The corporate governance of Saipem SpA is based on international best practice standards and, in particular, on the principles of the Corporate Governance Code (hereafter Code) of listed companies approved by the Corporate Governance Committee, in addition to all relevant provisions of regulations issued by Italy’s Securities and Exchange Commission (Consob).
At their meeting of December 14, 2006, the Board of Directors moved to adopt the recommendations and principles of the current Code, in compliance with a similar resolution taken on November 9, 2000, and to monitor its actual implementation.
At their meeting of December 13, 2011, the Board of Directors resolved on the implementation of Article 6 of the Corporate Governance Code, as modified in March 2010, and following the publication of a new version of the Corporate Governance Code of Listed Companies in December 2011.
Having adopted the Code, the Board of Directors approved a number of resolutions implementing and specifying the provisions contained therein. Specifically: (i) the functions of the Board of Directors have been redefined. The Board maintains an absolutely central position with respect to the corporate governance system of the Company and retains wide-ranging responsibilities, particularly in terms of Company and Group organisation and the internal control and risk management system; (ii) the most significant transactions by the Company and the Group have been defined and presented for approval by the Board; (iii) the Board of Directors has a key role in defining sustainability policies and approving the Sustainability Report, which are also submitted to the Shareholders’ Meeting; (iv) the Board of Directors is responsible for transactions with related parties of greater importance, pursuant to the relevant Consob Regulation, granting independent Directors a pivotal role and providing that the Board be informed of transactions with related parties, even if of lesser importance; (v) a threshold has been identified for the cumulation of offices that Directors are allowed to hold in other companies, so as to ensure that they have the necessary time required to fulfil their roles; (vi) pursuant to the new Corporate Governance Code of December 2011 adopted by Saipem, the following Committees were set up on February 13, 2012: the Compensation and Nomination Committee, and the Audit and Risk Committee; comprised entirely of independent and non-executive Directors, these Committees are in full compliance with the requirements of Article 4 of the Corporate Governance Code.
At their meeting of February 13, 2012, the Board of Directors resolved to take responsibility for guiding, coordinating and evaluating the adequacy of the Internal Control and Risk Management System. It also entrusted the CEO of the Company with ensuring the continuous effectiveness of this system, with the support of the Audit and Risk Committee, pursuant to Article 7 of the new Code.
To implement other recommendations of the Code, the Board of Directors, at their meeting of January 8, 2013, approved adherence to the following basic principles: (i) taking into account the Board review evaluating the function, size and composition of the Board and its Committees, it will recommend to the Shareholders’ Meeting, before the appointment of the new Board of Directors, the professional profiles that are deemed appropriate in the Board; (ii) from the next appointment of the Board of Directors, the CEO shall not hold another directorship at any listed company outwith the Group whose CEO is a Saipem Director; (iii) having evaluated the opinions of the Board of Statutory Auditors and the Audit and Risk Committee, the Board of Directors shall review the results expressed by the Audit Company in their recommendation letter and in their audit report.
Furthermore, the Audit and Risk Committee drafted the document entitled ‘Saipem SpA Board of Directors’ Guidelines on Internal Audit’ detailing guidelines for the CEO in matters of Internal Audit and complementing the guidelines on the Internal Control and Risk Management System which are also within the remit of the Board of Directors. This document, approved by the Board of Directors on January 8, 2013, updates the previous guidelines approved by the Board on April 22, 2009 and implements the Code’s recommendations in terms of roles, responsibilities, goals and reporting of the Internal Audit function.
This annual Corporate Governance Report was prepared, as in previous years, utilising the format of Borsa Italiana SpA (4th Edition - January 2013)5. The Company strived to provide correct, exhaustive and effective information consistent with the characteristics of its business activities and corporate objectives, and in line with market requirements.
Saipem SpA and its subsidiaries are not subject to any non-Italian legal requirement that may influence the Corporate Governance of the Issuer.
Saipem corporate governance additional practices
In the context of the management and organisational changes which occurred in 2013, Saipem launched a programme of measures aimed at strengthening its internal control and risk management systems.
Specifically, these measures represented a wide ranging effort to ensure the systems’ continuous alignment with national and international best practices through the adoption of internal regulations.
Main objectives were:
- strengthening risk management practices and involvement of the Company’s top management;
- strengthening independent monitoring:
- increasing control over Group companies;
- support and coordination of governance improvement initiatives;
- balanced allocation of powers and proxies, and clarity of roles and responsibilities.
The most important initiatives put in place can be summed up as follows:
- creation of the ‘Governance Improvement’ team, whose responsibility is to monitor Saipem’s governance system in connection with specific intervention areas previously identified by the top management;
- setting up an Executive Committee responsible for informing and supporting the CEO in business decisions, as well as economic, financial, compliance and risk management issues;
- setting up a Compliance Committee responsible to ensure that all compliance and governance issues are identified and addressed;
- setting up a Technical Committee responsible for ensuring that, within Saipem’s regulatory system, all compliance and governance issues are properly addressed;
- setting up the Risk Committee, advising the CEO on management of main risks;
- definition and implementation of the process and the new Integrated Risk Management structure, aimed at ensuring maximum effectiveness and efficiency in risk management and at having an overview of corporate risks;
- review and reorganisation of the Internal Audit function;
- review of the organisational model of the E&C Business Unit through the implementation of business lines with profit & loss as well as regional accountability, that should ensure cross-product local integration;
- definition and implementation of the new External Communication & Industrial Relations department;
- rotation of several senior managers;
- mapping business processes, support, compliance and corporate governance processes, identification of the Process Owner figure, responsible for developing an adequate body of rules relating to the specific process;
- review of the main guidelines of Saipem’s regulatory system with the issue of the Management System Guideline ‘Regulatory System’ based on the Process Owners’ responsibilities, promoting the integration of compliance principles for processes, and the autonomy of subsidiary companies;
- review of the process for the allocation of powers and proxies, issuing ad-hoc Corporate Standards based on task segregation and balance of powers;
- issuing of the authorisation matrix for Saipem SpA, Saipem Branches, Subsidiaries and their Branches, identifying processes and activities deemed to be highly sensitive;
- review of the process for the appointment of Directors at Subsidiary Companies, aimed at optimising the composition and balance of competencies and expertise; review of regulations and criteria used to determine the composition of Compliance bodies/officers at foreign subsidiaries, proposing a new dedicated governance model;
- review of the continuous alignment of the internal anti-bribery regulations to best practices and ongoing training of personnel;
- review of procedures for the appointment of sub-contractors and vetting of suppliers; complete review of standard contractual clauses in matters of procurement.
(5) The Corporate Governance Report format of Borsa Italiana SpA, 4th Edition (January 2013), is available at www.borsaitaliana.it.