plan integrated measures of audits and compliance; (iii) implementing planned and unplanned integrated audits, identifying gaps in the control system and proposing corrective measures; (iv) drawing up an integrated Audit Report and ensuring that follow-up corrective measures are properly monitored; (v) maintaining relations with the external auditors also for the purposes of managing their contract; (vi) maintaining relations and ensuring proper information flows with the Compliance Committee, the Audit and Risk Committee and the Board of Statutory Auditors; (vii) managing employee notifications and providing support in their evaluation by the relevant corporate bodies.
During the year, the Internal Audit department carried out the Audit Plan approved by the Board of Directors and reported its progress to the Audit and Risk Committee and the Board of Statutory Auditors on a quarterly basis.
The Internal Audit Senior Vice President and the Internal Audit department have full access to all data, documents and information required to carry out their duties.
Board of Directors of Saipem SpA at their Meeting of July 30, 2013 approved, with the prior opinion of the Audit and Risk Committee, the 'Integrated Risk Management Principles'. The Integrated Risk Management process (hereafter RMI) includes a systematic and structured risk prevention approach, which through the identification, assessment, management and monitoring process for major risks, contributes to supporting informed decision-making, as well as where possible, transforming the major risks into opportunities and competitive advantage for the Company. Saipem, on the basis of the principles approved by the Board of Directors, developed and implemented the Integrated Risk Management Model, which forms an integral part of the Internal Control and Risk Management System.
The Integrated Risk Management Model, developed in accordance with international principles and best practices15, is intended to provide both a comprehensive and summary vision of company risks, to ensure greater consistency in the methods and instruments used to support risk management, and to strengthen the belief at all levels that adequate assessment and management of risks of different natures can influence the achievement of Company objectives and affects its value.
The Model comprises the following elements:
Within the Risk Governance, are the following bodies:
The RMI process consists of three sub-processes:
With reference to the 'guidance for risk management ' sub-process, Saipem's Board of Directors, with the prior opinion of the Audit and Risk Committee, defines the Risk and Internal Control Management System policies so that major risks are correctly identified, as well as correctly measured, managed and monitored. Moreover, Saipem's Board of Directors, as part of its duties and management role, determines, with the prior opinion of the Audit and Risk Committee, the degree of compatibility of such risks with the strategic objectives of the Company. Accordingly, Saipem's Board of Directors examines Saipem's major risks at least every six months, as presented by the CEO, taking into account the characteristics of the Company and specific risk profile of each business area and single process, so as to implement an integrated risk Governance Policy.
The 'risk assessment & treatment' sub-process defines main risks and associated remedial actions. Depending on the strategic objectives/sub-objectives defined by the Business Area, functions/organisational units are identified that are expected to contribute significantly to their achievement of Saipem's strategic objectives/sub-objectives. Hence, using a top-down approach, the so-called 'Risk Owners' are held responsible for identifying and assessing, managing and monitoring the major risks under their responsibility, as well as any related remedial actions.
Specifically, the risk assessment activity aims at identifying and describing the main events that could affect the achievement of business objectives. It assesses risks that have been identified and provides information on which strategies and measures that need to be implemented to address them.
Finally, following the risk assessment process, the most appropriate strategies are defined on how to avoid, accept, reduce and share such risks. The sub-process 'monitoring & reporting' ensures the monitoring of major risks and the related treatment plans. It also ensures the availability of information regarding major risk management and monitoring at all Company levels.
(16) The first control level identifies, assesses, evaluates and manages risks within its remit, before identifying and implementing specific treatment measures; the second level monitors main risks to ensure their effective and efficient treatment, it also monitors the adequacy and operations of controls against main risks; the third level provides independent and objective assurance on the adequacy and effective operation of the first and second levels of control.
Specifically, monitoring of risks allows the: (i) identification of the improvement areas and critical issues for the management of major risks; (ii) analysis of these risks trend and identification of any additional treatment, also considering the adjustment and development of risk management models; (iii) timely identification and communication of new risks. Performance of the monitoring activities is documented to ensure its traceability and checking the availability of information and data obtained, as well as their repeatability.
In order to support the Company's decision-making process, periodic risk assessment findings and monitoring data are submitted to the Risk Committee, chaired by the CEO. The latter brings them to the attention of the Board of Directors, so that they may evaluate, at least once a year, the suitability and effectiveness of the Internal Control and Risk Management System based on Saipem's characteristics, risk profile and compatibility with Company objectives. As part of the IRM process, during the first half of 2014, an analysis was carried out of Saipem's major risks, as identified by the 2013 Risk Assessment; these were updated and their identification, assessment and remedial criteria reviewed. The findings of this analysis were presented to the Board of Directors on July 29, 2014. Thereafter, a second annual risk assessment cycle was launched for 2014.
The evolution of the internal/external context and Saipem's strategy formed the basis for the identification, shared by the management, of strategic lines of action and mitigation/management measures for main risks identified by the assessment. The findings of this annual risk assessment cycle were presented to the Board of Directors on January 26, 2015.
On March 22, 2004, the Board of Directors approved for the first time the 'Organisational, Management and Control Model, pursuant to Law No. 231/2001' and established a Compliance Committee. The Model constitutes a tool for the prevention of criminal liability deriving from the aforementioned Law Decree No. 231/2001.
In May 2008, the CEO began the process to align Model 231 to the new corporate organisation, which led to the Board of Directors approving the new Organisation, Management and Control Model 231/2001 on July 14, 2008.
The new Organisation, Management and Control Model denominated 'Model 231/2001' supplied with the document 'Sensitive Activities and Specific Control Standards of Model 231' encloses the Code of Ethics, which replaces the Code of Practice and is a mandatory general principle of Model 231 itself17.
Model 231 is continuously updated to implement the new legislative provisions introduced by Law Decree No. 231/2001. Specifically, the following offences were included18:
The Boards of Directors of all subsidiaries have adopted their own Organisational, Management and Control Models, containing the Code of Ethics, and also setting up their own Compliance Committee.
Furthermore, in order to improve Corporate Governance and increase efficiency in monitoring the compliance of Saipem group subsidiaries, in 2014 a new risk-based classification system was introduced, dividing companies into the following four clusters: ('A') Highly Strategic subsidiaries; ('B') Strategic subsidiaries and holdings; ('C') Other operational subsidiaries; ('D') Non-operational subsidiaries. Therefore, new rules were introduced regulating Compliance Committees' composition according to the aforementioned classification. It is noted that the Compliance Committee of Cluster 'A' companies also performs the function of the Board of Statutory Auditors.
The Compliance Committee reports on the implementation of Model 231 and/or critical issues that may have arisen and informs on the outcome of activities carried out as part of their remit. The Compliance Committee reports as follows: on an ongoing basis to the CEO, who informs the Board of Directors as part of the duty of disclosure of delegate powers; six-monthly to the Board of Directors, to the Audit and Risk Committee and to the Board of Statutory Auditors; in this case a Six-Monthly Report is produced detailing activities and audits carried out during the period, as well as new legislative provisions on matters concerning the administrative liability of legal entities.
In 2014, the Compliance Committee convened on 13 occasions to carry out its role of monitoring the effectiveness and adequacy, as well as the implementation and updating of Model 231, and its function as Guarantor of the Code of Ethics (section IV, paragraph 2.1 of the Code of Ethics). Its activities focused on:
(17) The document 'Model 231/2001 (includes the Code of Ethics)' is published on Saipem's website www.saipem.com in the 'Corporate Governance' section. (18) Please refer to note on page 4 of Model 231.
In line with the values that underpin Saipem's activities, namely its ability to conduct business ethically, with loyalty, fairness, transparency, honesty and integrity and its respect for, and compliance with the laws, the Board of Directors on February 10, 2010 approved the adoption of additional detailed internal procedures aimed at preventing the corruption of both Italian and foreign public officials, by improving the current Compliance System. Specifically, the Board adopted the 'Anti-Corruption Compliance Guideline' and associated procedures entitled 'Intermediary Agreements' and 'Joint Venture Agreements - Prevention of Illegal Activity'. These documents refer to international conventions on Anti-Corruption and are also in line with international best practices. These procedures were approved by the Board of Directors of all Saipem subsidiaries; at associated companies, Saipem's representatives on the Boards of Directors informed that these Anti-Corruption procedures had been adopted at corporate level and formally requested that the principles contained therein be adopted through similar ad-hoc procedures.
Furthermore, Saipem set up an internal Anti-Corruption Legal Support Unit to provide Saipem employees with legal support in matters of Anti-Corruption.
On April 23, 2012, following a review of internal existing regulation and the issue of new Anti-Corruption legislation, Saipem's Board of Directors approved a new procedure, the Management System Guideline 'Anti-Corruption', which annulled and replaced the 'Anti-Corruption Compliance Guideline'. The Management System Guideline 'Anti-Corruption' has been adopted by all Saipem subsidiaries through a Board of Directors' resolution.
As part of the updating process to achieve compliance vis-à-vis Anti-Corruption legislation, and following the adoption of the new Management System Guideline, the following Corporate Standards were also reviewed and updated 'Intermediary Agreements'19 and 'Joint Venture Agreements - Prevention of illegal activity'20, which detailed the various actions to be put in place during the vetting process, award and management of the aforementioned agreements.
Saipem's compliance and Corporate Governance systems in terms of Anti-Corruption regulations also provides for additional Anti-Corruption Regulatory instruments relating to areas and subjects that are particularly prone to the risk of corruption. Specifically, the following procedures were issued and/or revisited:
(19) Revision 4 issued on September 5, 2012.
(20) Revision 2 issued on July 31, 2012.
'Assigning and Managing Appointments for Notarial Services' STD-COR-CAF-001 dated November 14, 2014;
'Sustainability Stakeholders Engagement and Community Relations' - MSG-COR-SUS-001 dated November 12, 2014.
Some of these procedures are currently being reviewed in light of the principles and updates contained in the aforementioned Anti-Corruption Management System Guideline.
The legal audit of Saipem's financial statements is entrusted – pursuant to the law – to an External Audit Company registered in the Consob special registry and appointed by the Shareholders' Meeting, upon a reasoned proposal by the Board of Statutory Auditors. The current external auditors are Reconta Ernst & Young SpA, whose mandate was approved by the Shareholders' Meeting of April 26, 2010, for the financial years 2010-2018.
The financial statements of subsidiary companies are also subject to audit; these are carried out mostly by Ernst & Young.
With regard to the opinion on the consolidated financial statements, Ernst & Young is responsible for the audits carried out at subsidiary companies by other external auditors, which are immaterial in terms of consolidated assets and turnover.
The external auditors have full access to data, documents and information required to carry out their duties.
Pursuant to Article 21 of Articles of Association and Article 154-bis of Law No. 58/1998, the Board of Directors, having heard the opinion of the Board of Statutory Auditors and at the Chairman's proposal, appoints an Officer responsible for preparing the Company's financial reports, selected from individuals who have carried out the following for at least three years:
The Board of Directors ensures that the Officer responsible for preparing the Company's financial reports is granted adequate powers and has sufficient means to carry out his/her duties; the Board also ascertains that the administrative and accounting procedures are adhered to. The Officer responsible for preparing the Company's financial reports has the power to sign contracts, should he deem it necessary, for the provision of intellectual work and professional services up to the sum of €750,000 per contract, without budget restrictions.
The Board of Directors at their Meeting of December 6, 2013, having received the positive opinion of the Board of Statutory Auditors and positive assessment from the Compensation and Nomination Committee, appointed Alberto Chiarini, Saipem's Chief Financial and Compliance Officer (CFCO), as the Officer responsible for preparing the Company's financial reports, pursuant to Article 154-bis of Law No. 58/1998. The Board of Directors ascertained that Mr. Chiarini met the criteria of professional competence and good repute required by the Articles of Association, which are reviewed annually.
As stated earlier in this Report, the Board of Directors appointed the CEO as the person responsible to set up, maintain and co-ordinate an efficient internal control system, and ensure its constant adequacy and efficiency with the support of the Audit and Risk Committee and the Senior Vice President for Internal Audit. The CEO implements the guidelines approved by the Board of Directors on matters concerning the Internal Control and Risk Management System.
The CEO has the power to request that the Internal Audit department carry out audits on specific areas of operation, and ensure adherence to internal regulations and procedures involving Company transactions and operations; of this, he notifies the Chairman of the Board of Directors, the Chairman of the Audit and Risk Committee and the Chairman of the Board of Statutory Auditors; the CEO reports promptly to the Audit and Risk Committee (or the Board of Directors) any critical issues or problems that emerged during this activity or that he has become aware of, so that the Audit and Risk Committee (or the Board of Directors) may take appropriate action.
The Senior Vice President for Internal Audit and the Audit and Risk Committee, made up of three non-executive independent members of the Board of Directors, have a pivotal role in the coordination of bodies involved in the Internal Control and Risk Management System. Specifically, meetings of the Audit and Risk Committees are attended by the Chairman of the Board of Statutory Auditors, or other Statutory Auditor designated by the latter. The CEO may also attend these meetings. The Senior Vice President for Internal Audit acts as the Secretary and supports the Audit and Risk Committee in performing its duties.
To ensure that information is sent to the Committee and to allow it to carry out suitable preparatory activities and report directly to the Board of Directors:
The Committee also ensures that information is promptly shared with the Board of Statutory Auditors so that work within their respective remit can be attended to and common work can be coordinated properly.
The Committee is informed of the implementation of Reports issued pursuant to Compliance and/or Governance Models, adopted on the basis of applicable laws and regulations. It also receives: risk reports, certificates attesting to the adequacy of the Regulation System issued by the Process Owners, reviews of the HSE model, and other documents provided for by the Company's procedures, in addition to the overall evaluation of the Internal Control and Risk Management System from the Internal Audit department.
All information required by the Board of Directors to assess the Internal Control and Risk Management System is reviewed by the Audit and Risk Committee of Saipem SpA, which carries out all preparatory activities and reports directly to the Board of Directors of Saipem SpA, as part of its periodic reporting, by issuing specific opinions. All information is also shared with the Board of Statutory Auditors of Saipem SpA so that the can carry out the responsibilities afforded by law in matters of Internal Control and Risk Management System.
The Audit and Risk Committee reports to the Board of Directors, at least half-yearly, regarding the work performed and the adequacy of the Internal Control and Risk Management System.
The main duties of the Internal Audit department include the assignment of duties to and maintaining relations with the external auditors; and ensuring that information is shared with the Compliance Committee, the Audit and Risk Committee and the Board of Statutory Auditors. The Audit and Risk Committee oversees the Internal Audit department.
In order to implement Article 2391-bis of the Italian Civil Code, Consob approved a Regulation on March 12, 2010 which obliged listed companies to adopt procedures not later than December 1, 2010 aimed at guaranteeing full transparency as well as procedural and effective fairness for transactions with related parties.
Also in light of the recommendations of the Corporate Governance Code issued by Borsa Italiana SpA, on November 24, 2010, Saipem's Board of Directors unanimously approved the procedure 'Interests held by Board Directors and Statutory Auditors and transactions with related parties', effective from January 1, 2011. This procedure supersedes the procedure 'Code of Practice Regulating Operations with Related Parties' approved by the Board of Directors on July 7, 2003.
The Audit and Risk Committee, comprised wholly of independent Directors pursuant to the Corporate Governance Code and the aforementioned Regulation, has expressed a preliminary opinion in favour of the adoption of this procedure.
This largely reflects the definitions and provisions of Consob Regulation: transactions with related parties have been divided into transactions of greater importance, transactions of lesser importance, and exempted transactions, with different procedures to be followed, based on the type and relevance of transactions.
Specifically, the Board of Directors reserves the right to approve transactions of greater importance, subject to the Audit and Risk Committee being in favour, having been involved in negotiations and having received complete and timely information. The Audit and Risk Committee expresses a reasoned, albeit not binding opinion on the interest the Company may have in a transaction and the expedience and substantial fairness of its terms.
The Board of Directors, having consulted the Audit and Risk Committee, has also identified Transactions of smaller amounts, which are excluded from the procedure, as well as other types of transactions, which, due to the nature of the revenue and/or cost, are deemed to be Regular Transactions as they were completed in market-equivalent or standard terms and therefore are excluded from the procedure even if they are not of lesser amounts.
This procedure attributes a major role to independent Directors, as members of the Audit and Risk Committee and the Compensation and Nomination Committee, in matters of remuneration.
Also in terms of the duty of information to the public, Saipem's procedure reflects the provisions of Consob Regulation in full.
On March 13, 2012, the Board of Directors issued Revision 221 of the procedure by way of updating it after its first year of application and taking into account the ensuing operational requirements.
The new procedure defines timeframes, responsibilities and verification tools by the interested resources, in addition to the flows of information required for the correct application of the procedure.
(21) The procedure 'Transactions involving interests by Board Directors and Statutory Auditors and transactions with related parties' is published on Saipem's website www.saipem.com under the section 'Corporate Governance'.
A specific discipline was added for those transactions in which a Director of Statutory Auditor holds a vested interest, on their own or third party's behalf.
Specifically, it details the checks and evaluations required in the preparatory and approval stages, as well as the reasons for the transactions involving a vested interest by a Director or a Statutory Auditor, notwithstanding the requirement of a reasoned opinion issued by the Audit and Risk Committee, when a transaction requires approval by the Board of Directors.
Board Directors, Statutory Auditors, General Managers and Senior Managers with strategic responsibilities declare every six months all transactions they may have entered into involving Saipem SpA and/or its subsidiaries, either directly or through a third party, in compliance with IAS 24. They also declare potential significant relations for the purposes of the identification of related parties (for instance, close relatives).
Amounts of transactions of a commercial, financial or other nature with related parties, a description of the most relevant types of transaction, their incidence on the balance sheet, income statement and financial flows are detailed in the consolidated and statutory financial statements of Saipem SpA.
Board Directors and Statutory Auditors declare, every six months or sooner in the event of changes, any potential interests they may hold towards the Company and the Group.
In 2014, the Chairman provided periodical updates to the Board of Directors and the Board of Statutory Auditors of transactions entered into with related parties.
The Board of Statutory Auditors, pursuant to Article 149 of Law Decree No. 58/1998, monitors: compliance to the law and the Articles of Association; that management principles are correctly adhered to; the adequacy of the Company organisational structure, the internal control system and the administrative/accounting system, and the reliability of the latter to clearly reflect the Company's position; the implementation of Corporate Governance regulations contained in the Codes of Practice issued by Stock Exchange management companies and/or professional associations, which the Company has made a public declaration to adhere to; the adequacy of directions given by the Company to its subsidiaries. The Board of Statutory Auditors, in its capacity as the Committee for Internal Audit and the Audit of accounts, carries out the duties provided in Article 19 of Legislative Decree No. 39/2010. Pursuant to the latter, the Board of Statutory Auditors submits a documented proposal to the Shareholders' Meeting concerning the granting of auditing responsibilities, as well as remuneration for the external auditors, and, in case of revocation of the external auditors' mandate by the Shareholders' Meeting, must be consulted in advance. Whenever a Statutory Auditor has a vested interest, on his/her own or a third party's behalf, in a certain transaction entered into by the Issuer, they shall promptly inform the other Statutory Auditors and the Chairman of the Board of Directors detailing the nature, terms, origin and size of their interests. As part of their remit, Statutory Auditors may ask the Internal Audit department to audit specific areas of business and/or Company operations. The Board of Statutory Auditors and the Audit and Risk Committee exchange can rely on a timely and prompt exchange of information they deem relevant in the fulfilment of their duties.
The Board comprises three Statutory Auditors and two Alternate Auditors, appointed by the Shareholders on May 6, 2014. The term of office for Statutory Auditors is three years and will expire at the Shareholders' Meeting called to approve the Financial Statements at December 31, 2016.
Pursuant to Article 27 of the Articles of Association, Statutory Auditors are appointed from voting lists; one Statutory Auditor and one Alternate Auditor are appointed from the list put forward by the minority Shareholders. The filing, presentation and publication of lists are governed by Article 19 of Articles of Association and Consob regulations vis-à-vis appointments of management and control bodies, the same regulations governing the appointment of members of the Board of Directors.
Lists are structured in two sections: the first comprises candidates for the office of Statutory Auditor, the second candidates for the office of Alternate Auditor. Lists that, considering both sections, present three or more candidates for the appointment of the majority of members to the Board of Statutory Auditors, must include, in the list of Statutory Auditors, candidates of both genders in order to comply with current gender balance legislation. Should the Alternate Auditors' section feature two candidates, these will have to be of different genders.
Two Statutory Auditors and one Alternate Auditor are selected from the list which receives the majority of votes. The remaining Statutory Auditor and Alternate Auditor are selected by allocating each candidate a ratio, obtained by dividing the votes received by each list by the progressive number of Statutory Auditors still to be appointed. In the event that more than one candidate obtains the same ratio, the candidate on the list with no Auditors yet appointed or on the list with the lowest number of Auditors appointed will be elected. If these lists have yet to elect a Statutory Auditor, or if they have already appointed an equal number of Auditors, the candidate on the list with the highest number of votes will be appointed. In the case of another tie, the Shareholders' Meeting will vote again, but only amongst the candidates under ballot, and the candidate who receives the majority of votes will be elected.
The Shareholders' Meeting appoints the Chairman of the Board of Statutory Auditors from the list put forward by the minority Shareholders.
(22) The professional résumés of Statutory Auditors are published on Saipem's website www.saipem.com under the section 'Corporate Governance'.
Should the procedure for the appointment of Statutory Auditors fail to meet the requirements of regulations on gender balance, the ratio of votes is calculated for each candidate taken from the Statutory Auditors sections of the various lists, by dividing the votes received by each list by the order number of each candidate. The candidate of the most represented gender with the lowest ratio amongst candidates from all lists is replaced, by the candidate from the least represented gender with the higher order number in the same Statutory Auditors section of the list of the replaced candidate, or in the Alternate Auditors section of the same list of the replaced candidate (in this case, the latter replaces as Alternate Auditor who took his place). If by doing so the gender balance legislation is still not met, the candidate is replaced by a person appointed by the Shareholders' Meeting through a majority vote as required by law, so as to ensure that the composition of the Board of Statutory Auditors is compliant with the law and the Articles of Association. If candidates from different lists obtained the same ratio, the candidate from the list which has appointed the greater number of Statutory Auditors is replaced, or the candidate from the list that obtained the fewest votes, or, if votes are equal, the candidate who obtains the fewest votes by the Shareholders' Meeting in an ad-hoc ballot. If, for any reason, Statutory Auditors cannot be appointed by the aforementioned procedures, the Shareholders' Meeting shall see to the appointments through a majority vote as required by law, so as to ensure that the composition of the Board of Statutory Auditors is compliant with the law and the Articles of Association.
In the event of the replacement of an Auditor from the list that has received the majority of votes, the Alternate Auditor from the same list fills the vacant position; in the event of a replacement of an Auditor from other lists, the Alternate Auditor from those lists fills the vacant position. If the replacement fails to meet gender balance requirements, the Shareholders' Meeting must be called promptly to ensure compliance with this legislation.
This voting procedure from lists is only applicable whenever the entire Board of Statutory Auditors is replaced.
Pursuant to Article 144-quater, letter b) of Issuers' Regulations, lists may be presented by Shareholders who, individually or with others, hold shares amounting at least to 1% of the share capital.
Lists enclose declarations by each candidate stating that they meet the integrity and independence requirements (see Article 148, paragraph 3 of Law No. 58/1998) provided by law alongside their professional résumé.
The Shareholders' Meeting convened on May 6, 2014, appointed a new Board of Auditors comprising the Chairman Mario Busso, the Statutory Auditors Anna Gervasoni and Massimo Invernizzi and the Alternate Auditors Elisabetta Maria Corvi and Paolo Domenico Sfameni. The personal and professional résumés of Statutory Auditors are published on www.saipem.com under the section 'Corporate Governance'. On January 14, 2015 the Alternate Auditor Elisabetta Maria Corvi resigned for personal reasons.
Article 27 of the Articles of Association states that Statutory Auditors must be in possession of the requisites as per current legislation, in particular Decree No. 162/2000; in compliance with the decree, the Articles of Association provide that the following fields are pertinent to the Company's activities: commercial law, business administration and management, the engineering and geology sectors. All of Saipem's Statutory Auditors are members of the Register of Certified Auditors.
In compliance with the provision of the Corporate Governance Code aimed at ensuring that Statutory Auditors meet the independence requirements following their appointment (a similar provision applies also to Board Directors), the Board of Statutory Auditors assesses annually, through their own declarations, that all its members meet the independence requirements.
Statutory Auditors are provided in advance with documents pertaining to items to be discussed and/or resolved on at Board meetings.
For this purpose, amongst others, the Board of Statutory Auditors has a Secretary. This role is held by Simone Negri, a Saipem senior manager.
The Board of Statutory Auditors ensured the independence of the external auditors, ascertaining that they met all legal requirements and evaluating the nature and size of services other than accounting audits they provided to the Company and its subsidiaries directly, or through associated companies.
The Board of Statutory Auditors liaised closely with the Internal Audit department and the Audit and Risk Committee, attending Committee meetings and inviting the Internal Audit Senior Vice President to its own meetings.
The Chairman of the Board of Statutory Auditors attends the meetings of the Compensation and Nomination Committee.
Meetings of the Board of Statutory Auditors may be held via video or tele-conference link.
The Board of Statutory Auditors of Saipem SpA convened 27 times during 2014, with meetings lasting on average 3 hours and 57 minutes. Meetings were attended by an average of 83% of Statutory Auditors, while Board meetings were attended by an average of 86% of Statutory Auditors.
In 2015, as of the date of this report, the Board of Statutory Auditors has already met on 6 occasions.
In 2014, the Board of Statutory Auditors carried out numerous specific audit and control activities relating to the following areas of: (i) compliance with the law and the deed of incorporation; (ii) compliance with the principles of good administration; (iii) adequacy of the organisational structure, of the internal accounting system and the administrative/accounting system, as well as the reliability of the latter to provide a fair reflection of business operations; (iv) methods of implementation of Corporate Governance regulations adopted by the Company; (v) the adequacy of directions given by the Company to its subsidiaries pursuant to Article 114, paragraph 2 of Legislative Decree No. 58/1998.
Main activities carried out by the Board of Statutory Auditors in 2014 included:
review and evaluation of results of Internal Audit activities;
meetings with the Company's top financial managers, the partner of the external auditors to review the main items of the 2013 and 2014 financial statements;
Pursuant to Article 27 of the Articles of Association, Statutory Auditors may hold positions as members of administrative and control bodies at other companies; however, these are limited by Consob's Issuers' Regulations, Article 144-terdecies. In any case, pursuant to the aforementioned regulation, candidates already holding the office of Statutory Auditor at five listed companies may not be appointed as Auditors, and if elected, shall forfeit their office.
Anna Gervasoni, Massimo Invernizzi (Statutory Auditors) and Elisabetta Corvi (Alternate Auditor) have been nominated by Eni SpA, obtaining 44.22% of voting capital; Mario Busso (Chairman) and Paolo Sfameni (Alternate Auditor) had been nominated by institutional investors, obtaining 28.75% of voting capital.
Based on information received, we list hereafter the other offices (as Board Directors or Statutory Auditor) held by Saipem's Statutory Auditors in other companies.
Board Director of 'FCA Bank SpA'; Chairman of the Board of Statutory Auditors of 'ERSEL Sim SpA' and 'Tubiflex SpA'; Chairman of the College of Auditors of 'IOR - Istituto Opere Religione - Vatican'; Statutory Auditor of 'ERSEL Investimenti SpA', 'Permicro SpA' and 'Millbo SpA'; Alternate Auditor of 'Mediobanca SpA' (listed company) and 'Sicme SpA'; Legal Auditor of 'Quasar SpA' and 'Snos SpA'.
Board Director of 'Banca Generali SpA' (listed company); Independent Director of 'SOL SpA' (listed company) and 'Fondo Italiano d'Investimento SGR SpA'; Director-General of 'Associazione Italiana del Private Equity e Venture Capital (AIFI)'; Member of the College of Auditors of 'Eni Foundation'; Director of 'Centro di Ricerca sui Trasporti e le Infrastrutture (CRMT)'.
Board Director of 'Itaca Comunicazione SpA'; Chairman of the Board of Statutory Auditors of 'Cinemeccanica SpA'; Statutory Auditor 'Siani SpA' and 'Montezemolo & Partners SGR SpA'; Alternate Auditor of 'Amafin SpA', 'FF & Marula Immobiliare SpA', 'Finanziaria 2000 SpA', 'Gladstone SpA', 'Industria e Innovazione SpA' (listed company), 'Innovamedica SpA', 'Multifin SpA', 'Oui S.p.A', 'Nuova Baim Srl', 'Pamfood Srl'; Liquidatore Immobiliare di 'Pietra Srl' (in liquidation) and 'Recreo Srl' (in liquidation).
Statutory Auditor of 'Syndial SpA', 'Versalis SpA' and 'Risorse SpA'; Alternate Auditor of 'C.O.S. Società Cooperativa Sociale', 'Domina Vacanze SpA' and 'Coopolis Società Cooperativa' (in liquidation).
Board Director of 'Investitori SGR SpA' - Allianz Group, 'Allianz Bank Financial Advisors SpA' - Allianz Group, 'Italmobiliare SpA' (listed company); Statutory Auditor of 'Pirelli Tyre SpA' and 'La Fenice Srl'.
Saipem has adopted a policy of information supporting constant dialogue with institutional investors, the Shareholders and the market in order to guarantee the timely disclosure of comprehensive information on Company activities, and is limited only by the confidentiality requirements afforded to certain information. Information for investors, the market and the media is disseminated via press releases, and periodic meetings with institutional investors, the financial community and the press, in addition to the comprehensive information made available and constantly updated on the Company website.
Relations with investors and financial analysts are maintained by the Investor Relations Manager, Vincenzo Maselli Campagna, who replaced Salvatore Colli in 2014. Information of interest is posted on Saipem's website (www.saipem.com) or can be requested via email from: [email protected].
Relations with Shareholders are maintained by the Head of the Secretary's Office. Information of interest to Shareholders is posted on Saipem's website or can be requested via email from: [email protected].
The Institutional Relations and Communication department, headed by Erika Mandraffino until February 23, 2015 and then replaced by Camilla Palladino, reports directly to the CEO and is responsible for defining strategies and guidelines for external communication, developing the Company's image and maintaining relations with institutional investors at both national and international level.
Every January, Saipem discloses to the public and publishes on its website its financial calendar detailing the main financial events for the current year.
Information pertaining to periodic financial reports, relevant operations and newly-issued Corporate Governance procedures, is disclosed immediately to the public also via publication on the website www.saipem.com, where all press releases and Shareholders' notices are also posted.
Saipem's commitment to providing investors and markets with financial information that is accurate, comprehensive, transparent, timely and non-selective is stated in the Code of Ethics, which identifies the values it applies in its business operations and the relations with third parties: namely, disclosure of complete and clear information, the formal and essential legitimacy of practices by its employees at all levels, clarity and veracity of its accounting practices in compliance with current legislation and internal procedures.
On December 13, 2010, the Board of Directors approved amendments to the Articles of Association to comply with new legislation relating to Shareholders' rights (Law Decree No. 27 of January 27, 2010) and legal audit of accounts (Law Decree No. 39 of January 27, 2010). Further amendments to the Articles of Association on which the Company must express a choice were approved by the Extraordinary Shareholders' Meeting convened on May 4, 2011. At their Meeting of March 13, 2013, the Board of Directors amended the Articles of Association, specifically Articles 11, 13 and 19, to reflect the new provisions of Law Decree dated June 18, 2012 (so-called 'Corrective Decree') which in turn amended Law Decree No. 27 of January 27, 2010 (implementing EU Directive on 'Shareholders' Rights'). Please refer to the section 'The Shareholders' Meeting'.
The documentation relating to the General Shareholders' Meeting of May 6, 2014 was posted on the Company's website www.saipem.com, as well as information on the share capital and the relevant directions on how to exercise the following Shareholders' rights: the right to submit questions prior to the Meeting, adding items to the Meeting agenda, voting by proxy utilising either the appropriate section of the Company's website or delegating the designated representative, methods for the presentation of lists for the appointment of the Management Bodies. A dedicated FAQ section was also provided on the Company's website.
Questions received prior to the Shareholders' Meeting were answered during the Meeting.
The Shareholders' Meeting represents the institutional meeting point of the Company's management and its Shareholders. At these meetings, Shareholders may ask questions pertaining to items on the agenda or the Company's management at large. The information provided shall comply with the provisions applicable to inside information.
The functions of the ordinary Shareholders' Meeting are regulated by Article 2364 of the Italian Civil Code, with the exception of those matters for which the Board of Directors is responsible in accordance with Article 20 of the Articles of Association.
The Shareholders' Meeting of January 30, 2001 approved the Shareholders' Meetings regulations (posted on Saipem's website www.saipem.com) to ensure smooth and effective meetings proceedings and, specifically, to safeguard every Shareholder's right to intervene on items under discussion.
The Extraordinary Shareholders' Meeting of April 30, 2007 had approved the amendments to the Company's Articles of Association in order to comply with the provisions of Law No. 262/2005 on protection of investors and had granted the Board of Directors the power to approve amendments to the Articles of Association if required by law.
On December 13, 2010, the Board of Directors approved amendments to the Articles of Association in compliance with the provisions of law in terms of Shareholders' rights (Law Decree No. 27 of January 27, 2010). At the proposal of the Board of Directors dated March 8, 2011, the Extraordinary Shareholders' Meeting, on May 4, 2011, also approved amendments to the Articles of Association of a non-normative nature, which, pursuant to Law Decree No. 27 of January 27, 2010 ('Shareholders' Rights'), are at the Company's discretion.
Specifically, these provide that the Annual General Meeting be called through publication on the Company's website in addition to all other methods set forth in Consob Regulations and in compliance with the law and current legislation.
The legitimate attendance at Shareholders' meetings and the exercise of voting rights is confirmed by a statement to the Company from the accredited intermediary in compliance with his/her accounting records, on behalf of the Shareholder entitled to vote.
This statement is based on the intermediary accounting records registered at the end of the seventh trading day prior to the date of the Shareholders' Meeting on first call. Credit and debit records after this deadline shall not be considered for the purpose of legitimising the exercise of voting rights at the Shareholders' Meeting. Statements issued by the intermediaries must reach the Company by the end of the third trading day prior to the Shareholders' Meeting on first call.
Shareholders who, solely or jointly, represent at least one fortieth of the share capital may request, within ten days from publication of the calling of the Shareholders' Meeting, detailing items they wish to be added to the meeting agenda.
Shareholders entitled to vote may delegate others to represent them at the Shareholders' Meeting pursuant to the law. To do so, they must present a request either in writing or electronically. The electronic proxy can be filled in on Saipem's website and sent via certified e-mail, under the terms advised in the notice of Shareholders' Meeting and in compliance with current legislation and regulations. Pursuant to Article 135-undecies of Law No. 59/1998, for the 2014 General Shareholders' Meeting, the Company appointed Mr. Dario Trevisan as Shareholders' Representative, whom the Shareholders may confer a proxy free of charge with voting instructions on one or more proposals on the agenda. At the proposal of the Board of Directors of March 13, 2012, the Extraordinary Shareholders' Meeting of April 27, 2012 approved amendments to the Company's Articles of Association required to comply with new regulations aimed at promoting gender balance in Boards of Directors and Control Bodies of listed companies (Law No. 120 of July 12, 2011, and Consob Regulation No. 18098 of February 8, 2012). These amendments meant that Articles 19 and 27 were modified and a new Article 31 added.
At their Meeting of March 13, 2013, the Board of Directors amended the Articles of Association, specifically Articles 11, 13 and 19, to reflect the new provisions of Law Decree dated June 18, 2012 (so-called 'Corrective Decree') which in turn amended Law Decree No. 27 of January 27, 2010 (implementing EU Directive on 'Shareholders' Rights'). Now Shareholders representing at least one fortieth of the share capital may submit resolution proposals on items already on the General Shareholders' Meeting agenda, under the same terms and deadlines currently used for presenting additions to the meeting agenda (Article 126-bis of Law No. 58/1998). These amendments are of a purely normative nature and can be approved by the Board of Directors pursuant to Article 20 of the Articles of Association and Article 2365, paragraph 2, of the Italian Civil Code.
At the Shareholders' Meeting called to approve the financial statements, the Board of Directors reports on activities that occurred during the year, both through reports in the financial statements, made public prior to the Meeting through methods as provided by the law and current regulations, and by answering questions and requests for clarification posed by the Shareholders.
At the Shareholders' Meeting, votes are cast using remote controls, which facilitate the Shareholders in exercising their rights and ensure that the voting results are immediately available.
The General Shareholders' Meeting of May 6, 2014 was attended by the Chairman Alberto Meomartini, the CEO Umberto Vergine, the Deputy CEO Hugh James O'Donnell, and the Director Gabriele Galateri di Genola.
The Director Gabriele Galateri di Genola, in his capacity as Chairman of the Compensation and Nomination Committee, illustrated to the Shareholders present the methods used by the Committee to exercise its functions.
With regard to the share performance, please refer to the paragraph 'Saipem SpA share performance' in Saipem's Annual Report.
In 2014, with a view to ensuring continuous improvement, Saipem continued the programme, launched in 2013, of measures aimed at strengthening its Internal Control and Risk Management System. Main objectives were:
The most important initiatives launched and implemented since 2013 include:
setting up a Technical Committee responsible for ensuring that, within Saipem's regulatory system, all Compliance and Governance issues are properly addressed;
setting up the Risk Committee, advising the CEO on management of main risks;
On March 10, 2015, the Company appointed Mr. Luigi Siri as Senior Vice President of Internal Audit, replacing Gabriel Almandoz.
| Shareholding structure at December 31, 2014 | ||||
|---|---|---|---|---|
| Number of shares |
% of share capital |
Listed Market / not listed | Rights and obligations | |
| Ordinary shares | 441,301,574 | 99.98% | Computerized Share Trading Market (Mercato Telematico Azionario Italia - MTA) |
Dividend / entitled to vote at the Shareholders' Meeting |
| Shares with limited vote entitlement (savings shares) |
109,326 | 0.02% | Computerized Share Trading Market (Mercato Telematico Azionario Italia - MTA) |
Convertible with ordinary share without time restriction / dividend 3% higher than ordinary shares / dividend 5% higher than ordinary shares if profits were recorded / not entitled to vote at the Shareholders' Meeting |
| Shares without vote entitlement |
| Relevant shareholdings | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Declarant | Direct Shareholder | % of ordinary capital | % of voting capital | |||||||
| People's Bank of China | People's Bank of China | 2.027 | 2.027 | |||||||
| Dodge & Cox | Dodge & Cox | 5.045 | 5.045 | |||||||
| Italian Ministry of Economy and Finance | Eni SpA | 42.913 | 42.913 |
| Board of Directors | Audit and Risk Committee |
Compensation and Nomination Committee |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Office | Members | Year of birth |
First appointment (1) |
In office since |
In office (M/m) until |
List (2) |
Exec. | Non- exec. |
Indep. purs to CG Code |
Indep. to L. 58/98 |
No. purs of other offices (3) |
(4) | (4) | (5) | (4) | (5) |
| Chairman | Meomartini Alberto |
1947 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
M | X | - | 5/5 | |||||||
| Deputy Chairman |
Marchetti Piergaetano |
1939 | 2013 | 30.07.13 | Approval of Fin. Stat. 2013 |
M | X | X | X | - | 4/5 | |||||
| CEO •◊ | Vergine Umberto |
1957 | 2010 | 04.05.11 | Approval of Fin. Stat. 2013 |
M | X | - | 5/5 | |||||||
| Director | Barbieri Fabrizio |
1959 | 2013 | 30.04.13 | Approval of Fin. Stat. 2013 |
M | X | - | 5/5 | |||||||
| Director | Galateri di Genola Gabriele |
1947 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
M | X | X | X | 4 | 4/5 | 4/4 | C | |||
| Director | Greco Nicola |
1949 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
M | X | X | X | 1 | 4/5 | 4/4 | M | |||
| Director | Montagnese Maurizio |
1956 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
m | X | X | X | - | 3/5 | 5/5 | M | 4/4 | M | |
| Director | Sacchetto Mauro |
1959 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
m | X | X | X | - | 4/5 | 5/5 | P | |||
| Director | Volpi Michele |
1964 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
m | X | X | X | 1 | 2/5 | 0/5 | M | |||
| Directors terminated during the year | ||||||||||||||||
| Director | ||||||||||||||||
| Number of meetings held during the year: | BoD: 5 | ARC: 5 | CNC: 4 |
Minimum quorum required for the presentation of lists by minority shareholders for election of one or more members (pursuant to Article 147-ter of Law No. 58/1998): 1%
• The Officer responsible for the Internal Control and Risk Management System.
◊ The Officer mainly responsible for the management of the Issuer, i.e. the Chief Executive Officer (CEO).
º Lead Independent Director (LID).
(1) The first year in which a Director has ever been appointed in the Board of the Issuer.
(2) 'M' denotes the list from which a member has been appointed ('M': majority list; 'm': minority list).
(3) Other Directorships or Auditorships held by a Director in other companies listed either in Italy or abroad, and/or in financial, banking, insurance or large companies. Full details of these additional offices are provided inside this Report.
(4) Participation to meetings of the Board or a Committee (out of the total number of meetings held).
(5) The office of a Director in a Committee: 'C': chairman; 'M': member.
| Table 2B. Structure of the Board of Directors and its Committees (from May 6, |
2014) |
|---|---|
| ---------------------------------------------------------------------------------- | ------- |
| Board of Directors | Audit and Risk Committee |
Compensation and Nomination Committee |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Office | Members | Year of birth |
First appointment (1) |
In office since |
In office (M/m) until |
List (2) |
Exec. | Non- exec. |
Indep. purs to CG Code |
Indep. to L. 58/98 |
No. purs of other offices (3) |
(4) | (4) | (5) | (4) | (5) |
| Chairman | Carbonetti Francesco |
1941 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
M | X | X | X | - | 9/9 | |||||
| CEO •◊ | Vergine Umberto |
1957 | 2010 | 06.05.14 | Approval of Fin. Stat. 2014 |
M | X | - | 9/9 | |||||||
| Director | Bifulco Rosario |
1954 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
M | X | X | X | 2 | 9/9 | 3/3 | C | |||
| Director | Ciuccarelli Nella |
1969 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
M | X | X | X | - | 9/9 | 3/3 | M | |||
| Director | Ferro-Luzzi Federico |
1968 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
m | X | X | X | - | 8/9 | 3/3 | M | |||
| Director | Gattei Francesco |
1969 | 2014 | 23.09.14 | Approval of Fin. Stat. 2014 |
Co-op. (6) |
X | - | 3/3 | |||||||
| Director | Guzzetti Guido |
1955 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
m | X | X | X | 1 | 9/9 | 10/10 | M | |||
| Director | Laghi Enrico |
1969 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
M | X | X | X | 4 | 7/9 | 10/10 | P | |||
| Director | Picchi Nicla |
1960 | 2014 | 06.05.14 | Approval of Fin. Stat. 2014 |
m | X | X | X | 2 | 9/9 | 10/10 | M | |||
| Directors terminated during the year | ||||||||||||||||
| Director | Barbieri Fabrizio |
1959 | 2013 | 06.05.14 | 06.08.14 | M | X | - | 5/6 | |||||||
| Number of meetings held during the year: | BoD: 9 | ARC: 9 | CNC: 3 |
Minimum quorum required for the presentation of lists by minority shareholders for election of one or more members (pursuant to Article 147-ter of Law No. 58/1998): 1%
• The Officer responsible for the Internal Control and Risk Management System.
◊ The Officer mainly responsible for the management of the Issuer, i.e. the Chief Executive Officer (CEO).
º Lead Independent Director (LID).
(1) The first year in which a Director has ever been appointed in the Board of the Issuer.
(2) 'M' denotes the list from which a member has been appointed ('M': majority list; 'm': minority list).
(3) Other Directorships or Auditorships held by a Director in other companies listed either in Italy or abroad, and/or in financial, banking, insurance or large companies. Full details of these additional offices are provided inside this Report.
(4) Participation to meetings of the Board or a Committee (out of the total number of meetings held).
(5) The office of a Director in a Committee: 'C': chairman; 'M': member.
(6) Co-opted replacing Fabrizio Barbieri, appointed from the Majority list (M).
| Office | Members | Year of birth |
First appointment (1) |
In office since |
In office until |
List (M/m) (2) |
Indep. purs to CG Code |
Attendance to meetings of the Board of Statutory Auditors (3) |
No. of other offices (4) |
|---|---|---|---|---|---|---|---|---|---|
| Chairman | Busso Mario | 1951 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
m | X | 14/14 | 1 |
| Statutory Auditor | Gervasoni Anna | 1961 | 2012 | 27.04.12 | Approval of Fin. Stat. 2013 |
M | X | 9/14 | 2 |
| Statutory Auditor | Propersi Adriano | 1947 | 2008 | 04.05.11 | Approval of Fin. Stat. 2013 |
M | X | 11/14 | 1 |
| Alternate Auditor | Gamba Giulio | 1942 | 2005 | 27.04.12 | Approval of Fin. Stat. 2013 |
M | X | - | - |
| Alternate Auditor | Sfameni Paolo | 1965 | 2011 | 04.05.11 | Approval of Fin. Stat. 2013 |
m | X | - | 1 |
| Statutory auditors terminated during the year |
Minimum quorum required for the presentation of lists by minority shareholders for election of one or more members (pursuant to Article 148 of Law No. 58/1998): 1%
(1) The first year in which a Statutory Auditor has ever been appointed in the Board of Statutory Auditors of the Issuer.
(2) 'M' denotes the list from which a member has been appointed ('M': majority list; 'm': minority list).
(3) Statutory Auditors' attendance to meetings of the Board of Statutory Auditors (attendance/number of meetings held during the period of office).
(4) Other Directorships or Auditorships held by a Statutory Auditor pursuant to Article 148-bis of Law No. 58/1998 and the regulations included in Consob's Issuer Regulations. Full details of these additional offices are provided by Consob on their website pursuant to Article 144-quinquiesdecies of Consob's Issuer Regulations.
| Board of Statutory Auditors | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Office | Members | Year of birth |
First appointment (1) |
In office since |
In office until |
List (M/m) (2) |
Indep. purs to CG Code |
Attendance to meetings of the Board of Statutory Auditors (3) |
No. of other offices (4) |
| Chairman | Busso Mario | 1951 | 2011 | 06.05.14 | Approval of Fin. Stat. 2016 |
m | X | 13/13 | 1 |
| Statutory Auditor | Gervasoni Anna | 1961 | 2012 | 06.05.14 | Approval of Fin. Stat. 2016 |
M | X | 7/13 | 2 |
| Statutory Auditor | Invernizzi Massimo | 1960 | 2014 | 06.05.14 | Approval of Fin. Stat. 2016 |
M | X | 12/12 | 1 |
| Alternate Auditor | Corvi Elisabetta Maria |
1957 | 2014 | 06.05.14 | Approval of Fin. Stat. 2016 |
M | X | - | - |
| Alternate Auditor | Sfameni Paolo | 1965 | 2011 | 06.05.14 | Approval of Fin. Stat. 2016 |
m | X | - | 1 |
| Statutory auditors terminated during the year |
Minimum quorum required for the presentation of lists by minority shareholders for election of one or more members (pursuant to Article 148 of Law No. 58/1998): 1%
(1) The first year in which a Statutory Auditor has ever been appointed in the Board of Statutory Auditors of the Issuer.
(2) 'M' denotes the list from which a member has been appointed ('M': majority list; 'm': minority list).
(3) Statutory Auditors' attendance to meetings of the Board of Statutory Auditors (attendance/number of meetings held during the period of office).
(4) Other Directorships or Auditorships held by a Statutory Auditor pursuant to Article 148-bis of Law No. 58/1998 and the regulations included in Consob's Issuer Regulations. Full details of these additional offices are provided by Consob on their website pursuant to Article 144-quinquiesdecies of Consob's Issuer Regulations.
Headquarters: San Donato Milanese (Milan) - Italy Via Martiri di Cefalonia, 67 Branches: Cortemaggiore (Piacenza) - Italy Via Enrico Mattei, 20
saipem Società per Azioni Share Capital €441,410,900 fully paid up Tax identification number and Milan Companies' Register No. 00825790157
Information for Shareholders Saipem SpA, Via Martiri di Cefalonia, 67 - 20097 San Donato Milanese (Milan) - Italy
Relations with institutional investors and financial analysts Fax +39-0252054295 e-mail: [email protected]
Publications Relazione finanziaria annuale (in Italian) Annual Report (in English)
Interim Consolidated Report as of June 30 (in Italian and English)
Saipem Sustainability (in English)
Also available on Saipem's website: www.saipem.com
Website: www.saipem.com Operator: +39-025201
Design: Gruppo Korus Srl - Rome - Italy Cover: Inarea Layout and supervision: Studio Joly Srl - Rome - Italy Printing: STILGRAF - Viadana (Mantova) - Italy
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