Annex 5 – Board Committees: Powers
The Compensation Committee performs the following functions:
- submits the Remuneration Report and, in particular, the remuneration policy for Directors and managers with strategic responsibilities, to the Board of Directors, for its approval and presentation to the Shareholders’ Meeting convened for the approval of the annual financial statements, under the terms provided for by law;
- reviews the vote on the Remuneration Report taken by the Shareholders’ Meeting in the previous financial year and expresses an opinion to the Board of Directors;
- prepares proposals regarding the remuneration of the Chairperson and the Chief Executive Officer, with regard to the various forms of compensation and economic treatment;
- makes proposals concerning the remuneration of members of the Board Committees;
- examines information reported by the Chief Executive Officer and proposes: (i) The general criteria for the remuneration of key management personnel, (ii) the annual and long-term incentive plans, including share-based plans, and (iii) the general guidelines for the remuneration of other managers of Snam and its subsidiaries;
- proposes the definition of performance targets, the aggregation of company results, the definition of clawback clauses related to the implementation of incentive plans and the determination of the variable remuneration of directors with powers;
- proposes the definition, in relation to directors with powers, of: (i) the indemnification to be paid in the event of termination of their employment, and (ii) non-competition clauses;
- monitors the application of decisions made by the Board;
- periodically evaluates the adequacy, overall consistency and practical application of the remuneration policy adopted, as described under a) above, preparing proposals on this subject to the Board;
- performs any duties that may be required by the procedure concerning related-party transactions carried out by the Company; and
- reports to the Board on the work it has carried out, at least every half-year and not beyond the deadline for approval of the financial statements and the half-year report, at the Board meeting indicated by the Chairperson of the Board of Directors; in addition, after each of its own meetings, the Committee updates the Board of Directors at the next convenient meeting about the matters addressed and the observations, recommendations and opinions formulated.
The Appointments Committee provides the following consultative and advisory functions to the Board of Directors:
- it proposes to the Board candidates for the position of director, should the office of one or more directors be vacated during the year (Article 2386, paragraph 1 of the Italian Civil Code), ensuring compliance with the requirements for the minimum number of independent directors and for the quota reserved to the least represented gender;
- at the proposal of the CEO and approval from the Chairperson, it submits to the Board candidates for the corporate bodies of the Subsidiaries included in the consolidation and of strategic foreign investee companies. Proposals by the Committee are compulsory;
- it prepares and proposes: (i) procedures for the annual evaluation of the Board and its Committees, (ii) directives concerning limitations and restrictions for the accumulation of positions by directors of Snam and its Subsidiaries, and (iii) criteria for assessing both the requirements of professionalism and independence of the Board members of Snam and its Subsidiaries and the competing activities performed; and
- it reports to the Board on the activities carried out, at least every six months and no later than the deadline for approval of the annual and half-year financial reports.
Control, Risk and Related-Party Transactions Committee
The Control, Risk and Related-Party Transactions Committee performs the following functions:
- evaluates, together with the Executive Responsible for preparing corporate accounting documents and after consulting the External Auditors and the Board of Statutory Auditors, the proper use of accounting standards and their consistency for the purposes of preparing the consolidated financial statements;
- issues opinions on specific aspects relating to the identification of the main risks faced by the Company; it performs the additional duties assigned to it by the Board of Directors in relation to transactions in which directors or statutory auditors have an interest and related-party transactions, pursuant to the terms and methods set out in the procedure annexed to the Committee Regulations;
- examines the periodic reports relating to the evaluation of the internal control and risk management system, as well as those of particular importance prepared by the Internal Auditor;
- monitors the independence, suitability, effectiveness and efficiency of the Internal Audit function;
- may ask the Internal Auditor to carry out inspections of specific operational areas, giving notice of this to the Chairperson of the Board of Statutory Auditors, the Chairperson of the Board of Directors and the Director in Charge;
- reports to the Board, at least every six months, upon approval of the annual and half-year financial report, on it work and the adequacy of the internal control and risk management system; In any case, after each of its own meetings, the Committee updates the Board of Directors at the next convenient meeting about the matters addressed and the observations, recommendations and opinions formulated; and
- expresses its opinion on the proposals put forward by the Director in Charge, in agreement with the Chairperson, to the Board of Directors: (i) relating to the appointment, dismissal and remuneration of the Internal Auditor, in line with the Company’s remuneration policies, and ensures that this person has adequate resources to carry out his/her duties, and (iii) supporting, with appropriate investigations, the assessments and decisions of the Board of Directors relating to the management of risks arising due to prejudicial acts of which the Board has become aware or that the Committee itself has reported to the Board.
The Committee also expresses its opinion to the Board of Directors to:
- define the guidelines for the internal control and risk management system, so that the main risks facing the Company and its Subsidiaries can be identified correctly and measured adequately, managed and monitored, as well as determining to what extent these risks can be managed using a policy that is consistent with the strategic objectives identified;
- periodically evaluate, at least annually, the adequacy and effectiveness of the internal control and risk management system with respect to the characteristics of the Company and the risk profile it has adopted;
- periodically approve, at least once a year, the audit schedule prepared by the Internal Auditor;
- describe, in the Report on Corporate Governance and Ownership Structure, the main features of the internal control and risk management system, as well as evaluate the adequacy of the system; and
- evaluate the conclusions presented by the External Auditors in any management letters and in the report on key matters arising from the external audit.
The Sustainability Committee provides the following consultative and advisory functions to the Board of Directors:
- it examines and assesses: (i) sustainability policies aimed at ensuring lasting value creation for shareholders generally and for all other stakeholders, over a medium/long-term time horizon, in compliance with the principles of sustainable development; and (ii) the sustainability guidelines, objectives and consequent processes and the sustainability reports submitted annually to the Board of Directors;
- it monitors the Company’s positioning on the financial markets with regard to sustainability, with particular focus on the Company’s placement in ethical sustainability indices;
- it monitors international sustainability indices and the Company’s participation in these, with the aim of strengthening its international reputation;
- reviews any sustainability initiatives provided for in agreements within the Board of Directors’ remit, including in relation to individual projects and on the subject of climate change;
- reviews the Company’s profit and non-profit strategy and its gas advocacy initiatives; and
- expresses, at the Board’s request, opinions on other matters relating to sustainability.