Ansaldo STS adopts a corporate governance system that is based on the highest business management transparency and fair practice standards. This corporate governance system is compliant with the provisions of law and with the regulatory provisions of CONSOB (the Italian commission for listed companies and the stock exchange) and Borsa Italiana. It is also in line with the contents of the code of conduct for listed companies adopted by Borsa Italiana S.p.A. - which Ansaldo STS has implemented - and the international best practices.
The corporate governance system is aimed at maximising value for shareholders, monitoring business risks, building transparency with the market and reconciling the interests of all shareholders, with particular attention to smaller shareholders.
Ansaldo STS’ corporate governance system is based on a traditional model, and includes:
- shareholders’ meetings;
- the board of directors, which includes the followingcommittees;
- the risk and control committee;
- the appointments and remuneration committee;
- the board of statutory auditors;
- the independent auditors.
The company’s current main corporate governance tools are listed below:
- code of ethics;
- organisational, management and control modelpursuant to Legislative decree no. 231/01;
- shareholders’ meeting regulations;
- board of directors’ regulations;
- risk and control committee regulations;
- appointments and remuneration committee regulations;
- related party transactions procedure adopted pursuant to article 4 of Consob regulation no. 17221 of 12 March 2010;
- procedure for keeping and updating the register of persons with access to privileged information;
- procedure for the management and communication of privileged information;
- nternal dealing code of conduct.
Board of directors
Ansaldo STS’ board of directors has the widest powers for the management of the company, with the power to take any and all suitable action to achieve the company’s purposes, except for those reserved for the shareholders.
The current board of directors was appointed by the shareholders during the ordinary meeting held on 15 April 2014. After deciding on the number of directors (nine), the shareholders appointed a new board for the period from 2014 to 2016, confirming the outgoing directors Sergio De Luca, Luigi Calabria, Stefano Siragusa, Giovanni Cavallini and Bruno Pavesi and appointing four new directors, namely, Giulio Gallazzi, Alessandra Genco, Paola Pierri and Barbara Poggiali.
They concurrently confirmed Sergio De Luca as Chairman.
On the same date, the board of directors confirmed Luigi Calabria as Deputy Chairman of the board of directors and Stefano Siragusa as CEO (he has also been the company’s general manager since 1 January 2014).
On 31 July 2014, the Deputy Chairman announced his resignation as director with effect from the board meeting which co-opted a new director (on 1 October 2014), given his commitment with another company outside Finmeccanica Group. He was replaced by Domenico Braccialarghe as a non-executive director, co-opted on 1 October 2014. The board of directors also appointed Mr. Braccialarghe Deputy Chairman.
He will remain in office until the next shareholders’ meeting called to approve the financial statements as at and for the year ended 31 December 2014.
|BOARD OF DIRECTORS IN OFFICE||RISK AND|
|APPOINTMENTS AND REMUNERATION|
|Office||Members||In office since||In office until||List|
under the Code
under the Cons.
|Presidente||SERGIO DE LUCA||15 april
|Shareholders’ meeting approving the 2016 financial statements||M||X(6)||-||-||-||100||1||-||-||-||-|
|1° october 2014(2)||Shareholders’ meeting approving
the 2014 financial statements
|Shareholders’ meeting approving
the 2016 financial statements
|Director||GIOVANNI CAVALLINI||15 april
|Shareholders’ meeting approving
the 2016 financial statements
|Director||GIULIO GALLAZZI||15 april 2014||Shareholders’ meeting approving
the 2016 financial statements
|Director||ALESSANDRA GENCO||15 april 2014||Shareholders’ meeting approving
the 2016 financial statements
|Director||BRUNO PAVESI||15 april 2014(5)
||Shareholders’ meeting approving
the 2016 financial statements
|Director||BARBARA POGGIALI||15 april 2014||Shareholders’ meeting approving
the 2016 financial statements
|Director||PAOLA PIERRI||15 april 2014||Shareholders’ meeting approving
the 2016 financial statements
(1) Co-opted by the board of directors pursuant to article 2386 of the Italian Civil Code on 14 June 2007 and subsequently confirmed by the shareholders on 1 April 2008 and 5 April 2011. On 11 December 2013, Mr. De Luca resigned from the office of CEO and was appointed Chairman of the board of directors with effect from 1 January 2014, confirmed by the shareholders on 15 April 2014.
(2) Co-opted by the board of directors pursuant to article 2386 of the Italian Civil Code on 1 October 2014 to replace Luigi Calabria, who was director and Deputy Chairman from 1 January 2014 to 1 October 2014.
(3) Co-opted by the board of directors pursuant to article 2386 of the Italian Civil Code on 11 December 2013, effective from 1 January 2014, to replace Mr. Grasso. Mr. Siragusa was not on any of the lists presented for the shareholders’ appointment of the board of directors on 5 April 2011.
(4) Appointed for his first term of office on 5 April 2011.
(5) Co-opted by the board of directors on 30 March 2012, replacing Filippo Milone, and subsequently confirmed by the shareholders on 7 May 2012.
(6) As Chairman of the board of directors from 1 January 2014, Mr. De Luca has not received any operating proxies. However, he is considered to be an executive director pursuant to the code of conduct as he has been the Operations general manager of Finmeccanica S.p.A., which manages and coordinates Ansaldo STS, since 1 January 2014.
(7) Mr. Braccialarghe was not on any of the lists presented for the shareholders’ appointment of the board of directors on 15 April 2014.
|BOARD OF DIRECTORS BY AGE AND GENDER||MEN||WOMEN|
|Directors who left during the year||Risk and|
|(%) **||Number of |
|15 April 2011(1)||1°October
|5 April 2011(2)||15 April
|5 April 2011||15 April
|5 April 2011||15 April
|5 April 2011(3)||15 April
(1) Mr. Calabria was appointed by the shareholders on 6 May 2013 as director and Chairman, replacing Mr. Pansa. On 11 December 2013, he stepped down from office as Chairman effective from 1 January 2014. Mr. Calabria was not on any of the lists presented for the shareholders’ appointment of the board of directors on 5 April 2011.
(2) Appointed for his first term of office on 14 June 2006 and subsequently confirmed by the shareholders on 1 April 2008 and 5 April 2011.
(3) Appointed for his first term of office on 24 March 2006 and subsequently confirmed by the shareholders on 1 April 2008 and 5 April 2011.
* This column indicates M/m, showing whether the member was elected from a majority (M) or minority (m) list.
** This column indicates the percentage of director participation in board and committee meetings respectively during the period considered (no. of meetings attended/no. of meetings held during the term of office).
*** This column indicates the number of director or statutory auditor positions that the person holds in other companies listed on regulated markets, including those abroad, in financial, banking, insurance or significantly large companies.
**** This column shows an “X” if the board member is on the committee.
Appointment of the board of directors
The company is managed by a board of directors consisting of at least seven and not more than 13 members. Before electing the board each time, the shareholders decide what the number of members will be within this range. The directors are appointed for a period of time not exceeding three years and can be re-elected pursuant to article 2383 of the Italian Civil Code.
In line with the amendments to the Consolidated finance act introduced by Law no. 120 of 12 July 2011, the current by-laws – following the most recent changes made by the shareholders at the extraordinary meeting of 6 May 2013 – provide for mechanisms to ensure a balance of men and women on the boards of directors and statutory auditors, which will be applied upon the first three renewals of the board of directors after one year following the date when the aforementioned law takes effect (i.e., after 12 August 2012).
The directors are appointed by the shareholders during an ordinary meeting by voting for lists.
Each list must include two candidates who meet the independence requirements provided for by law, indicating them separately and placing one at the top of the list.
Furthermore, lists with a number of candidates equal to or more than three must include candidates of different genders, in accordance with the notice of call of the shareholders’ meeting, so that the new board of directors is comprised of members of the least represented gender, in accordance with current legislation. In the event of fractions, the number is rounded up. If these obligations are not met, the list is considered as not having been submitted.
In order to ensure the effective participation of noncontrolling owners in corporate management and the transparency of the selection and appointment process for directors, the by-laws explicitly enable each shareholder to submit or participate in the submission of one list only, that each candidate can be presented in one list only or will be considered ineligible andv that each rightful voter can ote for one list only.
The shareholders elect the Chairman of the board of directors, selecting the Chairman from among the members of the board. If the shareholders do not elect the Chairman, the Chairman is elected by the board itself. The board can also elect a Deputy Chairman, replacing the Chairman when the Chairman is absent or unable to chair the board.
For additional information on the appointment of the board of directors during the ordinary shareholders’ meeting of 15 April 2014, reference should be made to the following page on the company’s website4.
Directors’ requirements and duties
Under the by-laws, in order to take office as director, one must not only meet the requirements of honourableness provided for by current legislative and regulatory provisions (or any similar requirements established by equivalent provisions), but must also meet the specific requirements of professionalism indicated in the bylaws.
In particular, candidates may not be appointed director of the company, and if they have been appointed, their term of office is considered immediately terminated, if they do not have at least three years of overall experience in the following:
- administration or supervision activities or managerial duties with companies with a share capital of at least €2 million;
- professional activities or university teaching as a full professor of legal, economic, financial or technical/ scientific subjects closely related to the company’s business activity; or
- management functions with public bodies or administrations active in the credit, financial and insurance sectors or, in any case, in industries which are closely related to the company’s business activity.
Non executive directors
The board of directors is mainly comprised of nonexecutive members (who have not been assigned any operating powers and/or management functions within the company) to guarantee, given the number of such directors and their degree of authority, that their judgment significantly influences board decisions.
Non-executive directors bring their specific expertise to the table in board discussions, to support the examination of the matters considered from a different perspective and to encourage the adoption of wellpondered resolutions, in line with the company’s interests. At present all members, except for the CEO and Chairman, are non-executive.
Independence of directors
In the implementation of the provisions of the code of conduct, following the appointment of the directors, i.e. after 15 April 2014, and on the basis of the statements made by each and available to the company, the board of directors has evaluated whether the independent directors are party to any relationships that could, or that could appear to, jeopardise their independent judgment. The findings of this evaluation were disclosed to the market in a press release on 15 April 2014.
Subsequently, on 16 December 2014, on the basis of the documentation submitted by each independent director, the board reviewed whether they still met the independence requirements provided for by the current legislative and regulatory provisions and pursuant to article 3 of the Code. In their review, the board applied all Code criteria.
At the same time, on the basis of the statements made by the directors and considering the board’s findings, the board of statutory auditors certified the board’s evaluation of the independence of its members in accordance with the criteria.
The independent directors met on 16 December 2014.
Board of directors activities and assessment of its functioning
In 2014, the board held 12 meetings. Any absences were duly justified. The average length of the board’s meetings in 2014 was approximately two and a quarter hours.
The meetings of the board of directors saw the participation, depending on the items on the agenda, of the Chief Financial Officer, the Chief Operating Officer, the Internal Audit Manager and, upon the Chairman’s recommendation, other company managers,in order to provide suitable details on the items on the agenda.
In 2014, the secretary to the board and Corporate Affairs & Company Insurance function manager participated in all the board meetings.
In accordance with the by-laws, the board of directors meets whenever the Chairman, or another member in his place, deems it necessary, or upon the written request of the majority of board members.
In 2014, Ansaldo STS’ board of directors conducted the first evaluation of the board and committees of its mandate, which was the ninth time it was carried out.
The evaluation process was carried out in accordance with the recommendations of article 1.C.1.g) of Borsa Italiana’s code of conduct for listed companies, and in line with international best practices. For 2014 and based on its experience gained in previous years, the board decided not to use the services of external consultants. It performed its self-evaluation of both the board and its committees assisted by the secretary to the board using a questionnaire that focused on several aspects such as the size, composition and working of the board and its committees.
Like in 2013, the main aspects evaluated were: (i) the adequacy of the number of directors and the board’s composition considering the professional qualifications, experience (including managerial), gender and seniority of its members and whether they are executive, non-executive or independent; (ii) the board’s strategic and operational monitoring role, its support role and its responsibilities and duties, as perceived by the directors and management; (iii) the organisation, flow of information, quality of board meetings and how decisions are taken; (iv) the usefulness and frequency of additional board induction meetings; (v) the board’s relations with management; (vi) assistance given to the board and its committees by its secretary and her staff; (vii) the roles, duties and working of the board committees; (viii) the directors’ assessment of the board’s performance.
On 6 March 2015, the board of directors analysed and discussed the results of the self-evaluation and confirmed its overall positive results.
In order to increase the efficiency and effectiveness of the work of the board of directors, the risk and control committee and the appointments and remuneration committee have been established within the board and in accordance with the criteria of the code of conduct that the company has implemented.
In this respect, following the approval of the new code of conduct in December 2011, the company approved the adoption of the principles in the updated Code, thereby updating its corporate governance system to meet the new provisions.
Specifically, on 18 December 2012, the company decided, inter alia: (i) to set up an appointments committee, companying it together with the previously established remuneration committee and naming the new committee - vested with the dual function
- the “appointments and remuneration committee”, approving its regulation; and (ii) modifying and redefining the duties and functions of the different parties involved in the company’s internal control and risk management system, also aligning their names with the new code of conduct. In this context, in particular, the board named the internal control committee the “risk and control committee” and approved its regulation.
Risk and control committee
The risk and control committee currently in office is comprised of three directors, who are all non-executive and independent. They are the directors Giovanni Cavallini (Chairman), Paola Pierri and Barbara Poggiali, appointed by the board of directors on 15 April 2014.
Pursuant to the Code, at the time of their appointment, the board of directors examined the accounting and financial experience of its Chairman, Giovanni Cavallini, and the members Paola Pierri and Barbara Poggiali.
The committee meetings are governed by an internal regulation which was last modified by the board on 18 December 2012, in accordance with the new code of conduct dated December 2011. The regulation, in its updated version, is available on the company’s website5.
The risk and control committee has advisory, proposal and preliminary preparation functions on behalf of the board of directors, mainly in relation to the definition of guidelines for the internal control and risk management system and the periodic evaluation of the adequacy and effective functioning of the organisational structure of that system.
Specifically, the committee is responsible for verifying the functioning and adequacy of the internal control and risk management system, as well as the effective compliance with procedures and internal directives adopted to both ensure sound and efficient management and identify, prevent and manage, insofar as possible, financial, operational and fraud risks to the detriment of the company.
Appointments and remuneration committee
In accordance with the provisions of article 37 of the market regulation, all members of the appointments and remuneration committee are non-executive and independent.
The committee members appointed by the board of directors on 15 April 2014 are the non-executive and independent directors Bruno Pavesi (Chairman), Giovanni Cavallini and Giulio Gallazzi.
In accordance with article 6.P.3 of the code of conduct, when the committee members were appointed, the company’s board of directors verified and certified that the directors had accounting and financial expertise and experience.
The committee’s activities are governed by a regulation in line with the code of conduct. The board approved the regulation on 29 January 2007 and it was later modified on 12 May 2008, 5 March 2012 and 18 December 2012.
The regulation is available on the company’s website6.
With respect to the functions attributed to the committee by the code of conduct for both its role in the appointment of directors and remuneration, reference should be made respectively to articles 5 and 6 of the code, which can be found on the Borsa Italiana S.p.A. website7.
Information on the remuneration of key managers is given in the remuneration report, which is prepared pursuant to articles 123-ter of the Consolidated finance act and 84-quater of the Issuers’ regulation, published on the company’s web site8 and made available to the public in the other ways provided for by current legislation. On 20 February 2014, the company’s board of directors, with the prior approval of the appointments and remuneration committee, approved the company’s remuneration policy for 2014 and Ansaldo STS’ remuneration report, prepared pursuant to article 123-ter of the Consolidated finance act. The first section of the report illustrates the company’s remuneration policy and the procedures followed to adopt and implement this policy and it was therefore put to a non-binding vote by the shareholders on 15 April 2014, in accordance with article 123-ter.6.
The shareholders approved the report.
Furthermore, on 25 March 2015, upon the proposal of the appointments and remuneration committee, the board of directors approved the remuneration policy for 2015.
On the same date, the board of directors approved, with the prior approval of the appointments and remuneration committee, the remuneration report pursuant to article 123-ter of the Consolidated finance act. In accordance with the aforementioned article 123-ter.6 of the Consolidated finance act, at the ordinary shareholders’ meeting held on 23 April 2015, they were asked to take a non-binding vote on the first section of the remuneration report, which illustrates the remuneration policy for members of the board of directors, the general manager and key management personnel and on the procedures used to adopt and implement this policy. The shareholders voted in favour of the policy.
With respect to the remuneration of Ansaldo STS’ directors for 2014, reference should be made to the second section of the remuneration report approved by the board of directors on 25 March 2015, available on the company’s web site9.
Board of statutory auditors
The statutory auditors are appointed by the shareholders during an ordinary meeting by voting for lists.
In line with the amendments to the Consolidated finance act introduced by Law no. 120 of 12 July 2011, the current by-laws – following the most recent changes made by the shareholders at the extraordinary meeting of 6 May 2013 – provide for mechanisms to ensure a balance of men and women on the boards of directors and statutory auditors, which will be applied upon the first three renewals of the board of statutory auditors after one year following the date when the aforementioned law takes effect (i.e., after 12 August 2012).
As with the presentation of lists of candidates for the appointment of members of the board of directors, if a list of candidates for the office of statutory auditor is not submitted within the above term, the lists will be considered as not having been submitted.
The lists include the names of one or more candidates, and their number may not exceed the number of members to be elected. Each candidate can be presented in one list only or will be considered ineligible. Lists are divided into two sections: one for candidates for the office of standing statutory auditor and one for candidates for the office of substitute statutory auditor. The first candidate in each section must be registered with the roll of certified auditors and have at least three years of experience in the performance of legally-required audits.
Furthermore, the lists that, considering both sections, include a number of candidates equal to or greater than three must also include, for both the first two candidates on the list for standing statutory auditors and the first two candidates on the list for the replacement statutory auditors, candidates of different genders.
The Chairman of the board of statutory auditors is the standing statutory auditor elected by the minority, unless only one list is voted for or no list is submitted.
In these cases, the shareholders appoint the Chairmanof the board of statutory auditors according to the legal majorities.
The current board of statutory auditors was appointed by the shareholders in their ordinary meeting of 15 April 2014 and it has three standing statutory auditors and three substitute statutory auditors.
The standing statutory auditors are Giacinto Sarubbi (Chairman), Renato Righetti and Maria Enrica Spinardi.
During the year, the board held 13 meetings. It held three meetings between the start of 2015 to the date of this report.
The following table provides information on the attendance of each statutory auditor at the meetings of the board of statutory auditors and the board of directors in 2014:
Board of Statutory Auditors in office
|Members||Board of statutory auditors attendance||Board of directors attendance|
|Giacinto Sarubbi (Chairman)||100%||100%|
|Maria Enrica Spinardi *||100%||100%|
* in office since 15 April 2014.
|Standing statutory auditors|
in office since 1/1 to 15/04 April 2014 - Members
|Board of statutory auditors attendance||Board of directors attendance|
The board of statutory auditors is responsible for monitoring:
- compliance with the law and by-laws;
- compliance with the principles of correct administration;
- the adequacy of the company’s organisational structure in the areas for which it is responsible, the adequacy of the internal control system and the administrative/accounting system, and the latter’s reliability in correctly reflecting operations;
- the actual implementation method of the corporate governance rules established by the codes of conduct prepared by the companies that manage regulated markets or trade associations, with which the company is required to comply through public disclosure;
- the adequacy of the company’s instructions to its subsidiaries pursuant to article 114.2 of the Consolidated finance act;
- the financial disclosure process;
- the efficiency of internal control, internal audit and risk management systems;
- the legally-required audit of the annual separate and consolidated financial statements;
- the independence of the independent auditors or independent audit company, particularly with respect to the provision of non-audit services to the company;
- the compliance of the company’s related partytransaction procedures with the principles of the related-party regulation and their compliance, reporting to the shareholders in this respect pursuant to article 153 of the Consolidated finance act.