Salini Impregilo has complied with the requirements of the original version of the Code of Conduct issued by the Committee for Corporate Governance of Borsa Italiana S.p.A. and the subsequent version published in July 2002.
Following publication of the new Code of Conduct in March 2006 by the Committee for Corporate Governance of Borsa Italiana, the Issuer’s Board of Directors’ meeting on 20 December 2006 resolved to request the internal control committee perform an in-depth comparative analysis of the company’s corporate governance structure compared to the Code requirements and to provide the board with its assessments, opinions and proposals about alignment with the Code and necessary actions.
Based on the analysis and proposals of the internal control committee, the board meeting of 12 March 2007 resolved to comply with the Code of Conduct drawn up by the Committee for Corporate Governance of Borsa Italiana S.p.A. (March 2006 version), with the methods and exceptions set out below.
Finally, on 16 October 2012, after analysing the individual changes to the December 2011 Code of Conduct and considering that proposed by the risk and control committee in the meeting of 21 September 2012, the Board of Directors resolved to confirm the Issuer’s compliance with the Code of Conduct, as revised in December 2011, using the methods set out below.
Specifically, in order to align the company’s corporate governance structure with the standards and criteria of the Code (March 2006 version), on 12 March 2007, the Board of Directors resolved:
- with respect to criterion 1.C.1.b), to classify FISIA Italimpianti S.p.A., Impregilo International Infrastructures N.V. and EcoRodovias Infraestrutura e Logística (formerly Primav Ecorodovias) S.A. as “strategic subsidiaries”; to assess the organisational, administrative and accounting structure of the Issuer and strategic subsidiaries Impregilo International Infrastructures N.V. and EcoRodovias Infraestrutura e Logística S.A., setting measures to be adopted for FISIA Italimpianti S.p.A.’s organisational structure; the group does not currently have an investment in Ecorodovias Infraestrutura e Logística S.A. and, therefore, it is no longer a strategic subsidiary of Salini Impregilo;
- with respect to criterion 1.C.1.f), to establish the general criteria concerning major transactions, as described in section 4.3 of this report;
- with respect to criterion 1.C.1.g), to perform once a year, during the meeting held to approve the financial statements, an assessment of the size, composition and working of the Board of Directors itself and its committees;
- with respect to criterion 1.C.3., to adopt the rules described in section 4.2 of this report;
- with respect to criterion 2.C.1., to confirm the previous assessment stated in the board meeting of 7 July 2005 and, therefore, to consider the directors who are members of the executive committee as non-executive, given that participation in this committee, considering the frequency of the meetings and subject of the related resolutions, does not entail the systematic involvement of its members in the day-to- day management of the company nor does it lead to a significant increase in their remuneration compared to that received by the other non-executive directors; and, therefore, only the CEO qualifies as an executive director; this assessment was further confirmed by the Board on 25 March 2013, also in light of the opinion expressed by the corporate governance advisory board;
- with respect to criterion 2.C.2., as proposed by the chairperson, that the relevant internal functions provide all the directors and statutory auditors with access to the company’s intranet site to allow their direct access to the documentation and information posted thereon;
- with respect to criterion 3.C.4., to generally comply with the requirements set by the Code about directors’ independence and that any non-compliance therewith should be justified;
- with respect to criterion 3.C.5., that the outcome of the controls performed to check the correct application of the criteria and procedures put in place by the board to assess the independence of its members be communicated by the Board of Statutory Auditors to the market in its report to the shareholders. The Board of Statutory Auditors stated that it complies with this resolution during the board meeting;
- with respect to criterion 3.C.6., that the independent directors meet annually, before the board meeting held to approve the annual financial statements, for self- assessment purposes and that any remedial action to be taken be examined with respect to the role played by independent directors within the board; they report to the board on their findings;
- with respect to criterion 4.C.1., to approve a specific “Procedure for the internal management and external communication of documents and information” to replace the “Internal regulations for disclosing “price sensitive” documents and information to the market”, approved by the Board of Directors on 27 March 2001, as described in paragraph 5 of this report;
- with respect to criterion 5.C.1.c), to make available to the internal control and remuneration committees (now the risk and control committee and the remuneration and appointment committee, respectively) an annual budget of €25,000 per committee to be used for any necessary consultancy or other services to carry out their duties. The prior authorisation of outlays is not necessary although the committees are required to document their expenses. They may also avail of internal information and personnel;
- with respect to standard 6.P.2., not to set up an appointment committee as, to date, the shareholders have not encountered difficulties in proposing suitable candidates (and no such difficulties are envisaged) such that the composition of the Board of Directors complies with that recommended by the Code; following the amendments to the Code approved by the Committee for Corporate Governance in December 2011, the board resolved to rename the remuneration committee as the remuneration and appointment committee on 18 July 2012, giving it the duties envisaged by the Code for the appointment committee;
- with respect to criterion 6.C.1., to comply with the criterion proposing the related change in the Bylaws to the shareholders in their extraordinary meeting; the shareholders actually resolved to change the Bylaws in their extraordinary meeting of 27 June 2007; following the new rules introduced by Legislative Decrees nos. 27 and 39 of 27 January 2010, the Board of Directors amended article 20 of the Bylaws again pursuant to article 24 of the same Bylaws, as described in section 4.1 of this report;
- with respect to criterion 7.C.3., to assign the duties as per such criterion to the remuneration committee; that the committee shall appoint a chairperson from among its members and shall draw up operating rules; with its resolution of 2 May 2011, following renewal of the Board of Directors elected by the shareholders on 28 April 2011 and in order to set up a remuneration committee, the Board of Directors gave this new committee the duties set out by the Code drawn up by Borsa Italiana’s Committee for Corporate Governance (March 2006 edition), as amended in March 2010; on 18 July 2012, the board elected by the shareholders on 17 July 2012, gave the remuneration and appointment committee the following duties set out by the Code as revised in December 2011, when setting it up;
- with respect to criterion 8.C.1.a), considering changes in legislation over time and in the organisational structure, to postpone the procedure, and, when and if necessary, to update the “Guidelines for internal control policies” approved by the Board of Directors on 21 March 2000 with the assistance of the internal control committee; the board adopted a document setting out the "Guidelines for the internal controls of IMPREGLIO S.p.A." as proposed by the internal control committee with its resolution of 25 March 2009 replacing the “Guidelines for internal control policies” approved by the Board on 21 March 2000. This document defines and sets out the objectives of the internal controls, the guiding principles and the parties in charge of it (the Board of Directors, the CEO as the Executive director in charge of internal controls, the internal control committee, the internal control supervisor, the Board of Statutory Auditors, the independent auditors, the manager in charge of financial reporting and the supervisory board pursuant to article 6 of Legislative Decree no. 231/01) and the components making up the internal controls system, as identified in the organisational structure, the proxies and delegation system, the Organisational, management and control model, the Group Code of Ethics and internal organisational documents;
- with respect to criterion 8.C.1.b), to nominate the CEO as the “Executive director in charge of internal controls”; on 18 July 2012, following appointment of the current Board of Directors by the shareholders on 17 July 2012, the board confirmed the CEO as the “Director in charge of internal controls and risk management”, pursuant to criterion 7.P.3.a) (i) of the Code, as revised in December 2011;
- with respect to the last paragraph of criterion 8.C.1., to set the remuneration of the internal control supervisor after consulting the internal control committee and upon the proposal of the CEO, as the Executive director in charge of internal controls; on 26 August 2011, with the approval of the Executive director in charge of internal controls and the directors making up the internal control committee, the Board of Directors approved the proposal of the remuneration committee and resolved on the internal control supervisor’s remuneration; on 25 September 2012, and 14 January 2014, the Board of Directors resolved on the remuneration of the internal control supervisor and the internal audit head upon the proposal of the Director in charge of internal controls and risk management and with the favourable opinion of the risk and control committee and the Board of Statutory Auditors; with respect to criteria 8.C.1. and 8.C.3., to give the internal control committee the duties and functions set out in letters a), b), c), f) and g) of criterion 8.C.3 and those of criteria 8.C.1 and 9.C.1; moreover, considering the positive opinion of the Board of Statutory Auditors (reiterated by the present statutory auditors in their meeting of 2 May 2011), to assign it the duties and functions set out in letters d) and e) of criterion 8.C.3. without altering the fact that the Board of Statutory Auditors shall carry out such duties and functions in compliance with the methods that allow the Board of Directors to review its work, which should be made available on a timely basis; that the committee shall appoint a chairperson from among its members and shall draw up operating rules; that the committee shall meet at least four times a year and always when the annual, interim financial and quarterly reports are being approved; on 18 July 2012, the Board of Directors elected by the shareholders on 17 July 2012 re-elected the risk and control committee and assigned the committee the duties pursuant to article 7 of the Code, as revised in December 2011;
- with respect to criterion 8.C.6., to define the duties of the internal control supervisor in line with such criterion; and that this person also reports to the CEO as the “Executive director in charge of internal controls”;
- with respect to criterion 9.C.1., to replace the “Guidelines for transactions with related parties” ruling until then; the Board of Directors approved a specific new procedure on 30 November 2010 after receiving the favourable opinion of the related party transactions committee, pursuant to article 2391-bis of the Italian Civil Code and article 4.1/3 of the Consob regulation which sets out instructions for related party resolutions adopted with resolution no. 17221 of 12 March 2010 and subsequently amended with resolution no. 17389 of 23 June 2010; on 29 November 2010, the Board of Statutory Auditors assessed the new procedure’s compliance with the criteria set out in the Regulation; this procedure described in section 12 of this report sets out the rules, methods and criteria aimed at ensuring the transparency and substantial and procedural correctness of related party transactions carried out by the Issuer either directly or via its subsidiaries; subsequently, in its meetings of 20 April, 9 July 2012 and 13 May 2013, the Board of Directors amended the procedure for related party transactions after receiving the favourable opinion of the related party transactions committee. On 20 April, 9 July 2012, and 13 May 2013, the Board of Statutory Auditors confirmed that the procedure, as per its latest revision, complies with the requirements of the above Consob regulation;
- with respect to criterion 9.C.2., that, subject to the provisions of article 2391 of the Italian Civil Code, directors with interests, either directly or on behalf of third parties, in a corporate transaction to be approved by the Board of Directors or executive committee may participate in the related discussions and vote thereon as such participation represents a reason for taking a responsible decision about a transaction about which the director may have greater knowledge than the other directors; that, however, the Board of Directors or executive committee may ask such directors to leave the meeting during the discussion on a case-by-case basis;
- in relation to standard 10.P.3. and criteria 10.C.6. and 10.C.7., to adopt the “Guidelines for relations with the Board of Statutory Auditors” after the latter’s approval, available on the Internet site: www.salini-impregilo.com, under the “Governance – Board of Statutory Auditors" section”);
- with respect to criterion 10.C.7., to propose to the shareholders, in an extraordinary meeting, that the lists of candidate statutory auditors shall be deposited at the company’s registered office at least fifteen (rather than ten, as provided for on 12 March 2007) days before the date set for the meeting; in their extraordinary meeting of 27 June 2007, the shareholders actually modified the Bylaws; following the new rules introduced by Legislative Decrees nos. 27 and 39 of 27 January 2010, the Board of Directors amended article 29 of the Bylaws again, pursuant to article 24 of the same Bylaws, as described in section 13 of this report;
- with respect to criterion 11.C.1., that the document "Procedures for the attendance of shareholders at shareholders' meetings of Salini Impregilo and for exercise of voting rights" will be published and posted on the Internet site www.salini-impregilo.com (under the “Governance – Shareholders' meetings” section);
- to note that the company’s corporate governance system already complies with the other provisions of the Code.
Salini Impregilo S.p.A. and its strategic subsidiaries are not subject to non-Italian legislation that would affect the Issuer’s corporate governance structure.