5. Snam corporate governance system

Snam’s corporate governance system, consisting of a set of rules and methodologies for planning, management and control necessary for the Company’s functioning, was delineated by the Board of Directors (i) in compliance with the rules to which the Company is subject as a listed Issuer, (ii) in compliance with the Code of Corporate Governance, and (iii) in line with the national and international best practice that the Company strives to meet. The corporate governance system also takes into consideration the Unbundling Regulations¹¹, given the specific nature of the activities carried out by Snam and its Controlled Companies, which are subject to regulation of the Electricity and Gas Authority.

This system is based on certain key principles, such as a correct, transparent choice of management for corporate activities, which is ensured through the identification of information flows between corporate bodies, and an efficient definition of the internal control and risk management system. For this purpose, during the course of 2013 Snam adopted an enterprise risk management system consisting of organisational structures, procedures and rules aimed at identifying, measuring, managing and monitoring the main risks that can affect the achievement of strategic objectives.

Snam adopts a traditional management and control system. The Bylaws set out the duties and activities of the following corporate bodies:

• Shareholders’ Meeting;
• Board of Directors;
• Board of Statutory Auditors.

Shareholders’ Meeting

The Shareholders’ Meeting is the body through which shareholders take decisions and appoint the Board of Directors and the Board of Statutory Auditors. In addition to the matters irrevocably assigned to it by law, pursuant to Article 12 of the Bylaws, the Shareholders’ Meeting is exclusively responsible for passing resolutions concerning the sale, transfer, lease, usufruct or any other act of disposition, including within the scope of joint ventures, or subjection to restrictions, of the Company or of business units of strategic importance in relation to gas transportation and dispatching activities¹².

Board of Directors

The Board is vested with the broadest powers for ordinary and extraordinary management of the Company, and may execute any act deemed necessary for the achievement of the corporate purpose. The Board of Directors appoints the Chairman, if the Shareholders’ Meeting has not already done so, delegates its powers to one or more of its members, and may set up Committees. Specifically, the Board of Directors has created the following Committees, in compliance with the Code of Corporate Governance and the Bylaws¹³:

• Remuneration Committee;
• Appointments Committee;
• Control and Risk Committee.

Board of Statutory Auditors

The Board of Statutory Auditors oversees compliance with the law and with the deed of incorporation, as well as respect for the principles of proper administration within the performance of company activities; it also evaluates the adequacy of the organisational, administrative and accounting structure adopted by the Company, and its functioning. Pursuant to Legislative Decree No. 39 of 27 January 2010, the Board of Statutory Auditors also performs supervisory activities in its role as the “internal control and audit committee¹⁴”.