SNAM Report on Corporate Governance and Ownership Structure 2016

The Company’s Board of Directors meets regularly and is organised and operates to ensure the efficient and effective performance of its duties.

To this end, the Board of Directors has approved a set of Regulations aimed at governing the procedures for

convening meetings;
performing Board duties; and
drawing up meeting minutes²¹.

For a description of the procedures for convening and holding Board meetings, please see Annex 3 to this Report.

In 2016:

the Board of Directors met 13 times;
the meetings were attended by 98.30% of directors on average;
the meetings were attended by independent directors 99.14% on average; and
the average duration of the meetings was 118.7 minutes.

Nine meetings are scheduled for 2017; as at the date of this Report, two have been held.

Board of Directors’ meeting notices are usually sent at least five days before the meeting. A complete, comprehensive set of documents related to agenda items is made available to directors and standing auditors by the Board Secretary at least five days prior to the date of the meeting, except in exceptional cases. This deadline has generally been respected.

The Company’s governance stipulates that Board members shall act and pass resolutions knowingly and independently on matters within their competence, with the aim of creating shareholder value.

At Board meetings, heads of the competent Company and Group functions may, at the request of the Chairperson and with the consent of those present, attend to provide appropriate background information on agenda items and enhance the directors’ knowledge of the Group’s situation and corporate dynamics (some department heads so attended in 2016). In 2016, the CFO regularly attended meetings, and the managers of the following functions attended when matters within their respective remits were under discussion: Human Resources & Organisation, Corporate Strategy, Investor Relations, Institutional Relations, CSR and Communication and Internal Audit.

Pursuant to the procedure “Transactions in which directors and statutory auditors have an interest and related-party transactions”, the directors must declare any interest on their own behalf or that of third parties in specific transactions submitted to the Board of Directors.

The table below sets out the main activities carried out by the Board of Directors in 2016 and up to its meeting on 6 March 2017.

MONTH	STRATEGY AND FINANCE	GOVERNANCE	INTERNAL CONTROL AND RISK MANAGEMENT
January		Appointment of Marco Alverà as the Company’s Chief Executive Officer Examination of results of Board Evaluation
February		Check of the compatibility of the positions and verification of the independence and integrity requirements of directors
March	Approval of the consolidated financial statements, the draft 2015 budget and the Report on Operations	2015 Report on Corporate Governance and Ownership Structure 2016 Remuneration Report 2015 Corporate Social Responsibility Report Convening of Shareholders’ Meeting of 27 April 2016 and approval of the related reports Guidelines on the future size and composition of the Board of Directors, to be submitted to shareholders in view of the Shareholders’ Meeting to renew the corporate bodies on 27 April 2016, having heard the opinion of the Appointments Committee and taken into account the results of the Board Evaluation carried out by the previous advisor, Crisci and Partners²²	Assessment of the adequacy of the organisational, administrative and accounting structure of the Company and the Subsidiaries Assessment of the adequacy and effectiveness of the internal control and risk management system Review of the Audit Schedule and budget for the Internal Audit function for 2016
April		Appointment of Marco Alverà as the Company’s Chief Executive Officer Determination of powers reserved to the Board of Directors
May	Interim management statement as at 31 March 2016 Review of first 2016 forecast	Appointment of members of the Board Committees, establishment of the Sustainability Committee and approval of the related Regulations Appointment of the Supervisory Body and Code of Ethics Supervisor
June	Approval of 2016-2020 Strategic Plan Approval of Demerger plan	Convening of Ordinary and Extraordinary Shareholders’ Meeting on 1 August 2016
July	Approval of the consolidated half-year financial report as at 30 June 2016 and the consolidated quarterly results as at 30 June 2016 Review of second 2016 forecast	Updating of the “Market Abuse” and “Notification” procedures Review of matters concerning deferred monetary incentives	Report on the adequacy of the Group’s corporate reporting control system and compliance with administrative accounting procedures for the first half of 2016
September	Renewal of the EMTN programme	Appointment of the Executive Responsible For Preparing Corporate Accounting Documents Review of matters concerning long-term incentive plans
November	Interim management statement as at 30 September 2016 Review of third 2016 forecast
December	Review of the 2017-2021 Strategic Plan (first reading) and the 2017 Budget	Annual assessment of the procedure entitled “Transactions in which directors and statutory auditors have an interest and related-party transactions”
6 March 2017	Approval of the Snam Group’s Strategic Plan for 2017-2021, during the definition of which - in line with the strategic risks defined by the ERM system and also with a view to medium to long term sustainability - analysis and assessments were made of sensitivities to the potential impact of such risks	A positive assessment of the size, composition and functioning of the Board and Committees (for more information, see section (ii) below) 2016 Report on Corporate Governance and Ownership Structure 2017 Remuneration Report 2016 Corporate Social Responsibility Report Convening of Shareholders’ Meeting of 11 April 2017 and approval of the related explanatory reports	Assessment of the Company’s organisational, administrative and accounting structure was prepared by the Chief Executive Officer with the help of the relevant functions and submitted, as well as to the Board of Directors for approval, to the Board of Statutory Auditors and the Control, Risk and Related-Party Transactions Committee. Judgement: adequate Assessment of the organisational, administrative and accounting structure of the Subsidiaries, after approval by the Boards of Directors of each Subsidiary and after consultation with the respective Boards of Statutory Auditors. Judgement: adequate The Board of Directors did not set criteria for the identification of stategic subsidiaries, as it assesses the organizational, administrative and accounting structure of all the Subsidiaries

21 At its meeting on 26 January 2015, the Board of Directors amended its Regulations to enable compliance with the provisions of the Shareholder Agreement between CDP S.p.A., SGEL and State Grid International Development Limited relating to potential positions of conflict of interest held by the director appointed by SGEL (see Section II, Point 8).

22 The assessments were made available to the public at the Company’s headquarters, on the Company’s Website (www.snam.it, Governance section) and on Borsa Italiana’s website and at the authorised storage mechanism.

2.2 Meetings of the Board of Directors