Assessment of the Board of Directors activity

In compliance with the Governance Code published by Borsa Italiana, Terna’s Board of Directors also for 2011 assessed the Board size, composition and performance, as well as that of its Committees. The Board conducted such assessment, drawing on the assistance of the company Egon Zehnder International S.p.A. as an external consultant to ensure the utmost objectivity of its evaluations. This initiative follows similar ones that were undertaken by Terna’s Board of Directors as of 2006.

The independent consultant’s analysis started during the first quarter of 2012 and carried out through qualitative questionnaires and individual interviews with each Director and through subsequent quantitative and qualitative analysis of the information gathered, focused on various aspects regarding: a) the decision-making process; b) the flow of information and presentations; c) participation in the definition of a strategic direction and d) the atmosphere inside the Board and relations with the Chairman and the CEO. Such analysis highlighted how Terna’s Board of Directors is totally in line with the Governance Code to the point that it fully represents a best practice both at the Italian and international level, confirming the positive judgment that there was compliance with said requirements.

On the basis of the results of the analysis carried out, the Board of Directors passed an overall positive evaluation on the size, composition and performance of the Board and its Committees having positively evaluated all the principal profiles examined and committed to exercising their role as best as possible.

In particular, the Board deemed that the new Board’s operation during 2011 confirmed its high efficiency level and the general trend to continuously improve some organizational issues, which constitute the excellence of the Board. In particular, it acknowledged improvements in: internal cohesion and independence for the Board; stronger support by the Board to Top Management and attention to investment projects; enhancement of internal Board Committees; effectiveness in the information process between the Chairman, the CEO and Board members.