Salini Impregilo has complied with the requirements of the original version of the Corporate Governance Code 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 Corporate Governance Code in March 2006 by the Committee for Corporate Governance of Borsa Italiana, the Issuer’s Board of Directors resolved, in their meeting on December 20, 2006, to ask the internal control committee to perform an in-depth comparative analysis of the company’s corporate governance structure with regard 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 resolved, in their meeting on March 12, 2007, to comply with the Corporate Governance Code 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 October 16, 2012, after analyzing the individual changes to the December 2011 Corporate Governance Code and considering the proposals by the control and risk committee in the meeting held on September 21, 2012, the Board of Directors resolved to confirm the Issuer’s compliance with the Corporate Governance Code, as revised in December 2011, using the methods set out below.
Lastly, on December 17, 2014, after examining the additional updates to the Corporate Governance Code of July 2014, the Board resolved to confirm the Issuers compliance with the July 2014 edition of the Corporate Governance Code.
Specifically, in order to align the company’s corporate governance structure with the standards and criteria of the Code (March 2006 version), on March 12, 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”. At present, the group does not have an investment in Ecorodovias Infraestrutura e Logística S.A. and, therefore, it is no longer a strategic subsidiary of Salini Impregilo. On October 14, 2014, the Board of Directors also took note of the situation of the target market of Fisia Italimpianti SpA and ordered its reorganization. Therefore, that company is no longer classified by the Issuer as a strategic subsidiary;
- 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 at the board meeting held on July 7, 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 March 25, 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 March 27, 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 control and risk committee and the compensation and nominating 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 authorization of outlays is not necessary although the committees are required to document their expenses. They may also avail of internal information and personnel. The Board of Directors resolved to increase the control and risk committee’s budget from €25,000 to 50,000 on May 11, 2011. This amount can be increased up to €100,000 with the documented request by the committee chairperson and approval by the Board of Directors’ chairperson;
- 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 July 18, 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 June 27, 2007; following the new rules introduced by Legislative Decrees nos. 27 and 39 of January 27, 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 May 2, 2011, following renewal of the Board of Directors elected by the shareholders on April 28, 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 July 18, 2012, the board elected by the shareholders on July 17, 2012, gave compensation and nominating 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 organizational 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 March 21, 2000, with the assistance of the internal control committee; on March 25, 2009, the board resolved to adopt, on proposal of the internal control committee, a document setting out the “"Guidelines for the internal control system”, replacing the "Guidelines for Internal Control Policies" approved by the Board on March 21, 2000. This document was updated to its current version by the Board of Directors on November 12, 2014. 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 integrity board pursuant to Article 6 of Legislative decree no.231/01) and the components making up the internal controls being the organizational structure, the proxies and delegation system, the Organization, Management and Control Model, the Group Code of Ethics and internal organizational documents;
- with respect to criterion 8.C.1.b), to appoint the CEO as the “Executive director in charge of internal controls”; on July 18, 2012, following appointment of the current Board of Directors by the shareholders on July 17, 2012, the board confirmed the CEO as the “Director in charge of the internal control and risk management system”, 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 August 26, 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 September 25, 2012, and January 14, 2014, the Board of Directors resolved on the remuneration of the internal control supervisor and the chief internal auditor upon the proposal of the Director in charge of the internal control and risk management system and with the favorable opinion of the control and risk 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 May 2, 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 July 18, 2012, the Board of Directors elected by the shareholders on July 17, 2012, re-elected the control and risk 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 November 30, 2010, after receiving the favorable opinion of the committee for related -party transactions, 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 March 12, 2010 and subsequently amended with resolution no. 17389 of June 23, 2010; 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 held on April 20, July 9, 2012, May 13, 2013, and December 17, 2014, the Board of Directors amended the procedure for related party transactions after receiving the favorable opinion of the committee for related -party transactions which was supported by the Corporate Governance Advisory Board. The Board of Statutory Auditors of the Company ascertains compliance of the Procedure with the principles set out in Consob regulation, most recently on December 17, 2014;
- 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 website: 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 March 12, 2007) days before the date set for the meeting; in their extraordinary meeting of June 27, 2007, the shareholders actually modified the Bylaws; following the new rules introduced by Legislative Decrees nos. 27 and 39 of January 27, 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 website www.salini-impregilo.com (under the “Governance – Shareholders’ Meeting”) 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.