Company organization

In compliance with the provisions of the Italian legislation concerning listed companies, the Company's organization - based on the traditional administration and management model - includes the following:

  • a Board of Directors responsible for the Company management. To such aim, the Board is entrusted with the widest powers so as to complete all the actions that deems appropriate for the performance and the attainment of the Corporate purpose, excluding only the action that the Law and the Bylaws reserve to the Shareholders’ Meeting;
  • a Board of Statutory Auditors responsible for monitoring: (I) that the Company complies with the Law, the Bylaws and the principles of correct administration in performing Company activities, (II) the adequacy of the Company’s organisational structure, Internal Control System and administrative/accounting system as well as those of the foreign subsidiaries outside of the EU. It is also responsible for carrying out all duties assigned to the Board of Statutory Auditors by Law and by the Corporate Governance Code for listed companies. Pursuant to the provisions of article 19 of Italian Legislative Decree 39/2010, it is the responsibility of the Board of Statutory Auditors to supervise the financial information process, the efficiency of the internal control systems, of internal reviews and risk management, the auditing of annual and consolidated results and the independence of the auditing company;
  • the Shareholders’ Meeting - ordinary and extraordinary - that resolves upon, inter alia, (i) the appointment and revocation of members of the Boards of Directors and of Statutory Auditors and their fees and duties, (ii) the approval of the Financial statements and allocation of the profits for the year, (iii) the purchase and sale of treasury shares, (iv) amendments to the Bylaws, and (v) the issuance of convertible bonds; (vi) authorizations for actions carried out by Directors concerning Transactions with Related Parties for which there was no favourable opinion by the competent independent body, in compliance with governing regulations and based on procedures adopted by the Board of Directors as well as on urgent transactions submitted by the Directors to an advisory vote of the Shareholders’ Meeting (Article 13.3 of the Bylaws), and (vii) during consultations pursuant to Article 123-ter, paragraph 6 of the Consolidated Law on Finance, on Company Policy on matters of remuneration of members of administration bodies, of general directors and of executives with strategic responsibilities;
  • an Executive in Charge of the preparation of the Company's accounting records, who is given all assignments and responsibilities provided by the Law and regulations as well as those provided for by the Governance Code (Article 7.C.2).

Statutory auditing activities are entrusted to a specialized company enrolled in the specific register of legal auditors, which is appointed by the Shareholders’ Meeting on proposal by the Board of Statutory Auditors.

Terna’s independent legal auditors also have similar engagements with the Company’s main subsidiaries.

It has been some time since the Organizational Model adopted by the Company pursuant to Legislative Decree no. 231/01 - which was recently updated based on the provisions of Legislative Decree 39/2010 - has provided that the auditing of the Company's Financial statements and that of any company of the Group and of the Consolidated financial statements is not compatible with consultancy activities for Terna or any company of the Group, extending to all network of the audit company as well as to shareholders, Directors, members of control bodies and employees of the audit company and of the other companies belonging to the same network. The assignments to the audit company are submitted to Terna's Internal Control Committee (now the "Control and Risk Committee") for any assignment other than the one given under Law provisions, in any event related to auditing activities. In order to ensure independence of the company and of the officer in charge of auditing, the assignment for the legal auditing of the Company’s financial statements and that of any company of the Group and of the consolidated financial statements is not in any case given to audit companies that fall within one of the incompatibility situations pursuant to Article 17 of Italian Legislative Decree no. 39/2010 and Part III, Title VI, paragraph I bis of the Issuers Regulation.

The Shareholders’ Meeting held on May 16, 2012 approved changes to Articles 14.3, 14.5, 26.1 and 26.2 of the Company Bylaws and the introduction of new Article 31 ("Transitional Clause") with new numbers 31.1 and 31.2 for the paragraphs forming this Article, aiming at ensuring, for three consecutive terms and without prejudice to any additional extensions as provided for by the law, gender balance in the composition of the Board of Directors and of the Board of Statutory Auditors of companies with listed shares, implementing the provisions introduced by Law No. 120 dated July 12, 2011, by Articles 147-ter, paragraph 1-ter, and 148, paragraph 1-bis of the Consolidated Law on Finance. The main changes concern: (i) the methods used for coordinating observance of gender quotas with the slate vote procedure, with the sole exception for lists containing less than three candidates; (ii) the mechanisms used to ensure observance of gender quotas should there be substitutions during the course of a mandate; and (iii) methods to ensure that exercising the right of appointment, when provided for, does not contrast with the regulatory provisions of the Consolidated Law on Finance on the matter.