3. Snam’s corporate governance system
Since it was first listed on the Mercato Telematico Azionario (Electronic Stock Exchange), organised and managed by Borsa Italiana since 2001, Snam has complied with the recommendations set out in the various versions of the Code of Corporate Governance. Compliance with the Code of Corporate Governance is voluntary and issuers may choose to full or partially disregard its recommendations. However, pursuant to the ‘comply or explain’ mechanism pursuant to Article 123-bis of the TUF, issuers must justify their reasons for not following the recommendations in their corporate governance reports.
For references to the information contained in the Report pursuant to Snam’s application of the Code of Corporate Governance recommendations, please see Annex 1.
Snam’s corporate governance system – a set of planning, management and control rules and methodologies necessary for the Company’s functioning – was identified by the Board of Directors:
- in compliance with the regulations to which the Company is subject as a listed issuer;
- pursuant to the Code of Corporate Governance; and
- in line with the national and international best practices against which the Company compares itself.
The corporate governance system also focuses on compliance with the Unbundling Regulations, given the specific nature of the activities carried out by Snam and its Subsidiaries, which are subject to regulation by the AEEGSI.
The system is based on key principles, such as proper and transparent business management implemented through (i) the definition of information flows between corporate bodies; (ii) efficient definition of the internal control and risk management system; and (iii) the adoption of an Enterprise Risk Management system (the “ERM System”). This consists of rules and organisational structures aimed at identifying, measuring, managing and monitoring the main risks that could affect the achievement of the Company’s strategic objectives.
Snam uses a traditional management and control system. The Bylaws set out the duties and activities of the following corporate bodies:
- Shareholders’ Meeting;
- Board of Directors; and
- Board of Statutory Auditors.
3.1 Shareholders’ Meeting
The Shareholders’ Meeting is a decision-making body through which shareholders appoint the Board of Directors and the Board of Statutory Auditors. Pursuant to Article 12 of the Bylaws, in addition to the matters irrevocably assigned by law, 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 activities6.
3.2 Board of Directors
The Board is vested with the broadest powers for the ordinary and extraordinary management of the Company, and may execute any act necessary to achieve the corporate objective. The Board of Directors appoints the Chairperson, 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 Bylaws7:
- Compensation Committee;
- Appointments Committee;
- Control, Risk and Related-Party Transactions Committee; and
- Sustainability Committee.
3.3 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 in the performance of company activities. It also evaluates the adequacy of the organisational, administrative and accounting structure adopted by the Company, and how it functions in practice. 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 Committee”8.