Pursuant to the Company’s Bylaws, as amended by the Shareholders’ Meeting on June 26, 2007 and the Board of Directors on July 23, 2010, Statutory Auditors must be elected by means of slates of candidates, in order to allow minority shareholders to elect one Statutory Auditor, who will serve as Chairman of the Board of Statutory Auditors. Only shareholders who, alone or in combination with other shareholders, represent in the aggregate a percentage of the shares conveying the right to vote at Ordinary Shareholders’ Meetings equal as a minimum to the percentage required for filing slates of candidates for the post of Directors, which, based on the Company’s market capitalization, is equal to 1% of the common share capital, are entitled to file a slate of candidates, provided the filers are minority shareholders not linked directly or indirectly with the controlling shareholder, its direct or indirect shareholders or other companies in the various groups to which each company belongs.
Pursuant to the Bylaws, nomination proposals must be filed at the Company’s registered office at least 25 days before the date of the Shareholders’ Meeting. The proposals must be accompanied by the following documents: information disclosing the identity of the parties filing slates of candidates; if applicable, an affidavit stating that the filers are not linked with the controlling shareholder, its shareholders and group companies belonging to said shareholders; professional curricula of each candidate, listing any management and control posts held at any other companies; affidavits by which the candidates attest that there are no issues that would make them incompatible or unelectable or would cause them to be removed from office, that they meet the requirements for election as Statutory Auditors pursuant to current law and the Bylaws and that they accept the nomination. Moreover, pursuant to the regulations set forth in a Decree issued by the Ministry of Justice on March 30, 2000, the professional requirements of Statutory Auditors are also listed in the Company Bylaws. In no case may individuals who fail to meet the requirements of independence, integrity and professionalism established in the pertinent laws or the Bylaws or who already serve on the maximum number of management and control bodies allowed pursuant to the applicable laws be elected to the Board of Statutory Auditors. If no slate is filed at least 25 days before the date of the Shareholders’ Meeting or if only one slate is been filed or if multiple slates are filed by shareholders who are linked with each other, the deadline for filing slates is extended by three days and the percentage required to file them is halved to 0.5% of the common share capital.
In both cases, the final deadline for submitting a certification by an intermediary confirming the participation totally owned by the shareholders filing the slate has been set by current laws to at least 21 days before the date of the Shareholders’ Meeting convened on the first calling.
The curricula of the Statutory Auditors currently in office, together with the additional documents mentioned above, were filed within the deadline required under current laws, i.e., at least 15 days before the Shareholders’ Meeting, and posted at the same time on the Company website (www.edison.it - Investor Relations - Documents and Prospectuses - 2008 Archive). The main documents required pursuant to the Bylaws and the applicable regulations for the purpose of filing slates of candidates have also been collected in a publication made available and posted on the Company website (www.edison.it - Investor Relations - Documents and Prospectuses - 2008 Archive) 15 days before the Shareholders’ Meeting.
Statutory Auditors are elected for a term of three years and may be reelected.
Information about replacement procedures is provided in Article 22 of the Bylaws, a copy of which has been annexed to this Report.
Composition and Qualifications
Pursuant to the Company’s Bylaws, the Board of Statutory Auditors must be comprised of three Statutory Auditors and three Alternates.
The current members of the Board of Statutory Auditors, all elected at the Shareholders’ Meeting of April 2, 2008, are: Alfredo Fos sati (Chairman), drawn from the slate filed by the minority shareholder Fincamuna Spa (Carlo Tassara Group), and Angelomaria Palma and Leonello Schinasi, drawn from the slate filed by TdE, the majority shareholder.
All Statutory Auditors currently in office are listed in the Register of Independent Auditors and meet the requirements of current laws, the Bylaws, the independence requirements applicable to Statutory Auditors pursuant to law and the Code’s independence requirements for Directors. The Board of Statutory Auditors verified that these requirements were still being met on the occasion of the meeting during which it reviewed the Company’s corporate governance system.
The term of office of the current Board of Statutory Auditors will expire with the Shareholders’ Meeting convened to approve the 2010 annual financial statements.
According to the provisions of the Governance Agreements that apply to Edison’s Board of Statutory Auditors, EDF/WGRM and Delmi have each the right to designate one Statutory Auditor and one Alternate. The third Statutory Auditor and Alternate must be taken from a slate filed by Edison minority shareholders, provided that such a slate has been filed. In addition, EDF/WGRM and Delmi must decide jointly which of the two Statutory Auditors they designated will serve as Chairman of the Board of Statutory Auditors and must also select jointly Edison’s independent Auditors.
With regard to this issue, the Shareholders’ Meeting of June 26, 2007 amended the Bylaws to make them consistent with the law that requires that the Chairman of the Board of Statutory Auditors be filled with one of the Statutory Auditors elected from a minority slate. With this change, the election of the entire Board of Statutory Auditors and its Chairman was carried out in accordance with the amended Bylaws.
The Annex to this Report includes a table that lists the posts that the Statutory Auditors in office at December 31, 2010 held at other companies and their curricula.
The compensation of the Statutory Auditors is determined by the Shareholders’ Meeting that elects them.
The compensation of the Board of Statutory Auditors currently in office was determined by the Shareholders’ Meeting of April 2, 2008, which confirmed the annual compensation defined in 2005, amounting to 60,000 euros for the Chairman and 40,000 euros for each Statutory Auditor.
Additional information about the compensation earned by the Statutory Auditors in 2010 is provided in a table included in the section of this Report entitled “Compensation of Directors and Statutory Auditors.”
Rules of Operation
The Board of Statutory Auditors is required to meet at least once every 90 days. Meetings of the Board of Statutory Auditors may be held via teleconferencing or videoconferencing, provided all participants can be identified and are able to follow the proceedings, participate in real time in the discussion of the items on the Agenda and receive, transmit and review documents.
In 2010, the Board of Statutory Auditors met 14 times. The average attendance of the Statutory Auditors at these meetings was 90.48%. A breakdown is provided below:
|Statutory Auditors||Number of Board of Stat. Aud. meetings attended in 2010||Percentage|
|Statutory Auditors in office|
|Alfredo Fossati||14 of 14||100|
|Angelomaria Palma||11 of 14||78.57|
|Leonello Schinasi||13 of 14||92.86|
In addition, the Statutory Auditors attended meetings of the Board of Directors held in 2010. As shown in the table below, their average attendance percentage was 90.48%.
|Statutory Auditors||Number of Board of Directors meetings attended in 2010||Percentage|
|Statutory Auditors in office|
|Alfredo Fossati||7 of 7||100|
|Angelomaria Palma||7 of 7||100|
|Leonello Schinasi||5 of 7||71.43|
In 2010, a Statutory Auditor, usually the Chairman of the Board of Statutory Auditors, attended the meetings of the Compensation Committee and the Oversight Board. Lastly, the exchange of information between the Board of Statutory Auditors and the Audit Committee takes place through the regular attendance to Committee meetings by a Statutory Auditor and a representative of the Independent Auditors is invited on a regular basis to attend meetings of the Board of Statutory Auditors to report on the findings of the audits they performed. In addition, usually once a year, the Company’s Board of Statutory Auditors meets with the Boards of Statutory Auditors of the subsidiaries to exchange information about the Company’s activities. One of the subjects discussed at the last meeting, which was held at the beginning of 2011, was the selection of the new Independent Auditors for the various Group companies.
In 2010, the Board of Statutory Auditors provided opinions on the additional assignments that the Board of Directors awarded to the Independent Auditors and to other entities belonging to the same network, verifying that the abovementioned assignments and those awarded by the subsidiaries were within the statutory limitations of exercisable activities and ascertained the auditors’ independence.
The Board of Statutory Auditors adopted the Code’s recommendation requiring that its members disclose any direct or third-party interest they may have in specific transactions submitted to the Board of Directors for approval. No situations that would have required the members of the Board of Statutory Auditors to provide such a disclosure occurred in 2010.
In discharging its duties, the Board of Statutory Auditors relies on the support of a dedicated Company unit that reports to the office of the Secretary to the Board of Directors.