Corporate Governance means the set of rules and, more in general, the corporate governance system that regulate the Company’s management and control.
The governance model adopted by Leonardo is in line with the application criteria and principles laid down in the Corporate Governance Code (finally updated in July 2015) the Company adheres to. This model is aimed at maximising value for shareholders, at controlling business risks and ensuring greater transparency to the market, as well as ensuring integrity and correctness of decision-making processes.
This model has been subject to subsequent changes, which have been aimed at adopting the guidelines provided from time to time by the Corporate Governance Code. These guidelines are incorporated in the “Rules of Procedure of the Board of Directors”, which is regularly updated by the Board in order to bring it into line with the content of the Code and with the changes made to the organisational structure of the Company.
The Rules of Procedure are available in the Corporate Governance section of the Company’s website (www.leonardocompany.com). The Corporate Governance Code is available on the website of the Corporate Governance Committee (http://www.borsaitaliana.it/comitato-corporate-governance/codice/2015clean.pdf)
The corporate governance system of Leonardo and its compliance with the guidelines laid down in the Code are the object of periodic analytical reporting on the part of the Board of Directors in the specific “Report on Corporate Governance and Shareholder Structure”, which is prepared on the occasion of the approval of the draft financial statements (in compliance with the provisions on the contents under paragraphs 1 and 2 of Article 123-bis of the Consolidated Law on Financial Intermediation and on the basis of the articles of the Corporate Governance Code) and published at the same time as this Annual Financial Report.
The Company’s Governance structure is summarised below. For more information on the corporate governance structure of Leonardo, the main updates that took place in 2016, as well as on any decisions and organisational measures adopted by the Company in order to ensure the strictest compliance with the Corporate Governance Code, reference is made to the Report on Corporate Governance and Shareholder Structure that was approved by the Board of Directors at the same time as this Report and that is available in the Corporate Governance section of the Company’s website (www.leonardocompany.com), as well as in the appropriate section prepared on the occasion of the Shareholders’ Meeting called to approve the Financial Statements, reporting documents and information relating to the Shareholders’ Meeting.
Corporate governance structure
The Company’s Governance structure, based on the traditional organisational model, is consistent with the applicable regulations provided for listed issuers, as well as with the guidelines laid down in the Corporate Governance Code and is essentially as follows:
- Shareholders’ Meeting. It passes resolutions in ordinary and extraordinary sessions in relation to such matters as are reserved for the same by law or the By-laws;
- Board of Directors. It is vested with the fullest powers for the administration of the Company, with the authority to perform any act it considers appropriate to the fulfilment of the Company’s business purpose, except for those acts reserved to the Shareholders’ Meeting by law or by the By-laws. The current Board of Directors was appointed by the Shareholders’ Meeting on 15 May 2014 for the three-year period 2014-2016; the related mandate will expire at the time of the next Shareholders’ Meeting called to approve the 2016 Financial Statements;
- Chairman of the Board of Directors. On 3 November 2015, the Board granted Mr Giovanni De Gennaro, the Chairman of the Company in office from 4 July 2013 and legal representative with signatory powers pursuant to law and to the By-laws, some powers concerning Institutional Relationships - to be exercised in coordination with the Chief Executive Officer -, Group Safety and Group Internal Audit, thereby confirming the powers granted to him on 15 May 2014 upon his appointment;
- Chief Executive Officer and General Manager. The Board of Directors’ meeting held on 3 November 2015 granted the Chief Executive Officer and General Manager, Mauro Moretti, without prejudice to any matters reserved for the Board itself, beside the powers relating to the Company’s legal representation pursuant to law and to the By-laws, signatory powers and the power to implement the resolutions passed by the governing body, as well as any and all delegated powers and authority for the joint management of the Company, its business units and subsidiaries, and for the management of all equity interests in associated and investee companies, in accordance with the strategic guidelines identified by him and approved by the Board of Directors. These are all new delegated powers and authority, compared to what the Board of Directors granted to him on 15 May 2014 upon his appointment, which take effect from 1 January 2016. The redefinition of the delegated powers and authority became necessary in order to implement the New Organisational and Operating Model of the Group;
- Lead Independent Director. Following the renewal of the Board of Directors by the Shareholders’ Meeting held on 15 May 2014, on this same date the Board of Directors appointed the Director Paolo Cantarella as Lead Independent Director with the task of coordinating the requests and contributions from non-executive Directors and in particular from independent Directors.
In this respect, the Rules of Procedure provide, even in the absence of the specific situations contemplated in the Corporate Governance Code, for such power of appointment on the part of the Board, with the abstention of the executive Directors and in any case of the non-independent Directors; in any case the Board shall make this appointment in the event of the Chairman being granted delegated operational powers. The Board granted no delegated operational powers to the Chairman; however, also considering the authority granted to the latter, the same Board was of the opinion to appoint the Lead Independent Director. The Lead Independent Director will serve throughout the term of office of the Board of Directors, that is, until the Shareholders’ Meeting when these Financial Statements are approved;
- Committees. The Board of Directors of Leonardo has established the following internal Committees, with advisory and consulting functions: the Control and Risks Committee (which also perform duties as Committee for Transactions with Related Parties), the Remuneration Committee and the Nomination, Governance and Sustainability Committee (as provided for in the Corporate Governance Code), as well as the Analysis of International Scenarios Committee. The Committees’ composition, duties and operation are illustrated and regulated by appropriate Rules approved by the Board of Directors itself, in accordance with the guidelines laid down in the Corporate Governance Code;
- Board of Statutory Auditors. The Board of Statutory Auditors has – inter alia - the task of monitoring: a) compliance with the law and by-laws and observance of the principles of proper business administration; b) the adequacy and effectiveness of the Company’s organisational structure, internal control and risk management system, as well as the administrative and accounting system, and also the latter’s reliability as a means of accurately reporting business operations; c) any procedures for the actual implementation of the corporate governance rules provided for in the Corporate Governance Code; d) the adequacy of the Company’s instructions to subsidiaries with regard to disclosures prescribed by law. The current Board of Statutory Auditors was appointed by the Shareholders’ Meeting on 11 May 2015 for the 2015-2017 term;
- Independent Auditors The Independent Auditors are the persons appointed to carry out the statutory audit of accounts. They are appointed by the Shareholders’ Meeting, on a reasoned proposal by the Board of Statutory Auditors. The Shareholders’ Meeting of 16 May 2012 appointed KPMG SpA to carry out the statutory audit of accounts for the period 2012-2020;
- Officer in charge of financial reporting. On 15 May 2014, pursuant to Article 154-bis of the Consolidated Law on Financial Intermediation and articles 25.4 and 25.5 of the Company’s by-laws, the Board of Directors confirmed Gian Piero Cutillo (the Company’s Chief Financial Officer), in this position since 14 June 2012, as the Officer in charge of financial reporting until the expiry of the term of office of the Board of Directors.
Below is reported a chart summarising the corporate governance structure of Leonardo.
Finally, the main Corporate Governance tools are reported below which have been adopted by the Company in accordance with the current provisions of law and regulations, as well as with the guidelines laid down in the Corporate Governance Code. The documents listed below are available to the public in the specific Corporate Governance and Ethics and Compliance sections of the Company’ website (www.leonardocompany.com).
- Code of Ethics;
- Organisational, Management and Control Model pursuant to Legislative Decree 231/2001;
- Shareholders’ Meeting Regulations;
- Rules of Procedure of the Board of Directors;
- Rule of Procedure of the Control and Risks Committee;
- Rules of Procedure of the Remuneration Committee;
- Rules of Procedure of the Nomination, Governance and Sustainability Committee;
- Rules of Procedure of the Analysis of International Scenarios Committee;
- Procedure for Related-Party Transactions;
- Code of Internal Dealing;
- Procedure for inside and confidential information.