CHART N.6 - ACEA S.P.A. ORGANISATIONAL CHART AS OF 31.12.2013
Acea adopts a governance pattern complying with provisions contained in the Corporate Governance Code (Corporate Governance principles applicable to Italian Listed companies) conforming to the principles of transparency, balance and separation among policy, management and control activities.
Acea SpA Board of Directors defines the strategic policies of the Group and is responsible for the management thereof. Within the holding Company, two Committees (Control and Risks and Appointments and Remuneration) have been established to hold proposal and advisory functions which interact with top management. The Board of Statutory Auditors is responsible for supervisory activities.
THE MAIN STAGES OF ACEA GROUP CORPORATE GOVERNANCE
- The document related to Corporate governance is approved and lays the foundations for the progressive application of the Corporate Governance Code.
- Establishment and running of Internal Audit Committee and Remuneration Committee
- Establishment of Investor Relations Function
- Adoption of Regulations of Annual Shareholders’ Meetings
- Adoption of Charter of Values (2001) and of Code of Conduct on Internal Dealing (2002)
- Approval of Code of Ethics for Tenders (2003) and of Code of Ethics (2004), establishment of Ethics Committee
- Entrustment to the President of the Control and monitoring function of the Group’s social and environmental performances (2003) and establishment of the Risk control Unit and Customer Care Unit (2005)
- Adoption of the first Organisation, management and control models in compliance with Legislative Decree n. 231/2001 and establishment of the Supervisory Board starting from the Holding (2004) and embracing, consequently, all main companies operating in the water, network and energy sectors
- Adoption of Guidelines for collection and dissemination of personal data, in accordance with Legislative decree n. 196/03, in the framework of data privacy (2005)
- Implementation of “Internal Rules System” (group policies, processes of strategic governance, procedures for handling shareholdings, operating processes and functioning processes) (2005)
- Adoption of the new version of the Corporate Governance Code (Borsa Italiana) (2006)
- Alignment of the Articles of Association to the regulation provided by the Law 262/05 (2006)
- New Regulations for internal management and outside disclosure of corporate documents and information and new regulations on Internal Dealing (2006)
- Adoption of a Procedure for a decision-making process of transactions with related parties consistent with the principles of accuracy and transparency (2008)
- Review of the Internal Control System (ICS) and approval of its Guidelines (2010)
- Adoption of new regulations on composition and functioning of Committees (2010)
- Approval of a new procedure on transactions with related parties and establishment of Committee for Transactions with Related Parties (TRP) (2010, into effect from 1.1.2011)
- Adjustment of Articles of Association to latest legislative provisions (Law 34/08, Legislative Decree n. 27/10) with regard to the methods for selecting and electing the corporate bodies and to the participation in the Annual Shareholders’ meetings (2010)
- Introduction of the position of General manager
- Winding-up of the joint venture between Acea SpA and GdF Suez Energia Italia SpA, terminated on 31st March 2011
- Composition of the Ethics Committee by the designation of two external members completed. The Ethics Committee, in the meeting held on 21st November 2011, approved the CSR and reporting developing lines, to which the publication of the Sustainability Report and the Financial Statements have been aligned, respecting the wishes of the highest governance bodies
- Introduction and adjustment, also for the previous years, of Organisation, management and control models, in compliance with Legislative Decree n. 231/2001, within several companies of the Group, in order to meet the organisational changes and the extension of contemplated violations, introduced by the Legislative Decree. n. 121
- Approval of the new Code of Ethics, in which all previous Acea codes of conduct and values (Charter of Values, Code of Ethics and Code of Ethics for Tenders) have been integrated with procedures for presumed violations of the Code
- Adjustment of the Internal Dealing procedure
- Designation of the new Manager Appointed to draw Corporate Accounting Documents
- Adoption of the new version of Corporate Governance Code (Borsa Italiana 2011) and pursuant governance upgrades
- Up-to-date of Organisation, management and control models, in compliance with the Legislative decree. n. 231/2001, in all Acea SpA’s subsidiaries with regard to environmental violations
- The Group executive provision for antitrust compliance has been approved
- Establishment of the Operating Risk Committee within the Energy Area, to control and monitor risks linked to commodities Management
- Adjustment of Acea SpA Articles of Association to the rule provided by the Law 120/2011, with regard to gender equity in administration and control bodies of listed-companies
- Renewal of the highest governance bodies
- Adoption of the regulations concerning the composition and functioning of Internal Committee of the BoD
- Review of Acea SpA organisational macro-structure
- Reconsideration and upgrade of the Transactions with Related Parties procedure
- Establishment of the new corporate Executive Committees
- Up-to-date of Organisation, management and control model of Acea SpA, in compliance with Legislative Decree n. 231/2001, with regard to violations of: non-European citizens with irregular residence permit for labour, malfeasance in public office, and private sector corruption. The new Supervisory Board of the holding company has been appointed, thus coinciding with the relevant Board of Statutory Auditors.
Management of the company is assigned to the Board of Directors (BoD), whose composition varies from 5 to 9 members, pursuant to the decision made at the Shareholders’ Meeting. Members of the BoD can be re-elected and their mandate lasts for three years. The election process adopted (criteria of ratios on the votes obtained from the minority lists) guarantees: gender progressive balance, the appointment of an adequate number of Directors representing minorities and a number of Independent Directors provided by Law16.
The Board in office, appointed during the Shareholders’ meeting held on 15th April 2013, is made up of nine members (see specific box, where additional offices covered by the members of the Board within the Internal Committees are also indicated); members of the Board of Directors met 12 times over the year.
The President and the CEO are the only executive Counsellors while the remaining seven are directors without any managerial power.
The Report on corporate governance and the structure of ownership, available online on the official website (www.acea.it), provides detailed information on Acea SpA’s Directors: curricula, independence requirements, attendance at the Board and Committees they are part of, and additional offices held in other companies. Remuneration of the members of the BoD is set by the Shareholders’ meeting while additional compensation for those who are also members of the Committees, is established by the Board itself upon the Appointment and Remuneration Committee’s proposal, after consulting the Board of Statutory Auditors.
Remuneration of Directors are illustrated in a specific table attached to the 2013 Consolidated Financial Statements17.
|Paolo Gallo||(Chief Executive Officer)|
|Maurizio Leo||(President of the Control and Risk Committee and member of the Appointment and Remuneration Committee)|
|Andrea Peruzy||(President of the Ethics Committee; Member of the Control and Risk Committee and member of the Appointment and Remuneration Committee)|
|Antonella Illuminati||(Member of the Control and Risk Committee, of the Appointment and Remuneration Committee and the Ethics Committee)|
|Paolo Di Benedetto||(President of the Appointment and Remuneration Committee and member of the Control and Risk Committee)|
|Giovanni Glani||(Member of the Control and Risk Committee and the Appointment and Remuneration Committee)|
|Francesco Caltagirone||(Member of the Ethics Committee)|
ROLES AND POWERS OF THE BOARD OF DIRECTORS WITHIN ACEA
Among the powers assigned to the Board of Directors by Law, the Articles of Association and in compliance with the recommendations provided in the Corporate Governance Code, are:
- definition of general and strategic approaches as well as the company developing lines; coordination of economic and financial operations of the Group through the approval of strategic plans, including financial plans, investment plans and annual budgets;
- definition of the entity and size of risk compatible with the strategic goals of the company;
- approval and amendment of internal regulations with regard to the general organisational structure of the company;
- establishment of Committees required by the Corporate Governance Code and the appointment of their members;
- adoption of Organisation, management and control models, in compliance with Legislative Decree n. 231/01;
- assessment of the organisational, administrative and accounting structure of Acea and its subsidiaries having strategic relevance;
- interaction with the shareholders and promotion of activities aimed at encouraging their participation and effortless exercise of their rights;
- establishment of audits on the protection of personal data or third party’s sensitive data, integrated with an annual report of a program document on security (Legislative Decree 196/03);
- adoption of all necessary procedures to protect the health of workers and the appointment of subjects entrusted with the control of safety in the workplace (Legislative Decree 81/08).
16 Pursuant art. 147 ter., c. 4, of Legislative Decree 58/98, c.d. Testo Unico della Finanza (TUF), the minimum number of Independent Directors shall be equal to 1 for BoD composed of up to 7 members, and equal to 2 for BoD composed of more than 7 members. During the year 2013, the BoD verified if its Directors had provided conditions in order to be qualified as independent: on 31.12.2013, 5 Directors out of 9 were verified as independent.
17 Published each year in the institutional web site, section Shareholders.
FUNCTIONS OF THE PRESIDENT AND THE CHIEF EXECUTIVE OFFICER
The President, apart from having the faculty of summoning and chairing the Board and the Shareholders’ meeting, is the company’s legal representative and legal authority. He is entrusted with: supervision of the Group’s activities and control of the implementation of the resolutions issued by the Board and the corporate governance regulations; control of activities and company’s processes with regard to the quality delivered and perceived, the environmental impacts and the corporate social responsibility; supervision of the company secretariats both of the Holding company and its subsidiaries.
The Chief Executive Officer is entrusted with ordinary company management, legal authority, the company’s legal and procedural representation and is entitled to all further powers in accordance with the restrictions provided by Law and the Articles of Association.
He acts according to long-term plans and annual budgets approved by the Board and assures and controls the accordance with management guidelines, making organisational and procedural variations to the holding company’s operations, in compliance with the guidelines approved by the BoD. In addition, he chairs the Management Committee, an advisory body entitled to assess the economic management context of the Group and single business and further slippage or departure from the targets fixed. Furthermore he guarantees the proper handling of company information. The current C.E.O. also functions as the General Manager.
The President and the Chief Executive Officer report, at least every three months, to the BoD and the Board of Statutory Auditors, with regard to the general management trend and development expected.The President and C.E.O. can jointly adopt, if necessary, acts pertaining to the BoD with regard to tenders, purchases, calls for tenders, issues of bank guarantees and designation of members of BoD and Board of Statutory Auditors of the main subsidiaries and investee companies, if in case of emergency summoning
An ordinary or extraordinary Shareholders’ Meeting can be summoned by the Board of Directors, and upon the shareholders’ request, if said shareholders represent at least 5% of share capital; furthermore, in compliance with the terms provided by the rules, the shareholders, representing at least 2.5% of share capital can request additional matters to discuss, integrating further topics or can request the resolution of matters on the agenda. Furthermore, additional computerised methods of interaction exist, such as the electronic notification of shareholders’ representative proxy during the Meeting and publication on the website of the summons notice.
In conclusion, before the date fixed for the Meeting, the shareholders can question matters on the agenda, through registered letters or via email. There are no shares with limited rights of vote or devoid of the right thereof18.
The Articles of Association, exclusive of the shareholder Roma Capitale, requires a limitation of the right to vote on shares exceeding 8% of the share capital. No shareholders’ agreements nor special rights of veto or further decision-affecting factors exist, beyond the exclusive right held by the shareholding.
REVIEW OF THE PROCEDURE ON TRANSACTIONS WITH RELATED PARTIES
In December 2013, Acea’s BoD, as required by CONSOB regulations, submitted and modified the procedures on Transactions with related Parties to a three-year assessment. This procedure ensures transparency and accuracy of transactions of resources, services or bonds taking place among Acea – or its subsidiaries – and the natural or legal subjects defined as related, pursuant to the criteria provided in the regulations (i.e., subjects controlling Acea or controlled by Acea, joint ventures, managers with steering responsibilities, etc.). In particular, the application of such procedures has been extended to natural and legal subjects holding, at any title, 5% of Acea share capital. Furthermore, economic thresholds for small transactions have been increased, for which, consistent with further requirements, the procedure finds no application. Further cases of procedure exclusion are transactions related to the execution of legal proceedings or other public authorities. The new procedure will come into force in 2014.
ESTABLISHMENT OF NEW COMPANY COMMITTEES
In 2013, with the purpose of improving company integration mechanisms and the decision-making processes, by the optimisation of operating and cooperating capacities among the company Functions, some new Committees, within the holding, entrusted with technical and advisory powers, have been established, providing the participation of the Industrial Areas and Functions of Acea SpA. The Committees, all headed by Acea SpA’s Chief Executive Officer, are:
- the Steering Committee, that guarantees the monitoring of paramount projects, the implementation of business decisions and changes in functioning models, identifying, as well, the corrective and improving actions of operating management;
- the Management Committee, that shares the actions detected by the Steering Committee and suggests possible actions to solve crossfunctional and inter-company problems;
- the Business Review Committee, identifies the corrective and improving actions of social and economic results as well as capital results;
- the Regulatory Steering, analyses regulatory matters impacting on Acea business and identifies the corrective and improving actions.
18 With the exception of 416,993 shares owned (corresponding to approximately 0.2% of total shares) for which the right to vote is suspended in accordance with art. 2357-ter of the Civil Code. See also the Report on corporate governance and the structure of ownership
The Acea Internal Control and risk management system (ICRMS), a core element in the corporate governance structure, is a set of rules, policies, procedures and organisational structures, aimed at:
- identifying potential events which could positively affect (opportunities) or negatively affect (risks) the achievement of the goals set by the Board of Directors;
- encouraging the execution of decisions using awareness principles and the contribution to company management consistent with the company’s objectives;
- contributing and ensuring the protection of the business’ assets, efficacy and efficiency of its processes, reliability of financial information and compliance with the laws, regulations, Articles of Association and internal procedures.
This system embraces the entire company structure, involving, regardless of the title, the following subjects:
- the Board of Directors (BoD), whose primary objective is the protection of company interests and the generation of value for the shareholders in the medium-long term, by the promotion of actions oriented to the implementation of the provisions issued by law, the Articles of Association, the Corporate Governance Code, as well the principles contained in the Code of Ethics of the Group. The BoD determines, in cooperation with the Control and Risk Committee, the approaches of ICRMS, in order to detect, evaluate and handle the main risks for Acea SpA and its subsidiaries. The BoD is invested with the appointment and revocation of the members of the Committees and the subjects operating in the system: the Director, entrusted with the supervision of ICRMS, the Audit Function Manager and the Manager Appointed to draw the Corporate Accounting Documents;
- the Control and Risk Committee, performs proposal and advisory functions against the Board of Directors pursuant to the tasks defined by the Corporate Governance Code. In 2013, the Committee has met eight times;
- the Appointment and Remuneration Committee, performs proposal and advisory functions towards the Board of Directors with regard to the remuneration of directors and managers fulfilling strategic functions and to the size and composition of the BoD itself, with particular attention to those professional positions, whose presence is deemed fundamental. During the year, the Committee has met four times;
- the Board of Statutory Auditors, which, by the powers and obligations provided by the law in force, performs audit functions on the compliance with existing laws, on the administration accuracy and effective implementation of the Corporate Governance Code. The shareholders’ meeting appoints the President, while Statutory Auditors are elected from minor shareholders;
- the Chief Executive Officer, who corresponds to the Director entrusted with the supervision of ICRMS, allows the implementation of the System approaches provided by the BoD and defines, through the Audit Function, the main risks of the company and periodically reports to the BoD;
- the Manager Appointed to draw the Corporate Accounting Documents, is entitled to establish and maintain the Internal Control System on Financial Disclosure and to release relevant statements, jointly with the Chief Executive Officer
- the Supervisory Board (SB), has full rights of initiative and action, with regard to the functioning and effectiveness of the Organisation, management and control Model, adopted pursuant to Legislative Decree n. 231/01, with the purpose of preventing the risks of offences from which the administrative responsibility of the company shall be deemed liable for. The Supervisory Board of the holding company and subsidiaries monitors all those paramount operations which may be at risk of offence - ex Legislative Decree n. 231/01 - including environmental crimes, crime against workers’ safety and corruption, by means of systematically sharing information, transmitted by the companies’ structures, supplemented by risk indicators. With regard to the operations at risk of offence, the SB provides an annual plan of controls; it can also require specific controls in terms of the periodic information received;
- the Ethics Committee19 entrusted with the promotion of the Code of ethics within the Group – carried out through an online training plan dedicated to the employees (see chapter Human Resources, paragraph Enhancement of Human Resources and Communication) – also controls its implementation and defines the functional procedures on the conformity to the principles contained. During the year the Committee held two meetings;
- the Audit Function, performs, in compliance with the standards of the sector, independent assessments – regularly or according to specific needs – on the System efficiency and suitability, by means of an Audit Plan approved by the BoD, which monitors the action plans issued after verification. The Function, that reports to the BoD and does not perform any operational business, is entitled to make verifications concerning the crimes provided in the Legislative Decree n. 231/01. In the framework of assessments required by the Supervisory Board, referring to the effective implementation of the Organisation, management and control Model, in 2013 audit activities have been carried out on the company’s litigation management process, since potentially conducive to the crime of corruption. The person responsible for the Audit Function, in conclusion, supports the Director Appointed to detect the main risks for Acea SpA and its subsidiaries and the implementation of the approaches of ICRMS, also by a functional connection with second-level auditing structures;
- the Risk Control and internal control Unit, within the Audit Function, have the task, among others, of defining, implementing and handling processes and means useful in detecting and assessing risk, raising the awareness within the Group, of those factors that can potentially jeopardise the achievement of the company’s goals and providing assistance to the management of the identification of possible corrective actions;
- all Managers and Employees, are responsible, each for his/ her pertaining field, of necessary interventions to ensure the efficient functioning of the Internal Control and Risk Management System.
19 In accordance with the regulations in force, the members of the Ethics Committee are 5, of which two are appointed externally. At the end of the year, dott. Ivanhoe Lo Bello and Attorney Francesca Rosetti have been appointed as external members.
Risk management is therefore a cross process, providing widespread responsibilities and the involvement of the company at all levels, it helps to assess the risk exposure and to identify the functional tools aimed at preventing, mitigating – through procedures or management systems – or transferring – by insurance coverage for example – the unacceptable risks.
The audit units are developed with operations at the base and created to guarantee their proper execution (first level). Gradually, further actions are undertaken, aimed at verifying the adequacy and efficiency of first-level controls (second level), by the person responsible for the organisational Units where the risk has been detected, and by the holding company’s other structures, reporting on their operations to the Director Appointed to ICRMS and to the Audit Function. In conclusion, this Function intervenes with a last control (third level) to verify the overall pattern and functioning of the system and to monitor necessary plans of improvement.