Role of the Board of directors

  • The Board of Directors plays a central role in the corporate governance system of the Company

The Bylaws do not specify a minimum interval between Board meetings. The Company has circulated18 a calendar that schedules 4 meetings for 2011, specifically:

  • 8 March 2011: Board of Directors' meeting to examine the draft financial reports and consolidated financial reports for the year ended on 31 December 2010;
  • 6 May 2011: Board of Directors meeting to examine the quarterly report on operations at 31 March 2011;
  • 27 July 2011: Board of Directors' meeting to examine the half-yearly financial report at 30 June 2011;
  • 3 November 2011: Board of Directors' meeting to examine the quarterly report on operations at 30 September 2011.

Board meetings may take place by means of telecommunication, enabling all parties to participate in the debate, with equal information.

The Board of Directors meetings are convened by means of letter, telegram, fax or e-mail sent to each Director and Statutory Auditor at least five days in advance (or, in urgent cases, at least six hours in advance) of the meeting. Barring exceptional cases, the Directors and the Auditors have always received the necessary documentation and information with reasonable notice in order to express their informed opinion on the matters submitted to their scrutiny.

In all cases, they have always been provided with complete information on the topics discussed to make sure that they make an informed decision.

Functions of the Board of Directors

As stated, the Board of Directors plays a central role in the corporate governance system of the Company; it has the power to direct and set the policy of the Company.

Pursuant to the Bylaws19 the Board is vested with the broadest powers, except for those matters remitted by law or the Bylaws to the authority of the Shareholders' Meeting.

The Board of Directors (also in accordance with the recommendations of the Self-Regulatory Code20):

  • examines and approves the strategic, industrial and financial plans of the Company and the Group;
  • formulates and adopts the rules for the corporate governance of the Company, and defines the Group's corporate governance guidelines;
  • evaluates the adequacy of the general organisational, administrative and accounting structure of the Company as well as of those subsidiaries of strategic importance as set up by the Managing Directors, with special reference to internal control and the management of conflicts of interest;
  • grants powers to the Managing Directors and the Executive Committee (if established) and revokes them; defining their limits, the manner in which they are to be exercised and the frequency, at least quarterly, at which such bodies must report their activities in the exercise of the powers granted them by the Board;
  • determines, after having examined the proposals of the Remuneration Committee and consulted the Board of Statutory Auditors, the remuneration of the Managing Directors and of those directors who are vested with special offices and, if the Shareholders' Meeting has not already resolved upon it, allocates the total remuneration to which the members of the Board of Directors are entitled;
  • evaluates the general performance of the Company, specifically taking into consideration information received from the delegated bodies, and periodically compares the results achieved with those planned;
  • examines and approves in advance all operations involving the Company and its subsidiaries which have a significant impact on the strategy, the profitability, the assets or the financial position of the Company, paying particular attention to situations in which one or more directors act in their own interest or in the interest of third parties, and more generally to transactions with related parties; to this end it establishes general criteria for identifying operations of significant impact;
  • at least once a year, evaluates the size, composition and functioning of the Board itself and its Committees, expressing opinions on any professional figures whose presence on the Board it might deem advisable;
  • constitutes the Supervisory Body pursuant to Legislative Decree no. 231/2001;
  • appoints the General Managers and, subject to the opinion of the Board of Statutory Auditors, the manager responsible for drawing up the company's accounting documents, determining their responsibilities and powers;
  • appoints and dismisses the internal control officer and determines their duties and remuneration, after having received the opinions of the Committee for Internal Control, Risks and Corporate Governance and the Board of Statutory Auditors;
  • reviews and approves periodic reports prepared according to the applicable legislation;
  • approves significant transactions with related parties21;
  • exercises the other powers and fulfils the responsibilities attributed to this office by the law and Company Bylaws.

Finally, the Board is responsible for overall supervision of the Company's risk assessment and management system. In this regard, the reader is referred to the "Risk Governance" section.

18 3 November 2010 Press Release.
19 Article 11 of the Company Bylaws.
20 Self-Regulatory Code: Criterion of application 1.C.1., lett. a).
21 For a definition of significant transactions with related parties, the reader is referred to the “Procedure for Transactions with Related Parties” appearing at the end of this report and published on the Company’s website.