Remuneration and Appointments Committee (RAC) (CRN)
The Remuneration and Appointments Committee is composed of three Non-Executive Directors, the majority of whom – including the Chairperson – are independent. At least one member of the Committee has appropriate experience in financial and remuneration policies which is assessed by the BoD at the time of appointment. The RAC:
- periodically assesses the suitability, overall consistency and actual application of the remuneration policy of Directors and Senior Managers with strategic responsibilities, by making use of the information provided by CEOs;
- submits proposals on the subject to the BoD;
- presents proposals or expresses opinions to the BoD regarding the remuneration of Executive Directors and other Directors with specific office, as well as establishing performance objectives relating to the variable part of said remuneration;
- monitors the application of the decisions adopted by the BoD by verifying the actual fulfilment of performance objectives;
- attends to the preliminary work for the preparation of the remuneration policy for Executive Directors and Senior Managers with strategic responsibilities, needed for the BoD to adopt the measures it is responsible for, after interacting with the Control, Risk and Sustainability Committee on risk profiles;
- formulates opinions to the BoD in respect of its own size and composition, and makes recommendations on the professional figures whose presence in the BoD is deemed desirable;
- proposes candidates to the BoD for the office of Director in cases of co-opting, where independent Directors need to be replaced, ensuring compliance with the requirements on the minimum number of independent directors and on the percentages reserved for the less-represented gender;
- expresses recommendations to the BoD in relation to the maximum number of appointments that members can take as Director or Statutory Auditor in other listed companies, financial, banking, insurance or relatively large companies, compatible with the efficient performance of the office of company Director, bearing in mind the participation of Directors in the Committees established within the BoD, as well as the exceptions to the bans on competition provided for by art. 2390 of the Civil Code;
- performs enquiries into preparation of the plan for the succession of Executive Directors, if the BoD decides to adopt such a plan;
- supports the Board of Directors in the annual self-assessment activity.
The power to determine the remuneration of the Directors holding specific office pursuant to the Articles of Association resides with the Board of Directors, upon approval of the RAC and the Board of Statutory Auditors.
The Committee is responsible for the preliminary assessment – with respect to the decisions of the Board of Directors – of the Annual Remuneration Report to be made available to the public before the annual Shareholders’ Meeting called to approve the Financial Statements. The Report (to which reference should be made for further details) illustrates the remuneration policy for members of the Board of Directors, the Board of Statutory Auditors and Senior Managers with strategic responsibilities (section one) and the remuneration paid in the reference year to the above subjects (section two) and is aimed at increasing the knowledge and awareness of shareholders and, in general, of stakeholders and the market. The Shareholders’ Meeting held on 06 May 2021 approved section one of the Report on Remuneration Policy 2021 and Compensation Paid 2020 and resolved to vote in favour of section two. The voting results are available on the Company’s website.
The Chairperson of the Remuneration and Appointments Committee or another member of the Committee must be present at the annual Shareholders’ Meeting called to approve the Financial Statements, also in order to inform shareholders of the methods by which the Committee performs its assigned duties. After the Shareholders’ Meeting, the Remuneration and Appointments Committee analyses the voting results on the Report on Remuneration Policy and Compensation Paid, examines any concerns arising at the Shareholders’ Meeting and carries out assessments to review the Remuneration Policy adopted by the Group. Moreover – in consideration of the consensus collected on the Report and given the results of the engagement activity with proxy advisors and institutional investors, carried out with the support of a consultant – the RAC started indepth studies with the aim of implementing the indications emerged during the Shareholders’ Meeting and improving the communication to the market of the remuneration policies adopted, also in line with the innovations introduced by the Corporate Governance Code and the guidelines formulated in December 2021 by the Corporate Governance Committee. The remuneration policy and its implementation are among the topics of the Policy for the management of dialogue with all Shareholders and Investors, published on the Group’s website.
Control, Risk and Sustainability Committee (CRSC)
The Control, Risk and Sustainability Committee (CRSC) is composed of four Non-Executive Directors, the majority of whom – including the Chairperson of the CRSC – are independent. At least one member has appropriate experience in accounting and finance or risk management (deemed adequate by the Board of Directors upon their appointment).
Pursuing the priority objective of creating value for its stakeholders in the mediumand long-term, the Board of Directors defines the nature and level of risk compatible with the strategic objectives, assessing all the elements that may be relevant for the company’s sustainable success, as well as the guidelines of the internal control and risk management system, whose adequacy and effectiveness it assesses on an annual basis. In carrying out this role, the BoD is supported by the CRSC, which carries out assessments and provides a preventive opinion for the performance of the role that the BoD is responsible for in matters of internal control, risk management and sustainability. The Board of Statutory Auditors also monitors the effectiveness of the internal control and risk management system. The CRSC is also called upon to:
- assess, together with the Manager in charge of drawing up the corporate accounting documents and having consulted with the external auditor and the Board of Statutory Auditors, the proper use of the accounting principles and their consistency for the purpose of drafting the Consolidated Financial Statements;
- express opinions on specific aspects relative to identifying the main corporate risks (in particular, specific aspects relative to Risk Policies, the identification of the main company risks and the Audit Plan, as well as in regards the guidelines of the internal control and risk management system);
- express preliminary opinions with respect to resolutions of the BoD on a series of issues, including the appointment/ revocation and remuneration of the Manager of the Internal Audit Unit;
- examine the periodic reports on the assessment of the internal control and risk management system and those of particular relevance drafted by the Internal Audit Unit;
- monitor the autonomy, adequacy, effectiveness and efficiency of the Internal Audit Unit;
- request that the Internal Audit Unit carry out checks on specific operating areas, providing simultaneous communication to the Chairperson of the Board of Statutory Auditors;
- report to the Board of Directors on the activities carried out and on the adequacy of the internal control and risk management system at least every six months, on the occasion of the approval of the annual and half-yearly financial reports;
- through suitable preliminary activities, support the assessments and decisions of the Board of Directors relating to the management of risks arising from detrimental acts of which it has become aware;
- monitor sustainability policies and compliance with the conduct principles adopted by the Company and its subsidiaries;
- examine the issues under enquiry in terms of long‐term sustainability of the basic principles and guidelines of strategic planning, of the Business Plan and of short‐term planning, supervising the methods for implementing the same;
- assess, together with the Corporate Social Responsibility and Local Committees Department and having consulted the external auditor, the correct use of the standards adopted in order to draft the non-financial information provided for by the legislations in force;
- supervise the system for assessing and improving the environmental, economic and social impacts deriving from the business activities in the local areas;
- examine the periodic reports on the implementation of the structured comparison measures with stakeholders in the local areas where the Group operates, in particular through Local Committees, and those concerning consistency with corporate social responsibility issues of cultural activities and promotion of the Group’s image.
The CRSC convenes, on an at least half-yearly basis, the Chief Risk Management Officer and the other control departments for the Group risk report. The Committee also requests in-depth reviews of specific issues and commissions detailed analyses of certain risks or projects of a strategic nature. In 2021, CRSC requested a risk assessment of the 2030 Business Plan from the Risk Management Department. M&A transactions and other initiatives of a strategic nature, which were assessed during the year, were also subject to detailed analysis, with a particular focus on the impact of these transactions on the Group’s sustainability targets (environmental indicators, where significant, and social indicators relating, for example, to compliance with labour, health and safety and governance policies) and consistency with the EU Taxonomy.
The Risk Management and Corporate Social Responsibility and Local Committees Departments are convened by the CRSC at least twice a year, with one of the meetings held before the approval by the Board of Directors of the Consolidated Financial Statements and the Sustainability Report.
Committee for Transactions with Related Parties (CTRP)
The Committee for Transactions with Related Parties (CTRP), composed of four independent Non-Executive Directors, expresses its opinion on the performance of transactions of lesser and greater importance with Related Parties and, in general, performs all the other duties pursuant to the Regulation on transactions with related parties adopted by Consob.
The procedure for transactions with related parties of the Group, approved by the Board of Directors and revised in 2021 (available on the Group website), identifies three types of transaction: greater importance, lesser importance, and transactions of small amounts – and lays out procedural and transparency conditions according to the type of transaction, in accordance with the provisions of the Consob Regulation.
Iren has also established the Evaluation Commission for transactions with related parties (composed of the Chief Officers of the Administration, Finance and Control, Legal and Corporate Affairs, Risk Management Departments, the Manager of the Corporate Unit and, depending on the transaction in question, the other Chief Officers involved), with the function of monitoring the process of evaluating transactions with related parties.
The procedure attributes a central role to the CTRP and, to guarantee the double requirement of independence and non-relation in the individual transaction to be investigated of the members of the CTRP, outlines the mechanisms for identifying any persons responsible, as an alternative, for the investigation.
required to express a preliminary non-binding, supported opinion regarding the Company’s interest in the completion of the transaction and the convenience and substantial correctness of the relative conditions. For transactions of greater importance, the CTRP is involved during the investigatory phase and is required to express a preliminary and binding favourable opinion regarding the Company’s interest in the completion of the transaction, as well as the convenience and substantial correctness of the relative conditions. In this case, the Evaluation Commission for Transactions with Related Parties is responsible for the drafting of a document to be disclosed to the public, in accordance with Consob Regulation, within seven days of the approval of the transaction by the competent body or, if the competent body decides to present a contractual agreement, from the moment that the preliminary contract is concluded according to the applicable guidelines.
The update of the procedure for transactions with related parties, approved by the Board of Directors with effect from 1 July 2021, introduced, in line with the requirements of Consob regulations, an obligation to abstain from voting on minor and major transactions by any Directors who have an interest in the transaction, on their own behalf or on behalf of third parties, that conflicts with that of the Company.
In the case of transactions involving the remuneration of Directors vested with special offices and Senior Managers with strategic responsibilities, the Remuneration and Appointments Committee assumes responsibility for the matter, limited to cases where the composition of the Committee meets the minimum requirements of independence and non-relation of its members as required by the Consob Regulation.
Stakeholder information on related party transactions is provided in the Report on Corporate Governance and Ownership Structure and in the interim and annual reports on operations.