7.3 Related-Parties Procedure
The Board of Directors approved the Procedure entitled “Transactions in which directors and statutory auditors have an interest and related-party transactions” pursuant to the Regulations on Related-Party Transactions (the “Related-Parties Procedure”)42. The Related-Parties Procedure was adopted in compliance with the Unbundling Regulations, taking into account the specific nature of the activities engaged in by Snam and its Subsidiaries, which are subject to oversight by the AEEGSI.
Related-Parties Procedure highlights
- Involvement, as the case may be, of the Control, Risk and Related-Party Transactions Committee or the Compensation Committee (for decisions concerning the remuneration of Snam directors, auditors and managers with strategic responsibilities)
- Provision of a fixed significance threshold of Euro 140 million
- Extension of the scope of application of the Procedure to all transactions entered into by the Subsidiaries with related parties of Snam
- Establishment of a special approval process for transactions in which directors or auditors of Snam have an interest
The Related-Parties Procedure makes a distinction between Large Transactions and Small Transactions, on the basis of a significance threshold. To ensure maximum market transparency, the Related-Parties Procedure has a stricter parameter for identifying Large Transactions – a fixed significance threshold of Euro 140 million – than that provided in the Regulations on Related-Party Transactions43.
The Related-Parties Procedure requires that the competent committee issue:
- for “Small Transactions44”, a non-binding reasoned opinion that must address the Company’s interest in carrying out the transaction, as well as the expediency and substantial accuracy of its conditions. In the event of a negative opinion, the Company is required to inform the market of the reasons that led it to carry out the transaction despite this opinion; and
- for “Large Transactions45”, which are the exclusive preserve of the Board of Directors, a favourable reasoned opinion on the Company’s interest in carrying out the transaction, as well as the expediency and substantive accuracy of its conditions. The Committee is also involved in the negotiation and examination stages, receiving comprehensive and timely information, with the power to request information and submit comments to the authorised bodies and persons tasked with carrying out the negotiations and examination.
In both cases, the Committee may be assisted, at the Company’s expense, by one or more independent experts.
Finally, the Related-Parties Procedure sets out a special approval process – which requires, among other things, that the Control, Risk and Related-Party Transactions Committee issue a non-binding opinion on the convenience of the transaction for the Company – in the case of transactions, other than related-party transactions, in which Snam’s directors or statutory auditors have an interest, on their own account or on behalf of third parties.
42 The “Transactions in which directors and statutory auditors have an interest and related-party transactions” procedure defines a “transaction” (or “transactions”) as the active or passive transfer of resources, services or assumption of obligations, regardless of whether a fee has been agreed, carried out by Snam or its Subsidiaries with related parties of Snam. These include: (i) mergers or demergers by incorporation or non-proportional demergers; and (ii) any decision relating to the awarding of remuneration and financial benefits, in any form, to members of the administration and control bodies and to executives with strategic responsibilities.
43 The Regulations on Related-Party Transactions established, as the relevant parameter for the identification of large transactions between related parties, the threshold of 5% of at least one of several parameters relating to the scale of the transaction in question identified by the Regulations on Related-Party Transactions. The threshold is lowered to 2.5% for transactions entered into with a listed parent or with parties related to the same, which are in turn related to the Company.