Role of the Board of Directors

The Company Bylaws do not envisage a minimum interval between Board meetings.
Pire lli has circulated a calendar that schedules 4 meetings for the 2012 financial year:

  • March 12, 2012: Board of Directors’ meeting to examine the draft financial statements and the consolidated financial statements as of December 31, 2011;
  • May 10, 2012: Board of Directors’ meeting to examine the interim report on operations as of March 31, 2012;
  • July 26, 2012: Board of Directors’ meeting to examine the half-yearly financial report as of June 30, 2012;
  • November 7, 2012: Board of Directors’ meeting to examine the interim report on operations as of September 30, 2012.

The Board of Directors’ meetings may be convened using telecommunications media which enable all the persons in attendance to participate in the discussion and to have equal access to information.

The Board of Directors’ meetings are convened by letter, telegram, telefax or e-mail to be sent to each Director and Statutory Auditor at least 5 days in advance (or in case of urgency, at least 6 hours in advance) compared to the date of the meeting.

Directors and Auditors have always received the necessary documentation and information with sufficient notice in order to express their informed opinion on the matters submitted to their examination.

In the limited and exceptional cases in which it has not been possible to transmit the documentation with adequate notice, complete information concerning the matter to be examined was provided during the Board Meeting, thereby assuring informed resolutions were passed.

By way of confirmation, it is important to note that the Board’s self-evaluation process confirmed (as in the previous financial years) the Directors’ complete satisfaction concerning the pre-Board meeting information process for the purpose of passing informed resolutions.

Functions of the Board of Directors

The Board of Directors plays a central role in the strategic guidance, as well as in supervising the Company’s overall business activities, with the power to direct the overall administration and the power to intervene directly in the decisions necessary or useful to achieve the company purpose.

The Board of Directors represents the body responsible for making the most important decisions in terms of the economic/strategic aspects or in terms of the structural impact on operations or functional to exercising Pire lli’s policymaking and control activity.

In particular, the Board of Directors16:

  • examines and approves the strategic, industrial and financial plans of the Company and of the Group;
  • draws up and adopts the Company’s corporate governance rules and defines the Group’s corporate governance guidelines;
  • defines the guidelines for the internal control system and appoints a Director designated to supervise the internal control system, defining the respective duties and powers;
  • supervises the risk management process, defining the acceptable overall risk threshold (so-called risk appetite);
  • evaluates the adequacy of the general organisational, administrative and accounting structure of the Company and of the subsidiaries of strategic importance;
  • establishes one or more Board Advisory Committees, appointing the members and establishing the duties, powers and fees;
  • confers and revokes the powers on the Managing Directors and on the Executive Committee – if established – defining their limits and operating procedures; also establishes the frequency, however, not more than on a quarterly basis, with which the delegated bodies are to report to the Board concerning the activity performed when exercising the powers of attorney;
  • defines the general remuneration policy;
  • determines the remuneration of the Managing Directors and the other Directors who have special duties after having examined the proposals submitted by the Remuneration Committee and after consulting with the Board of Statutory Auditors, as well as subdividing the total remuneration due to the Board Members, if the Shareholders’ Meeting has not already resolved this aspect;
  • evaluates the general operating performance, in particular, taking into consideration the information received from the delegated bodies, as well as periodically comparing the results achieved with the planned results;
  • examines and approves in advance the transactions involving the Company and its subsidiaries, when such transactions have a significant strategic, economic, equity or financial impact;
  • evaluates the size, composition and operation of the Board and its Committees, at least once a year, possibly expressing opinions concerning the professional figures whose presence on the Board is deemed appropriate;
  • establishes the Supervisory Body, pursuant to Legislative Decree No. 231 dated June 8, 2001;
  • appoints the General Managers and the Director responsible for preparing the Company’s accounting documents, determining their responsibilities and powers and identifies the Directors with strategic responsibilities;
  • appoints and revokes the internal control officer based on the proposal made by the Director appointed to supervise the internal control system and determines the Officer’s duties and remuneration, after having heard the opinions of the Committee for Internal Control, Risks and Corporate Governance and the Board of Statutory Auditors;
  • assesses and approves the periodic statement documentation envisaged by the applicable laws and regulations;
  • assesses and approves the transactions with related parties, in accordance with the conditions envisaged by the Procedure for Transactions with Related Parties;
  • prepares the proposals to be submitted to the Shareholders’ Meeting;
  • exercises the other powers and fulfils the duties assigned to it by law and by the Company Bylaws.

16 Self-Regulatory Code: Application criterion 1.C.1., sub-section a).