Control and risk committee

The Control and Risk Committee (formerly the Audit Committee) of April 02, 2019 in office comprises three non-executive Directors, including two independent Directors: Fabio Gallia (Chairman and independent), Paolo Di Benedetto (independent) and Xavier Girre.

The composition of the Committee currently in office is consistent with the Code’s general requirement to ensure a majority of independent Directors and the chairmanship of an independent Director, but does not comply with the requirement for an issuer controlled by another publicly traded company (as was the case for Edison after May 24, 2012) to ensure that all Directors are independent. The presence also of a non-independent director, even if non-executive, and therefore not involved in the operational activities of the Company, is justified by the undoubted and proven professionalism and training of the person in relation to these tasks.

At that meeting the Board deemed, on the basis of the experience of the members on the committee, that all Directors appointed met the professional requirements established by the Corporate Governance Code, so the recommendation with regard to adequate experience in accounting, financial and risk management issues was met.

The Committee is responsible for providing consulting support and making recommendations in the following areas, which were expanded in accordance with one of the alternatives offered in 2015 by the Code, attributing to the Committee also the supervision of sustainability issues related to the exercise of the Company’s businesses and the dynamics of its interaction with all stakeholders.

  • Together with the Corporate Accounting Documents Officer and considering the input of the Statutory Independent Auditors and the Board of Statutory Auditors, it assesses the correct use of the accounting principles and their consistency with those used in the consolidated financial statements and review the accounting treatment of the principal Company transactions, particularly with regard to their effect on financial reporting
  • It renders an opinion to the Board of Directors on the guidelines of the internal control and risk management system and the compatibility degree of such risks with a management of the Group’sbusiness that is consistent with the chosen strategic objectives
  • It renders an opinion to the Board of Directors on the effectiveness of the internal control system and the risk management process. In this endeavor, the committee is supported by Internal Control Officer (now in charge of Internal Auditing) a function performed by the the Internal Auditing Manager
  • It reviews the work plan submitted by the Internal Auditing Department and its periodic reports regarding the issues listed in the preceding letter, as well as the findings of particularly significant reports prepared by that Department.
  • It monitors the adequacy, effectiveness, efficiency and independence of the Internal Auditing Department.
  • If appropriate, it recommends that the Internal Auditing Department perform audits of specific operational areas, notifying the Director responsible for overseeing the internal control and risk management system.
  • It gives its opinion on the appointment and dismissal of the manager of the Internal Auditing Department and on the appropriateness of the financial resources allocated to it; in this respect, it should be noted that the opinion on the appointment was not provided for as obligatory because it is preferred, on the one hand, to leave more discretion to the Board of Directors and, on the other hand, it has been assessed that the procedures adopted by the Company for the replacement of key persons in the company organization (including, precisely, the Internal Auditing Manager) and the definition of the related compensation ensure a sufficiently thorough process of selection and evaluation of stakeholders and compensation consistent with the general guidelines assessed by the Compensation Committee.
  • Upon request by the Board of Directors or the Director responsible for overseeing the functionality of the internal control and risk management system, it provides opinions concerning specific aspects of the internal control system and the mapping and management of the main risks
  • It evaluates, with the input of the Board of Statutory Auditors the findings of the Statutory Independent Auditors in the audit report and the management letter concerning key issues uncovered during the statutory independent audit
  • It carries out all other tasks assigned to it by the Board of Directors
  • It reports to the Board of Directors at least semiannually, when the annual and semiannual financial reports are approved, on the work it performed and on the effectiveness of the Company’s internal control and risk management system
  • It supports, with an adequate preliminary activity, the evaluations and decisions of the Board of Directors related to the management of risks deriving from prejudicial facts
  • It supervises sustainability issues related to the exercise of the Company’s businesses and the dynamics of its interaction with all stakeholders.

The Chairman of the Board of Directors and the Chief Executive Officer are entitled to attend committee meetings merely in a consultative capacity

At the committee’s invitation, meetings of the committee are attended on a regular basis by the Chairman of the Board of Statutory Auditors or another Statutory Auditor, so as to ensure the delivery to this entity of the flow of information and suggestions recommended by the Code. The following parties are invited and attend committee meetings for their entire duration: the Chief Financial Officer, the General Counsel, the Secretary to the Board of Directors, the Risk Officer, the Accounting & Tax Manager, the Planning, Control & Corporate Credit Manager, and until the end of 2020, the Gas Midstream, Energy Management & Gas Infrastructures Manager and the Independent Auditors. From time to time, other Directors, employees and experts may be invited to attend meetings in a consulting capacity.

The Internal Auditing Department provides the committee with support in organising its meetings. The manager of the Internal Auditing Department serves as the Committee’s Secretary. The committee is required to meet at least five times a year.

At the first Board meeting held after each committee meeting, the Committee Chairman communicates to the Board of the Directors the resolutions adopted by the committee, which may take the form of a proposal to the Board with regard to issues within its jurisdiction.