Corporate governance at Acea
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The governance model adopted by Acea complies with the recommendations of the Corporate Governance Code and with the principles of transparency, balance and separation between guidance, management and control activities.
The Acea SpA Board of Directors establishes the strategic guidelines of the Group and is responsible for corporate governance. Three Committees are established within the Board with proposal and consultation responsibilities: the Control and Risks Committee, the Appointments and Remuneration Committee and the Ethics and Sustainability Committee. There is also a Related-Party Transactions Committee, in implementation of CONSOB regulations, composed of independent Directors, and a Committee for the Region, which is entrusted with investigative, advisory and monitoring tasks, particularly for the management of sponsorships and donations granted by Acea, in compliance with the Company's prerogative rights and the regulatory and legal constraints applicable to individual subsidiaries, aimed at ensuring the development of healthy and virtuous relations with the regions in which the Group operates.
Lastly, the Board of Statutory Auditors performs supervisory duties, according to the traditional model in force.
Chart no. 13 – Activities of the Corporate Governance Committees
During the year, the Departments, Functions and Business Units tasked with oversight of relevant topics such as Communication, Administration, Finance and Control, Investor Relations & Sustainability, Procurement and Logistics, Human Resources, Occupational Health and Safety, etc. were convened as normal by the Board Committees of reference. Furthermore, the measures adopted to develop and improve understanding on issues of sustainability within the Group's governance bodies include a number of specific induction initiatives, such as the detailed study conducted by Directors in June 2022 on the EU Regulation 2020/852 on the Taxonomy of Environmentally Sustainable Economic Activities and on the Corporate Sustainability Reporting Directive.
The company is managed by the Board of Directors, which can have from 5 to 9 members depending on the decision of the Shareholders’ Meeting. Board members remain in office for three financial years and can be re-elected. The method for selecting the members of the Board guarantees gender representation, an adequate number of Directors representing minorities and Independent Directors in accordance with the law52.
The Board in office, appointed in May 2020, is composed of 9 directors, 4 of whom are women.
As at 31 December 2022, and considering the date of first appointment of the BoD, Directors have an average term of office of approximately 3.8 years.
The Board of Directors met fifteen times during the year.
The Chief Executive Officer is the only executive Director.
In accordance with the Corporate Governance Code, Acea carries out a board evaluation annually, availing of an external advisor in order to assess the adequacy of the dimension, composition and function of the BoD and its internal Committees, as well as the issues discussed.
The Report on corporate governance and shareholders’ structure, available on the Group's website (www.gruppo.acea.it), provides information about the Directors of Acea SpA: CVs, gender, qualification of independence, Directors’ interests and related party transactions, presence in meetings of the Board and the Committees they are members of and any positions in other Companies. The Report also describes the appointment and replacement process for members of the Board of Directors as regulated by the Articles of Association.
Table no. 10 – Structure of the Board of Directors and Committees of Acea SpA (as at 31.12.2022)
| Role in the BoD | Appointments and Remuneration Committee | Control and Risks Committee | Ethics and Sustainability Committee | Executive director | Independent director | |
|---|---|---|---|---|---|---|
| MICHAELA CASTELLI | Chairperson | |||||
| GIUSEPPE GOLA | CEO | X | ||||
| LILIANA GODINO | Director | Membro | Chairperson | X | ||
| GABRIELLA CHIELLINO | Director | Member | Chairperson | X | ||
| MASSIMILIANO CAPECE MINUTOLO DEL SASSO | Director | Chairperson | Member | Member | X | |
| ALESSANDRO CALTAGIRONE | Director | X | ||||
| MASSIMILIANO PELLEGRINI (**) | Director | Member | ||||
| GIACOMO LA ROCCA | Director | Member | Member | X | ||
| FRANCESCA MENABUONI (***) | Director | Member | Member |
(*) On 14 February 2023, Director and Chairperson of the Board of Directors Michaela Castelli resigned from her position as Director and Chairperson of the Board of Directors, and on 17 February 2023 Barbara Marinali was appointed as Director and Chairperson of the Board of Directors.
(**) Director and CEO Giuseppe Gola and the Board of Directors of Acea reached an agreement for the consensual termination of the existing relationship on 26 September 2022. On the same date, Fabrizio Palermo was appointed Director and CEO.
(***) Director Giovanni Giani tendered his resignation as Director on 27 June 2022 due to other professional commitments. Director Massimiliano Pellegrini was appointed to replace Giovanni Giani at the board meeting of 18 July 2022.
(****) The Director Diane Galbe, following the new appointment, submitted her resignation to the Acea BoD on 25 February 2022. Director Francesca Menabuoni was appointed to replace Diane Galbe by the Acea Ordinary Shareholders' Meeting of 27 April 2022.
THE ROLE AND POWERS OF THE BOARD OF DIRECTORS IN ACEA
The duties lying with the Board of Directors pursuant to the law pro- visions, the Articles of Association and in compliance with the recommendations provided in the Corporate Governance Code include:
- Definition of the strategic direction;
- Economic and financial coordination of the Group’s activities;
- Definition of the guidelines of the Internal Control and Risk Management System (SCIGR), nature and level of risk compatible with the Company’s strategic objectives, including significant risks for medium-long term sustainability;
- Establishing the Committees required by the Corporate Governance Code and appointing their members;
- Adopting the Organisation, management and control model as pursuant to Legislative Decree no. 231/01;
- Assessing the adequacy of the organisational, administrative and accounting structure of Acea and its strategic subsidiaries;
- Interacting with the shareholders, encouraging their participation and enabling them to exercise their rights;
- Evaluating the independence of its non-executive members at least on a yearly basis.
FUNCTIONS OF THE CHAIRPERSON AND CHIEF EXECUTIVE OFFICER
The Chairman is the legal representative of the Company and is vested with powers of signature. He/she also convenes and chairs the Board of Directors and Shareholders’ meetings. The Chairman supervises the secretariat of the Board of Directors of the Parent Company and oversees the proceedings of the Board of Directors, ensuring the timeliness and completeness of the meeting and pre-meeting information; ensures that appropriate information flows are in place between Acea and the Group companies in order to monitor the consistency between the strategic guidelines and the performance; verifies the implementation of the resolutions adopted by the Board of Directors and the rules and principles of Corporate Governance, also in implementation of the powers reserved to the Board of Directors. He also presides over the topics of corporate social responsibility.
The Chief Executive Officer is entrusted with the ordinary business of the Company. He/she has signing powers for the company and legal and procedural representation and any other powers delegated to him/her within the limits of the law and the By-laws. His/her terms of reference are based on long-term plans and annual budgets approved by the Board of Directors. Moreover, he/she ensures and monitors compliance with operating guidelines, implementing organisational and procedural changes to the Parent Company’s activities consistent with the guidelines issued by the Board of Directors.
The Chairperson and the Chief Executive Officer may jointly implement acts reserved for the Board of Directors concerning contracts, purchases, participation in tenders, issue of sureties, appointment of members of the Board of Directors and Boards of Statutory Auditors of the most significant subsidiaries and affiliates when the urgency of the matter does not allow their convocation, informing the Board at its first subsequent meeting, which shall establish the existence of proven urgency and need.
MANAGEMENT AND COORDINATION OF THE ACEA GROUP
The Acea Group Management and Coordination Regulation, approved by the Board of Directors of Acea SpA, defines the general rules that regulate governance relations between the Parent Company and the Companies directly or indirectly controlled by it and subject to its management and coordination. The Regulation establishes the Acea Group's organisational guidelines and code of conduct, aimed at guaranteeing and guiding the management of the Subsidiary Companies towards common Group objectives, consistent with the strategic guidelines defined by the Parent Company, to achieve a more effective risk monitoring process to maximise shareholder value, as well as to ensure effective focus on stakeholders in the areas in which Acea operates.
When conducting its business, the Parent Company seeks to balance the interests involved, drawing inspiration from the principle of “compensatory advantage”, according to which individual transactions must be examined and assessed ex ante by each Company in the light of any other advantage (real or potential) derived by the same Company from the pursuit of Group interests and policy. The transactions carried out by each Subsidiary must therefore not be considered solely in the interest of the Company itself, but in the broader context of the economic, asset-related and financial expectations, directly or indirectly deriving from the economic, asset-related and financial strategies of the entire Group.
INTEGRATED GOVERNANCE INDEX 2022 AND ACEA POSITIONING
The Integrated Governance Index (IGI) is a consolidated analysis which assesses companies’ evolution against sustainability governance developments. The questionnaire underlying the index, now in its seventh edition in 2022, is addressed to the top 100 Companies listed on the Italian Stock Exchange, to the Companies that publish a Non-Financial Statement pursuant to Legislative Decree no. 254/2016, and to the top 50 non-listed financial and industrial Companies in the Mediobanca classification. The questionnaire consists of an ordinary area, divided into ten areas of analysis, and an extraordinary area, which varies each year, and explores particularly significant issues. In 2022, the extraordinary area focused on the extended ESG identity, also considering the supply chain.
The topics examined by the ordinary area range from the Corporate Governance Code to remuneration linked to ESG aspects, from the purpose to ESG digital governance.
Acea, now in its sixth year of participation, achieved a score of 60.45 (scale of 0-100), coming 16th out of a total of 86 respondents and recording an improvement compared to the previous year (score of 59.23 and 21st place out of 80 respondents). In particular, Acea significantly outperformed other listed companies in areas such as Board and Sustainability Committees, Human Resources and the integration of ESG issues into strategies. Areas where Acea performed less well this year were Succession Plans and the integration of ESG into remuneration policies.
In accordance with current legislation, the Ordinary and Extraordinary Shareholders’ Meeting may be called up by the Board of Directors and at the request of shareholders representing at least 5% of the share capital. Furthermore, in compliance with such provisions, the shareholders representing at least 2.5% of the share capital may request the addition of new topics be added to those to be discussed and submit resolution proposals for matters already included in the agenda of the Meeting.
Shareholder participation is facilitated by technology-based interactions (electronic notice of proxies; notice of call posted on the website). Prior to the date set for the meeting, the shareholders may submit enquiries regarding topics on the agenda, also by email. There are no shares with limited voting rights or devoid of such right53. Except for the shareholder Roma Capitale, restrictions shall apply to the voting right of shares exceeding 8% of the share capital, as laid down by the Articles of Association. Neither shareholders’ agreements nor special rights of veto or in any way affecting the decision-making process exist other than as a result of the equity interest held.
Within the Parent Company there are also several temporary or permanent Internal Committees involving representatives from the management team, which handle significant aspects of corporate management, such as the Coronavirus Prevention Committee that was set up at the onset of the pandemic and, in 2022, the Equality, Diversity & Inclusion Committee.
TOP MANAGEMENT REMUNERATION DETERMINATION PROCESS
A Remuneration policy is in place in Acea concerning top management, directors tasked with specific duties and executives holding key positions.
The remuneration system regarding these individuals is based on a clear and transparent process, with a key role being played by the Appointment and Remuneration Committee which formulates proposals regarding the remuneration Policy and the Board of Directors of the Company which approves them. The role of the two main corporate governance bodies ensures the observance of rules which avoid producing conflicts of interest and ensuring clarity through adequate information.
The Shareholders’ Meeting, pursuant to art. 2389 of the Civil Code, may decide not to intervene in determining the remuneration of the executive directors and members of the Committees, or may establish the maximum threshold, leaving the Board to decide on how to allocate it. It also resolves in favour of or against (binding resolution, pursuant to article 123-ter of the Consolidated Law on Finance, paragraph 3-ter), the first section of the Remuneration Report (paragraph 3 of the same article) and in favour of or against (non-binding resolution, pursuant to article 123-ter of the Consolidated Law on Finance, paragraph 6) the second section of the Remuneration Report (paragraph 4 of the same article). The Board of Directors determines the remuneration of the Chairperson, Chief Executive Officer and other Directors with specific duties, on proposal by the Appointments and Remuneration Committee, and also the remuneration due to the members of the Committees within the Board of Directors and the remuneration of the Executives with strategic responsibilities. The BoD, unless the Shareholders’ Meeting has already done so, determines the breakdown of the overall remuneration among the individual Board members.
Finally, please note that the remuneration of board members remained unchanged from the resolution of 5 June 2014; For more details see the Report on the remuneration policy and on the fees paid – 2022 available on the website www.gruppo.acea.it.
Under the regulations in force (CONSOB Issuers' Regulations), the Report on the Remuneration Policy and on the Fees Paid must include information on the shareholdings of members of the Board of Directors and Board of Statutory Auditors, General Managers and other Executives with strategic responsibilities; therefore, the shares held at the end of the reference year are reported, as well as details of those purchased and/or sold during the year. There are no specific requirements for the ownership of shares by Acea SpA Directors, but under Acea's Internal Dealing regulation, in line with market abuse regulations, transactions must comply with certain obligations (over-the-limit transactions and blackout periods).
52 Pursuant to art. 147-ter., para. 4 of Legislative Decree 58/98, so-called Finance Act (TUF), the minimum number of independent Directors must be 1 in the case of a BoD up to 7 members, 2 in the case of BoD exceeding 7 members. During the year the BoD verified that the Directors met the conditions required to qualify as independent. As at 31/12/2022, 5 Directors are eectively independent.
53 With the exception of 416,993 own shares (corresponding to about 0.2% of the total shares) for which the right of vote is suspended pursuant to art. 2357-ter Civil Code. See also the Report on corporate governance and the shareholders’ structure.