Information on corporate governance and ownership structure

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Snam Annual Report 2012 / Report on corporate governance and ownership structure123- to submit to the Board of Directors, upon proposal of the CEO, the candidates for thereplacement of the corporate bodies of direct subsidiaries. The Committee’s proposal is binding;- to develop and propose: a) annual self-assessment procedures for the Board of Directors andits committees; b) directives on the limits and rules against the accumulation of positionsby the directors of Snam and its subsidiaries; and c) criteria for assessing the professionaland independence requirements that apply to directors of Snam and its subsidiaries, and theircompetitive activities;- to report to the Board on its activities every six months.3) The Control and Risk Committee is composed of three non-executive independent directors(Roberto Lonzar – Chairman, Renato Santini and Mario Stella Richter), and, as defined in the Codeof Conduct for listed companies, its role is to propose and advise the Board in order to support, withthe appropriate research, the assessments and decisions of the Board regarding the internal controland risk management system, in addition to the approvals of the periodic financial statements.In particular, the Committee has the following functions:a) to evaluate, together with the Chief Financial Officer and upon hearing the opinion of theIndependent Auditors and Board of Statutory Auditors, the proper use of accounting standardsand their consistency for purposes of preparing the consolidated financial statements;b) to express opinions on specific aspects involving the identification of the main risks to theCompany;c) to perform additional duties assigned to it by the Board of Directors, in particular expressingan opinion on the rules governing the transparency and substantial and procedural correctnessof transactions with related parties and those in which a director or statutory auditor has aninterest, either on his own behalf or on behalf of a third party;d) to examine the periodic assessment reports of the internal control and risk managementsystem and the reports of particular significance prepared by the Internal Auditor;e) to monitor the autonomy, adequacy, efficiency and effectiveness of the Internal Auditdepartment;f) to potentially request the Internal Auditor to carry out checks on specific areas of operation,while concurrently informing the Chairman of the Board of Statutory Auditors;g) to report to the Board, at least every six months, upon approval of the annual and half-yearlyfinancial statements, on the activity carried out and the adequacy of the internal control andrisk management system;h) to express an opinion on the proposals made by the Chief Executive Officer, in agreementwith the Chairman, to the Board of Directors (i) regarding the appointment, dismissal andremuneration of the Internal Auditor, in line with the Company’s remuneration policies, and (ii)which aim to ensure that this individual has the appropriate skills and resources with which tocarry out his/her duties.Furthermore, the Committee informs the Board of Directors in regard to its opinion on:1. the definition of the guidelines for the internal control and risk management system, so that themain risks affecting the Company and its subsidiaries are correctly identified and adequatelymeasured, managed and monitored, and to determine the degree of compatibility of such risksthrough management that is in line with the strategic objectives that have been set;2. periodic assessment, at least annually, of the adequacy of the internal control and riskmanagement system with regard to the characteristics of the Company and the risk profileassumed, as well as its efficacy;3. periodic, but at least annual, approval of the work plan prepared by the Internal Auditor;Snam Annual Report 2012
124Snam Annual Report 2012 / Report on corporate governance and ownership structure4. the description in the Report on corporate governance and the ownership structure of the maincharacteristics of the internal control and risk management system as well as the assessment ofthe system’s adequacy;5. the assessment of the results provided by the Independent Auditors in the recommendation letterfollowing the legal audit.4) Resolution ARG/com 57/2010 of the Electricity and Gas Authority, amending Resolution 11/07 onthe functional unbundling of regulated activities in the natural gas sector, established that, pursuantto and in accordance with Article 9 of the aforementioned Resolution 11/2007 (the “ConsolidatedUnbundling Act”), the activities of natural gas storage, regasification, transportation, dispatching,distribution and metering may be managed jointly, and are not subject to functional unbundlingobligations.Through the decision of 27 July 2010, the Board of Directors established the Combined IndependentManagement Committee (“the Management Committee”) pursuant to Article 9 of the ConsolidatedUnbundling Act. The Management Committee oversees the joint management of natural gastransportation and dispatching, distribution, storage and regasification activities, and is composed ofpersons who, pro tempore, fill the following positions:- CEO of Snam;- CEO of GNL Italia;- CEO of Italgas;- CEO of Snam Rete Gas;- CEO of Stogit.The Board has conferred all powers on the Committee to perform its functions. The CombinedIndependent Management Committee has adopted its own operating regulations.The Chief Executive Officer of Snam chairs the Management Committee and represents the organisationalstructure within the Management Committee responsible for expressing opinions binding on the Boardof Directors in compliance with and for the purposes cited in Article 11.5, letter c) of the ConsolidatedUnbundling Act, for all decisions taken by the said body affecting the business’ managerial andorganisational aspects; on any decisions that could have a direct or indirect effect on the independenceof the transportation system; and to approve the development plan cited in paragraph 11.1, letter b),point i) of the Consolidated Unbundling Act.The Management Committee appointed the Supervisor, in the person of the Snam Head of Complianceand Assurance, responsible for the proper management of commercially sensitive information in thecontext of the business activities.Legislative Decree 93 of 1 June 2011 and Prime Ministerial Decree of 25 May 2012:from functional unbundling to ownership unbundlingLegislative Decree 93 of 1 June 2011 on the “Implementation of Directives 2009/72/EC, 2009/73/ECand 2008/92/EC concerning common rules for the internal market in electricity and natural gas and aCommunity procedure to improve the transparency of gas and electricity prices charged to industrial endusers, repealing Directives 2003/54/EC and 2003/55/EC” (the “Decree”) saw the transposition by Italianlegislation of Directive 2009/73/EC, which introduced new provisions on the unbundling of natural gastransportation system operators from the other activities in the gas supply chain.The Decree provides that the major transportation company shall comply with the rules governing an“Independent Transmission Operator” (ITO, hereinafter the “Operator”).According to the rules governing the ITO model, in order to demonstrate the unbundling of the Operatorfrom the vertically integrated company, the Operator’s compliance with the requirements of the DecreeSnam Annual Report 2012
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