Internal Audit Department Manager

The Internal Control and Risk Management System of the Terna Group - according to the provisions of the guideline "Internal Control and Risk Management System of the Terna Group", as most recently updated on December 19, 2012 and already presented in this section - provides for an Audit Department and the figure of the Internal Audit Department Manager appointed by the Board of Directors on the appointment of the "Director in Charge of the Internal Control and Risk Management System" upon first seeking the favourable opinion of the Control and Risk Committee and having consulted with the Board of Statutory Auditors (Article 7.C.1 of the Governance Code). This is also assigned the tasks set out in the Governance Code (Article 7.C.5 of the Governance Code) and is not assigned any operative area; it depends on the Board of Directors and also reports to the CEO as "Director in Charge of the Internal Control and Risk Management System" (Article 7.C.5, letter b) of the Governance Code).

Terna's organisation instituted a specific Internal Audit Department some time ago and assigned its responsibility to a company executive with suitable requirements of professionalism without any operative responsibilities or appointments, who reports to the Director in Charge of the Internal Control and Risk Management System and who answers in his work to the Board of Directors, assigning him resources and means for overseeing the suitability, operations and function of the ICRMS and remuneration coherent with business policies (Article 7.C.1 of the Governance Code). This structure has guaranteed the efficiency of the audit in pursuing its mission and the conformity of the activities carried out with the Standard for the practice of Internal Auditing issued by the IIA and consequently, the Board of Terna has maintained its current structure and the figure of the Internal Audit Department Manager already in place in Terna and held by engineer Fulvio De Luca.

Terna's Internal Audit Department Manager:

  • checks, both continuously and in relation to specific needs and in compliance with international standards, the operations and suitability of the Internal Control and Risk Management System through the audit plan based on a structured process analysing and prioritising the main risks (Article 7.C.1, letter a) of the Governance Code);
  • has direct access to all information useful to fulfilling the appointment. More specifically, in order to go about its duties, the Audit Department may access all company information systems freely and all acts and information in the company (Article 7.C.1, letter c) of the Governance Code);
  • prepares regular reports containing suitable information on his work, on the way in which risks are managed and on compliance of the plans defined to limit them. The regular reports contain an assessment of the suitability of the Internal Control and Risk Management System (Article 7.C.1, letter d) of the Governance Code);
  • prepares prompt reports on particularly important events (Article 7.C.1, letter e) of the Governance Code);
  • sends the reports pursuant to the above points to the Chairs of the Board of Statutory Auditors, the Control and Risk Committee, the Board of Directors and the Director in Charge of the Internal Control and Risk Management System (Article 7.C.1, letter f) of the Governance Code);
  • checks, as part of the audit plan, the reliability of the information systems including the accounting systems (Article 7.C.1, letter g) of the Governance Code).

The plan of works prepared by the Internal Audit Department Manager is approved by the Board of Directors at least once a year and having first sought the opinion of the Control and Risk Committee, having consulted with the Board of Statutory Auditors and the Director in Charge of the Internal Control and Risk Management System (Article 7.C.1, letter c) of the Governance Code). For FY 2012, the plan of works was examined first by the Internal Control Committee on the basis of the provisions of the Governance Code of reference as in force at the time. The new plan of works was then approved by the Board in the meeting of March 15, 2013, having first obtained the opinion of the Control and Risk Committee and consulted with the Board of Statutory Auditors and the Director in Charge of the Internal Control and Risk Management System.

The Internal Audit Department Manager operates through audits, the scope of application of which is extended to Terna and its subsidiaries. Audit activities can be carried out in connection with the departments carrying out audits in the companies and are carried out according to the annual plan of action or prepared each time by the company senior management (such as the "Director in Charge of the Internal Control and Risk Management System") in relation to specific facts or following specific events, simultaneously informing the Chairman of the Board of Directors, the Chairman of the Control and Risk Committee and the Chairman of the Board of Statutory Auditors (Article 7.C.4, letter d) of the Governance Code).

The Control and Risk Committee can ask the Audit Department to carry out audits on specific operative areas, simultaneously notifying the Chairman of the Board of Statutory Auditors (Article 7.C.1, letter e) of the Governance Code) and the Director in Charge of the Internal Control and Risk Management System.

The Board of Statutory Auditors, within its own activities, can request the Audit department to carry out assessments on specific operating areas or Company operations (Article 8.C.4 of the Governance Code).

The Internal Audit Department Manager informs the Director in Charge of the Internal Control and Risk Management System of the requests for audit received from the Control and Risk Committee and the Board of Statutory Auditors.

The Board of Statutory Auditors and the Control and Risk Committee exchange significant information to fulfil their tasks (Article 8.C.5 of the Governance Code).

During FY 2012, numerous significant company scopes were audited, relating to: the management of the electrical system and its safety, impartiality with regard to grid users, design and development activities, group reorganisation and information management.