4.1 Board of Statutory Auditors
Role and functions
Pursuant to Article 149, paragraph 1 of the TUF, the Board of Statutory Auditors oversees:
- compliance with the law and with the deed of incorporation;
- respect for the principles of proper administration;
- the adequacy of the Company’s organisational structure in relation to its remit, the internal control system and the administrative and accounting systems, as well as the reliability of the latter in properly representing operational events;
- procedures for the implementation of the rules established by the Code of Corporate Governance;
- the adequacy of the Company’s instructions to its Controlled Companies pursuant to Article 114, paragraph 2.
Pursuant to Article 19 of Legislative Decree No. 39 of 27 January 2010, the Board of Statutory Auditors also performs supervisory functions in its capacity as the “Internal Control and Audit Committee”, overseeing in particular:
- the financial reporting process;
- the effectiveness of the internal control, internal audit and, if applicable, risk management systems;
- the independent audit of the annual financial statements and consolidated financial statements;
- the independence of the External Auditors, particularly with regard to the provision of non-audit services to the entity being audited.
Upon prior notice to the Chairman of the Board of Directors, the Board of Statutory Auditors may call Shareholders’ Meetings and Board of Directors’ meetings. The power to call Board of Directors’ meetings may be exercised individually by each member of the Board of Statutory Auditors; the power to call Shareholders’ Meetings must be exercised by at least two members of the Board.
The Board of Statutory Auditors is invited to attend meetings of the Control and Risk Committee.
In 2013, the Board of Statutory Auditors met 15 times; the meetings were attended on average by 70.91% of the statutory auditors, see of the Section IV. The average duration of the Board of Statutory Auditors’ meetings was 240 minutes. As at the date of this Report, the Board of Statutory Auditors has scheduled five meetings for the first quarter of 2014. To date, three of these meetings have taken place.
Pursuant to the Procedure “Transactions in which directors or statutory auditors have an interest and related-party transactions” the members of the Board of Statutory Auditors must declare their own interests or the interests of third parties in specific operations put before the Board of Directors. No such declarations were required from the members of the Board of Statutory Auditors in 2013. Pursuant to applicable legislation, the Board of Statutory Auditors receives the information flows it needs to perform its duties.
A description of the ways in which the Board of Statutory Auditors interacts with the Control and Risk Committee and with the Internal Audit department can be found respectively in Chapters and of Section III of the Report.
Appointment and term of office
Pursuant to Article 20 of the Bylaws, Snam’s Board of Statutory Auditors is made up of three standing auditors and two alternate auditors appointed by the Shareholders’ Meeting for three financial years. They may be re-elected at the end of their term of office.
Statutory auditors are chosen from among those who meet the professionalism and integrity requirements indicated in Justice Ministry Decree No. 162 of 30 March 2000. Issues set forth in this decree which relate strictly to the Company’s activity include: commercial law, business economics and business finance. Likewise, the sector pertaining strictly to the Company’s business is the engineering and geology sector.
Statutory auditors may not hold more than the maximum number of positions permitted by applicable legislation. In any event, pursuant to Article 2, paragraph 2, letter c) of the Prime Ministerial Decree of 25 May 2012, the statutory auditors may not be a member of the administrative or control bodies, or hold senior management positions, at Eni and its subsidiaries, nor may they have any direct or indirect professional or financial relationship with said companies.
As per the provisions set forth for the Board of Directors and in accordance with the applicable provisions, the Bylaws provide that the statutory auditors be appointed by list voting, unless they are replaced during their term of office, in compliance with the applicable law on gender representation.
In the lists submitted by shareholders, the candidates must be listed by consecutive number and their number must not be greater than the number of members of the body to be elected. The rules for filing, presenting and publishing the lists are the same as for the election of directors (see Section III, ). Each shareholder may submit or be involved in submitting only one list and may vote on only one list, according to the terms set forth in the applicable legislative and regulatory provisions.
Only shareholders who, alone or together with other shareholders, represent at least 1% of the share capital (the percentage set by Consob Resolution No. 18775 of 29 January 2014) are entitled to submit lists. Each candidate may feature on only one list; otherwise their candidacy is declared void.
Lists are broken down into two sections: the first for candidates to the office of standing auditor, and the second for candidates to the office of alternate auditor. At least the first candidate in each section must be included in the register of auditors and must have a minimum of three years’ experience as an external auditor.
In order to comply with the applicable law on gender representation, and considering both sections, lists which contain three or more candidates presented for appointment of the majority of the Board of Statutory Auditors’ members must contain candidates of each gender in the section for the appointment of standing auditors, in accordance with the notice of convocation of the Shareholders’ Meeting. Where the list contains only two candidates, one must be male and the other female.
Lists for appointing statutory auditors, together with details on the candidates as well as a mention of the identity of the shareholders submitting said lists and the percentage equity interest owned, must be made available to the public at the Company’s headquarters and Borsa Italiana S.p.A., and posted on the Company’s website, in a timely manner, and in any case within the time periods provided for by applicable legislation. Additional binding legal provisions, including regulatory rules, remain unchanged.
List-voting mechanism for the election of the board of statutory auditors
Below is a description of the ways in which the Board of Statutory Auditors is appointed using a list-voting mechanism, as provided for by Article 20 of the Bylaws.
Two standing auditors and one alternate auditor are taken from the list that wins the majority of the votes. The other standing auditor, who becomes Chairman of the Board of Statutory Auditors, and the other alternate auditor are appointed according to the methods set forth in Article 13.5, b) of the Bylaws for the election of directors, which are to be applied separately to each of the sections into which the other lists are broken down.
Where following the above procedure fails to ensure compliance with the law on gender representation for the standing auditors, the quotient of votes to be attributed to each candidate taken from the standing auditor sections of the different lists shall be calculated by dividing the number of votes for each list by the order number of each of these candidates; the candidate of the most represented gender with the lowest quotient among the candidates taken from all the lists shall be replaced by the candidate of the least represented gender (with the highest consecutive number) from the same standing auditor section of the list of the replaced candidate, or, failing this, from the alternate auditor section of the same list as the replaced candidate (who, in this case, takes the place of the alternate auditor he/she has just been replaced by). If this fails to ensure compliance with the law on gender representation, the candidate is replaced by the person appointed by statutory majority at the Shareholders’ Meeting, in such a way as to ensure that the composition of the Board of Statutory Auditors complies with the law and with the Bylaws.
Where candidates from different lists have obtained the same quotient, the candidate from the list from which the greater number of statutory auditors has been taken shall be replaced, or, if this is not applicable, the candidate taken from the list with the fewest votes shall be replaced, or, if the number of votes is the same, the candidate who receives the fewest votes in a dedicated vote by the Shareholders’ Meeting shall be replaced.
In the event of the replacement of a statutory auditor from the list that wins the majority of the votes, he/she is replaced by the alternate auditor from the same list; in the event of replacement of a statutory auditor from other lists, he/she is succeeded by the alternate auditor from the those lists.
The current Board of Statutory Auditors was appointed by the Shareholders’ Meeting on 26 March 2013 for three financial years and in any event up to the date of the Shareholders’ Meeting called to approve the financial statements for 2015:
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Standing auditor and Chairman
On the basis of declarations provided by its members, and on the occasion of its renewal, the Board of Statutory Auditors verified that all its members met the independence requirements set forth in Article 148, paragraph 3 of the TUF, as well as those set forth in Article 3 of the Code of Corporate Governance pertaining to directors. During the first half of 2014, the Board of Statutory Auditors shall perform its annual check that all its members meet the independence requirements set forth in Article 148, paragraph 3 of the TUF, as well as those set forth in Article 3 of the Code of Corporate Governance pertaining to directors.
A summary of the biographies of the standing auditors is shown below.
Born in Rome in 1963, Massimo Gatto gained a degree in Economics and Business from the Sapienza University of Rome. He works as a chartered accountant, auditor and official receiver. Currently, in addition to serving as Chairman of the Board of Statutory Auditors of Snam, he is a standing auditor of Associazione Nazionale per l’Enciclopedia della Banca e della Borsa, and an alternate auditor of UniCredit Factoring S.p.A., and Mediaset S.p.A.
Born in Turin in 1961, Leo Amato graduated in Business Economics from Turin University.
He is registered on the Italian Register of Auditors and the Register of Court-Appointed Experts; he is a member of the Arbitration Chamber of Piedmont. He holds administration and audit positions in a number of Italian companies. He was a short-term Lecturer of Business contract law, Non-profit organisation law and Trust and fiduciary transaction law at the Faculty of Economics of the University of Eastern Piedmont. He is the Chairman of Iusefor, the Training Centre of the University Institute of European Studies of Turin.
Born in Este on 11 August 1962, Stefania Chiaruttini graduated with a degree in Economics and Business from Milan’s Bocconi University. She is registered on the Italian Register of Auditors. She has held and holds the post of statutory auditor, director and liquidator of various companies, including companies listed on the Milan Stock Exchange.
Born in Naples in 1976. She graduated in Business Economics from Milan’s Bocconi University. She is a standing auditor of Nonino Distillatori S.p.A., Ennefin S.p.A. and Nonino S.p.A. She is registered on the Italian Register of Auditors.
Born in Pavia in 1959. He graduated in Economics and Business from the University of Pavia and earned a research doctorate from Milan’s Bocconi University. He is Professor at the University of Pavia’s Economics Faculty. He is chartered accountant and auditor. He is a corporate and business consultant and a technical consultant to the magistrature.
He is Chairman of the Board of Statutory Auditors of Napoletanagas S.p.A. and GNL Italia S.p.A.