Company organization

In compliance with the provisions of the Italian legislation concerning listed companies, the Company’s organization based on the traditional administration and management model - includes the following:

  • a Board of Directors responsible for the Company management. To such aim, the Board is entrusted with the widest powers so as to complete all the actions that deems appropriate for the performance and the attainment of the Corporate purpose, excluding only the action that the Law and the Bylaws reserve to the Shareholders’ Meeting;
  • a Board of Statutory Auditors responsible for monitoring: (i) that the Company complies with the Law, the Bylaws and the principles of correct administration in performing Company activities, (ii) the adequacy of the Company’s organizational structure, Internal Control System and administrative/accounting system as well as those of the foreign subsidiaries outside of the EU. It is also responsible for carrying out all duties assigned to the Board of Statutory Auditors by Law and by the Governance Code; according to Article 19 of Legislative Decree 39/2010, it is the responsibility of the Board of Statutory Auditors to supervise the financial information process, the efficiency of the internal control systems, of internal reviews and risk management, the auditing of annual and consolidated results pursuant to law provisions and the independence of the auditing company.
  • the Shareholders’ Meeting – ordinary and extraordinary – that resolves upon, inter alia, (i) the appointment and revocation of members of the Boards of Directors and Statutory Auditors and their fees and duties, (ii) the approval of the Financial statements and allocation of the profits for the year, (iii) the purchase and sale of treasury shares, (iv) amendments to the Bylaws, and (v) the issuance of convertible bonds; (vi) authorizations for actions carried out by Directors concerning Transactions with Related Parties for which there was no favorable opinion by the competent independent body, in compliance with governing regulations and based on procedures adopted by the Board of Directors as well as on urgent transactions submitted by the Directors to an advisory vote of the Shareholders’ Meeting, and (vii) during consultations pursuant to Article 123 ter, paragraph 6 of the Consolidated Law on Finance, on Company Policy on matters of remuneration of members of administration bodies, of general directors and of executives with strategic responsibilities;
  • an Executive in Charge of the preparation of the Company’s accounting records, who is given all assignments and responsibilities provided by the Law and regulations as well as those provided for by the Governance Code (Article 8.C.3).

Statutory auditing activities are entrusted to a specialized company enrolled in a specific register, which is appointed by the Shareholders’ Meeting on proposal by the Board of Statutory Auditors.
Terna’s Auditors also have similar engagements with the Company’s main subsidiaries.
It has been some time since the Organizational Model adopted by the Company pursuant to Legislative Decree no. 231/01 - which was recently updated based on the provisions of Legislative Decree 39/2010 - has provided that the auditing of the Company’s Financial statements and that of any company of the Group and of the Consolidated financial statements is not compatible with consultancy activities for Terna or any company of the Group, extending to all network of the audit company as well as to shareholders, Directors, members of control bodies and employees of the audit company and of the other companies belonging to the same network. The assignments to the audit company are submitted to Terna’s Internal Control Committee for any assignment other than the one given under Law provisions, in any event related to auditing activities. In order to ensure independence of the company and of the officer in charge of auditing, the assignment for the auditing of the Company’s Financial statements and that of any company of the Group and of the Consolidated financial statements is not in any case given to audit companies that fall within one of the incompatibility situations pursuant to Article 17 of Legislative Decree no. 39/2010 and to Part III, Title VI, paragraph I-bis of the “Regulations implementing Legislative Decree no. 58 dated February 24, 1998, regarding the law on issuers” adopted by CONSOB (Issuer Regulations).

The Shareholders’ Meeting held on May 13, 2011 approved the amendments to Articles 9.1 and 13 of the Company Bylaws for adapting, respectively, the provisions introduced by Article 1 of Legislative Decree no. 27 dated January 27, 2010 and for implementing the Procedure on Transactions with Related Parties pursuant to “Regulation containing provisions concerning transactions with related parties” (adopted by CONSOB with its resolution no. 17221 dated March 12, 2010 and subsequently amended by resolution no. 17389 dated June 23, 2010). The primary amendments regard: (i) the possibility for the Board of Directors to exercise the right to convene a Shareholders’ Meeting on a single date, in place of the traditional first, second and (in the case of extraordinary Shareholders’ Meetings) third calls; and this without prejudice to the rule, which then became residuary, for multiple calls, if the Board decided not to exercise said right; (ii) the introduction into the Bylaws of the provisions necessary to attribute full effectiveness to the “Procedure on Transactions with Related Parties” adopted by Terna according to the provisions in “Regulations containing provisions concerning transactions with related parties” adopted by CONSOB.