Saipem is committed to maintaining and reinforcing a system of Governance that is in line with the standards of international best practices and is suited to the complexity of the Company’s make-up. A brief description of the Company’s governance structure is given below. Further details are available in the document ‘Corporate Governance and Shareholding Structure Report 2013’ [CGR 2013], in the ‘Compensation Report’, in the Code of Ethics and in the Governance section of the Company’s website.
Governance structure of the organisation
Saipem’s organisational structure is characterised by the presence of a Board of Directors, a pivotal body in the governance system, to which management of the Company is exclusively entrusted.
Supervisory functions are the responsibility of the Board of Statutory Auditors, whereas external auditors are in charge of the legal auditing of accounts. The Shareholders’ Meeting manifests the will of the shareholders through resolutions adopted in compliance with the law and the Company’s Articles of Association. The current Board of Directors is made up of 9 members, of whom 8 are non executive and 6 are independent. Two committees with advisory and consulting functions have been set up within the Board of Directors. These are the Audit and Risk Committee, consisting of 3 independent non-executive members, and the Compensation and Nomination Committee, likewise made up of 3 independent non-executive members.
Dialogue with shareholders
Communications with shareholders are ensured by the manager of the Secretary’s Office and any information that is of interest to them is made available on the Saipem website or can be requested via e-mail by writing to: firstname.lastname@example.org.
To protect minority interests, one Statutory Auditor and one Alternate Statutory Auditor from the Board of Statutory Auditors are chosen from among the candidates put forward by minority shareholders. The Shareholders’ Meeting appoints the Chairman of the Board of Statutory Auditors from the list put forward by the minority shareholders.
More generally, information is guaranteed by means of ample documentation made available to investors, the market and the press on the Saipem website. It is further ensured by means of press releases, periodical meetings with institutional investors, the financial community and the press. Saipem employees have a number of dedicated information channels available, including the intranet portal, the quarterly magazine ‘Orizzonti’ and a large number of newsletters and local magazines.
Furthermore, information and dialogue channels provided for under agreements with the trade unions are ensured within the industrial relations system so that all employees receive timely information, are consulted and can participate.
Saipem provides employees and stakeholders with an information channel – overseen by the Compliance Committee in a way that ensures confidentiality and prevents any form of retaliation – through which it is possible to report any problems related to the internal control system, financial reporting, corporate administrative liability, fraud or other topics (i.e. violations of the Code of Ethics, mobbing, theft, security, etc.).
Compensation of the CEO and of Senior Managers with strategic responsibilities comprises a fixed component and an annual variable component. The latter is set with reference to Saipem’s yearly objectives in terms of new contracts, investments and backlog, adjusted EBITDA and sustainability.
For issues relating to the compensation of Directors, Statutory Auditors and Senior Managers with strategic responsibilities, see the ‘Compensation Report’, available to the public at Company headquarters and in the ‘Corporate Governance’ section of the Company website www.saipem.com.
Transparency and correctness
The Saipem procedure ‘Transactions involving interests held by Board Directors and Statutory Auditors and Transactions with Related Parties’ (available at www.saipem.com in the ‘Corporate Governance’ section), which aims to ensure transparency as well as substantive and procedural correctness in transactions with other parties, was approved in 2010 and amended by the Board of Directors on March 13, 2012.
Requirements for Board membership
Directors shall meet the honourability requirements prescribed by regulations, possess the professional expertise and experience to carry out their mandate efficiently and effectively, and be able to dedicate sufficient time and resources to their offices. In compliance with the Corporate Governance Code, the Board of Directors carries out a yearly Board Review on the size, composition and level of functioning and efficiency of the Board and its Committees. To this end, it avails of the assistance of a specialist external consultant.
Mission, values and codes of conduct
Clear recognition of the Company’s values and responsibilities is a foundational element of Saipem’s relations with its stakeholders.
The following principles, further underscored in the Company’s Mission Statement, are applied universally throughout Group operations. Compliance with the law, regulations, statutory provisions, self-regulatory codes, ethical integrity and fairness, is a constant commitment and duty of all Saipem people when carrying out their duties and responsibilities. Alongside a commitment to transparency, energy efficiency and sustainable development, these principles characterise the conduct of the entire organisation. The Code of Ethics clearly defines the values that Saipem recognises, accepts and shares, as well as the responsibilities the Company assumes towards internal and external parties.
In order to guarantee the achievement of business objectives, the Board of Directors has so far approved the following Policy documents: ‘Our People’; ‘Our Partners in the value chain’; ‘Global Compliance’; ‘Corporate Governance’; ‘Operational Excellence’; ‘Our Institutional Partners’; ‘Information Management’; ‘Our tangible and intangible assets’; ‘Sustainability’; ‘Integrity in our operations’. As shown in this document, the results of the Company and its subsidiaries in the social, environmental and economic spheres testifies to the degree to which the aforementioned principles have been implemented.
Performance management and assessment
The Board of Directors receives from the delegated directors, at the Board meetings and, in any case, at least once every three months, a report on the activity carried out in the exercise of the delegated duties, on the Group’s activity and on major transactions carried out by the Company or its subsidiaries, and approves the Strategic Plan which, alongside specifically economic and financial themes, includes objectives related to the sustainability aspects of Saipem’s business.
The main risks referable to the HSE area are identified, monitored and managed by Saipem through an Integrated HSE Management System based on yearly planning, implementation, control, review of results and setting of new targets. The performance is presented and discussed at each meeting of the Board of Directors, which subsequently issues operative instructions. Furthermore, as part of the implementation of the policy of maximising Local Content, and with regard to the management of the Company’s personnel, the Board of Directors is likewise informed, when needed, of the Company’s social performance.
In accordance with international best practices and in compliance with the Stock Exchange Code, the Board of Directors of Saipem annually conducts a Board Review on the size, composition and functioning of the Board of Directors and its committees and may provide advice on professionals whose presence on the Board it deems to be appropriate.
Every four months, the Sustainability Committee, chaired by the CEO, is presented with the main performance results and activities underway as regards sustainability. The Committee then supplies guidelines and approves the activity plan. The Committee is also informed about, and provisionally approves, the external report on the year’s sustainability performance, which is subsequently approved formally by the Board of Directors concurrently with the Annual Report.
Having consulted with the Audit and Risk Committee, on July 30, 2013 the Board of Directors approved the ‘Principles of Integrated Risk Management’. The Integrated Risk Management (IRM) process, characterised by a structured and systematic approach, requires that the risk principles be efficiently identified, assessed, managed, monitored, represented and, where possible, transformed into opportunities and competitive advantage. On the basis of the principles approved by the Board of Directors, Saipem developed and implemented a Model for the integrated management of Company risks. This is now an integral part of the Risk and Internal Control Management System. Defined in compliance with the principles and with international best practices, the Model follows an organic and concise vision of the risks to which the Company is exposed, greater consistency of methodologies and tools to support risk management, and strengthening of awareness at all levels to the effect that an appropriate assessment and management of risks of various types can have a positive impact on the achievement of objectives and on the Company’s value. To this end, the Model is characterised by the following elements:
- Risk Governance: represents the general framework as regards roles, responsibilities and information flows for management of the main Company risks. Roles and responsibilities under the risk governance model are divided into three separate levels of control;
- Process: represents the grouping of all activities through which the various actors identify, measure, manage and monitor the main risks that could influence Saipem’s ability to achieve its objectives;
- Reporting: reports and represents the results of the Risk Assessment, highlighting the most significant risks in terms of likelihood and potential impact as well as the plans for dealing with them.
Codes of conduct adopted
The Universal Declaration of Human Rights adopted by the United Nations, the Fundamental Conventions of the ILO (International Labour Organisation) and the OECD Guidelines for Multinational Enterprises, are fundamental principles on which Saipem bases its Code of Ethics and conducts its operations.
Saipem participates in numerous initiatives and associations that have as their main objective the sharing of best practices within their specific business sectors.
The methods adopted by the Company to identify, map and engage with stakeholders locally are described in the document ‘Saipem Sustainability 2013’. The main stakeholder engagement activities carried out in 2013 are outlined below.
Saipem has adopted a communications policy targeted at achieving constant dialogue with investors and systematic diffusion of comprehensive and timely information on Company activities. Information to investors and the market takes place through press releases, the periodical presentation of financial results and the broad documentation made available and constantly updated on the Company website, as well as periodical meetings with institutional investors and financial analysts. Shareholders are mainly involved through interfacing with the Company Secretary function. In 2013, management met the financial community during 17 Road Shows held in the main stock exchanges and at 5 financial conferences.
In 2013, Saipem provided a number of informative sustainability documents to EIRIS, VIGEO, Financière de l’Echiquier, Global Sustainability Rating, the Ethical Council and Storebrand. Saipem also took part in the Carbon Disclosure Project (CDP).
Reporting on operating projects is constant. Project Managers and project staff hold interviews and meetings and reply to the requests of Clients, who are often present on-site in day-to-day operations. Clients are also involved in HSE training initiatives, such as environmental awareness campaigns or the LiHS (Leadership in Health and Safety) programme. At the end of each significant project, and on an annual basis, the Client is asked for feedback using the Customer Satisfaction tool.
Furthermore, meetings with Clients or potential Clients are organised in pre-bid and bid phase and can involve a number of specific aspects such as Saipem’s approach to sustainability. In 2013, Saipem held numerous meetings with Clients to involve them in its sustainability strategy in South America, Canada, Saudi Arabia, Australia and Azerbaijan.
The Company also cooperated with Qatar Petroleum on the ‘Sustainable Development Industry (SDI) Reporting Qatar’.
Workers’ representatives and trade unions are involved in collective bargaining and in other forms of dialogue regarding specific local activities, including through periodical meetings. Management of Company employees is the responsibility of the Human Resources function on all Group operating sites, as described in the document ‘Saipem Sustainability 2013’. 2013 saw analysis of the results of the engagement survey launched at the end of 2012. This was targeted at Senior Managers, Middle Managers and Office Staff of Saipem SpA and Saipem UK Ltd. 6,292 employees were invited to take part in this survey, 75% of whom took up the invitation.
The overall result of Engagement in Saipem is 53%. The key questions of the survey were with reference to three behaviours: ‘Say, stay, strive’.
Around 400 young resources aged between 28 and 35 and with international experience of 3 to 5 years were subsequently involved and given the opportunity to submit some of their proposals to Saipem top management.
In Angola, employees, along with their spouses, partners and children, participated in the Little LiHS workshop. Personnel engagement and training activities on sustainability themes continued throughout 2013 with the organisation of thematic seminars and specific meetings with managerial functions.
As described in the document ‘Saipem Sustainability 2013’, each operating company or project has a specific approach to relations with local communities. This takes into account both the role of Saipem and the socio-economic and cultural context in which the Company operates. Many initiatives involving local communities were held during 2013. In Kazakhstan, a public meeting was held with the population of Kuryk village to present and discuss the Ersai sustainability plan. On that occasion, several local stakeholders were identified to supervise and monitor the execution of activities. This was done in order to strengthen the sense of responsibility for success as well as recognition of these initiatives on the part of the community.
In Nigeria, relations with local communities are defined and regulated in Memorandums of Understanding (MoU) signed by the Company, the Client (for projects) and representatives of the communities affected by operations. Other local community initiatives and projects were held in the Congo, Colombia, Kazakhstan, Indonesia, Peru, Venezuela, Mexico, Angola and Brazil (for further details see ‘Saipem Sustainability 2013’).
Governments and local authorities
Engagement with governments and, above all, local authorities is defined in relation to the circumstances in which Saipem operates, taking into consideration the specificities of the country and the social context. Alongside institutional and official relations with the authorities, Saipem cooperates with public bodies for the launch of initiatives in favour of local communities and local areas. In this regard, Saipem collaborates with local government health entities, hospitals and medical centres to implement projects targeted at raising awareness of diseases such as Malaria and AIDS in the Congo and Nigeria, as well as with environmental protection bodies in the Congo and Kazakhstan. In 2013, cooperation with the Municipality of Guarujá in Brazil proceeded apace following the signing of the ‘Declaration of Intent’. Saipem works with local institutions such as schools and universities, including through specific partnership agreements in order to contribute to the development of an education system that meets the needs of the private sector, with particular reference to the Oil&Gas industry. Numerous initiatives are underway in Algeria, Kazakhstan, Italy, the Congo, Indonesia, Azerbaijan and Colombia in this regard.
Local organisations and NGOs
Saipem collaborates with organisations or NGOs, above all at local level, and at times through specific partnership agreements, with the aim of implementing community initiatives tailored to the area’s specificities and main problems. Cooperation with local NGOs is for the most part in the Congo and in Kazakhstan and is targeted at conducting studies and implementing initiatives of a local nature.
Cooperation with the NGO Eurasia Foundation of Central Asia (EFCA) in Kazakhstan proceeded in 2013 with a view to completing initiatives aimed at education in the local community. Work with the Junior Achievement Azerbaijan (JAA) to reinforce the technical skills of university students also went ahead. In Colombia, the Company cooperated with a number of local NGOs to increase awareness on environmental issues.
Relations with vendors are discussed in the document ‘Saipem Sustainability 2013’, where the selection and assessment processes are described. At local level, specific initiatives for vendor involvement are constantly ongoing. These aim to improve the quality of supplies and to encourage vendors to comply with Saipem’s quality, health and safety, environmental and social requirements. In this regard, meetings were held most especially with vendors in India, China and Brazil. In Kazakhstan, vendors were involved in initiatives for local communities. Forums targeted at vendors in Venezuela, Nigeria, Brazil and Colombia were organised in 2013, as were training courses in Azerbaijan and Nigeria. The Company supported Aboriginal companies in Australia and Canada through a variety of initiatives. Finally, it is worth mentioning the meetings organised periodically with vendors with whom strategic agreements have been signed.