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SECTION A: CHAPTER 1 CORPORATE GOVERNANCE (Finally, We take into…

- - - - Skimping on the quality of his performance
      - Diverting himself some of what was promised to the principal
    - - More delegation of principal’s making decision to agents
      - The more difficult it is for principals to coordinate on a single set of goals for the agent, the more obviously difficult is to ensure that the agent does the ‘right’ thing
      - In the very end, COORDINATE COST EXARCEBATE AGENCY PROBLEM . Agency problems which run:
        
        Between minority/non-controlling shareholders on one side and dominant shareholders (weak managers) on the other side (‘Family/group/bank oriented Plcs system)
        
        Between (weak)shareholders on one side and (dominant) managers on the other side (‘Market oriented Plcs system’)
        
        :check: Note:
        Indeed, a growing body of empirical literature documents (in ‘family/group/bank oriented Plcs system’) the private benefits of control that dominant shareholders receive often at the expense of minority shareholders: benefits impounded in the control premia charged for controlling blocks and in the ‘price differentials’ that publicly traded high- and low- voting shares obtain (on the market) in the same companies
- - - - On the one hand, BOD have (and should have) a key governance role and perform monitoring and advisory tasks with respect to firms’ managers
      - On the other hand, SHAREHOLDERS have (and should have) FUNDAMENTAL GOVERNANCE RIGHTS, including that of APPOINTING THE BOARDS (which derive from their function as residual risk-bearers)
    - - Protection of minority shareholders
      - Shareholders’ involvement and activism
      - Formation, structure and performance of board of directors
      - Efficient identification and allocation of supervisory/monitoring functions versus managing powers and duties, especially when Conflicts of interests danger becomes severe and operations with related parties are to be entered into.
      - Complete, integrated and organic internal control and auditing system
      - :check: Note:
        However, the effectiveness of similar mechanisms depends on a variety of factors, including
        
        The ownership structures (quantity and quality of shareholders/voting’s leverage mechanism in a given system of company (which inevitably affect the equilibrium amongst the corporate governance mechanisms)
        
        The quality of corporate law and its enforcement
        
        The degree to which private codes of best practices are complied with.
        
        The institutional context (administrative, judicial and legal system) in which boards and shareholders operate
- - - - Very often PAYMENTS of INTEREST on bonds are TAX-DEDUCTIBLE (While, DIVIDENDS ARE NOT).
      - BONDS usually do not carry CONTROL RIGHTS and BONDHOLDERS generally DO NOT INTERFERE WITH the MANAGEMENT of the corporation
    - - However, since generally bondholders are creditors, and are ENTITLED to the PAYMENT OF INTEREST, while shareholders receive a dividend only if the corporation has earnings and directors (or shareholders) decide to pay dividends. The issuance of bonds can be more risky because directors have little discretion on payments of interests on bonds
  - - - On the one hand, shareholders’ VOTING POWER within the corporation is DILUTED.
      - On the other hand, the VALUE OF THEIR INVESTMENT can be REDUCED if the selling price is lower than the actual value of the shares
      - :check: Note
        Of course, such a problem could be easily solved by providing that all existing shareholders always have a MANDATORY PRE-EMPTIVE RIGHT to buy NEWLY-ISSUED SHARES similar protections, HOWEVER , THIS would be DETRIMENTAL TO THE CORPORATION: corporation requires a certain DEGREE OF FLEXIBILITY and ABILITY to PURSUE ITS OPTIMAL FINANCIAL STRUCTURE.
        
        Some jurisdictions (MARKET-ORIENTED systems ) GRANT BOD POWER IN THE ISSUING NEW SHARE, and ALLOW GREATER FREEDOM OF CONTRACT in REGULATING PRE-EMPTTIVE RIGHTS in the corporate charter , SHAREHOLDERS are mainly PROTECTED BY DIRECTOR'S FIDUCIARY DUTIES
        
        Other jurisdictions (FAMILY-ORIENTED SYSTEM) SHAREHOLDERS are protected through STATUTORY RULES that MANDATE PRE-EMPTIVE RIGHT, shareholders have the power to waive pre-emptive rights but only IN LIMITED CIRCUMSTANCE and UNDER SPECIFIC CONDITIONS.
- - - - Increasing shareholder power would, accordingly to shareholder primacists, go a long way toward SOLVING AGENCY PROBLEMS between shareholders (the PRINCIPAL ) and directors (the AGENT), ALIGNING the INTEREST OF FORMERS (MAXIMIZING SHAREHOLDER value) and the LATTER (who do NOT generally BEAR THE FULL COST OF THEIR ACTIONS , for they do not own significant holdings in company’s stock)
      - All in all, due to the fact that SHAREHOLDERS are RESIDUAL CLAIMANTS, THEY ARE VESTED WITH MORE significant ADMINISTRATIVE RIGHT, in particular VOTING RIGHTS to APPOINT AND REMOVE directors, while bondholders have limited powers to interfere with corporate decisions, and their rights are primarily protected contractually.
      - :check: Note:
        There are CONCLUSION really need some CLARIFICATION . As well as Some remarks of criticism may be raised to Shareholder Primacy
        
        Despite the fact that National Company Laws may be more ‘SHAREHOLDER CENTRIC ’ or more ‘BOARD CENTRIC’, it is a strong (default) rule that ‘control’ SHOULD REST ON SHAREHOLDER
        
        In other way, it is NOT due to the (old and traditional) argument that shareholders have these control rights BECAUSE they are the owners of the company
        
        Its premises is FALSE: SHAREOHODERS OWN their SHARES, not the COMPANY. Holding shares in the company does not -in itself- justify more rights over the company than other equally crucial contributors (Like creditors, employees, suppliers, customers)
        
        HOWEVER, most POWERFUL ARGUMENT IN FAVOR OF SHAREHOLDER CONTROL OF COMPANY is that SHAREHOLDERS – as just noticed – come last (RESIDUAL CLAIMANTS) in line in their claims on the company’s revenues in both ways:
        
        When the company is wound up (on winding-up, the SHAREHOLDERS GO FIRS AS FAR AS THE LOSSES ARE CONCERNED and GO LAST AS FAR AS THE SURPLUS IS CONCERNED )
        
        Where the company is a going concern will reduce (eliminate) its freedom to pay a return to its shareholders (in this context too, one can say that the SHAREHOLDERS COME LAST in the sense that an INCREASE IN THE COMPANY'S LIABILITY , or a fall in the value of its assets)
        
        Therefore, Having stated in what sense (and to what extension) the SHAREHOLDERS are RESIDUAL CLAIMANTS , the argumentative move from shareholders being residual claimants to their having control rights can be made in two ways: (reasons)
        
        It can be said that the shareholders’ position at the end of the queue makes them more dependent on the economic success of the company than any other group. IF the shareholders did not have control over the management to which has been delegated the task of adopting and implementing the strategies upon which that success depends, EQUITY INVESTMENT would be aLESSATTRACTIVE POSITION . The PRICE EQUITY INVESTORS would be prepared to pay for shares would DECREASE and thus the company’s COSTS OF RAISING CAPITAL would INCREASE .Therefore, the argument is that shareholder control reduces the company’s costs of products by reducing its cost of capital
        
        The second thing is to focus on the COMPARATIVE EFFICENCY OF SHAREHOLDERS as monitors in comparison with the other groups to whom control rights could be allocated, because of their position as residual claimants, shareholders have a greater incentive to use their monitoring powers to see that management minimizes the company’s costs of production other than any other group to whom monitoring rights might be assigned
        
        :check: Note:
        Minimizing the value of the company’s inputs and maximizing the value of its outputs maximizes the company’s contribution to the wealth of society, so that shareholders’ monitoring serves social goals. Shareholders’ incentives to maximize their own health are to be promoted, not because shareholders benefit from their monitoring, but because everyone else does too
        
        :check: Note
        However, groups with fixed claims against the company (preference shareholders, bond-holders, employees, customers or suppliers) have a lesser incentive to drive down the company’s costs of production because, beyond the level of corporate performance needed to ensure the satisfaction of their claims, these other groups do not benefit from extra monitoring across the whole range of potential monitoring effort, up to the point where the marginal extra costs of monitoring exceed the extra benefits therefrom.
        
        :check: Note
        The implications of the efficient monitoring argument (2) for legal policy are somewhat more robust than those flowing from the cost of capital argument (1) The implication is that there would be an efficiency (cost of production) loss in any departure from shareholder monitoring and that this is a cost which would fall on society as a whole as well as on the shareholders
        
        :check: Note
        In other words, monitoring and that this is a cost which would fall on society as a whole as well as on the shareholders. The shareholders receive most of the marginal gains and incur most of the marginal costs. They, therefore, have the right incentives to exercise discretion. The corporation is an incomplete contract and the discretion to fill any
        gaps in that contract is exercised via the VOTE
- - - - Minimal (retail) investors: NO SKILLS; NO INTEREST, RATIONALLY APATHETIC
      - INSTITUTINOAL INVESTOR( Mutual Fund or Pension Fund): no reason to vote; risk of conflict of interests; risk of “acting in concert”; free riding and collective action; (“defensive activism”)
      - Hedge funds: ACTIVE AND AGREESIVE PARTICIPANTS ; “WOLF-PACK STRATEGY” (“offensive activism”)
  - - - On one hand, shareholders have no adequate skills and wills; on the other hand, company is exposed to a risk of abuse and misuse of such rights
    - - Professional investors likely are able perform a ‘watchdog’ role; although, not always they are up to such a task (divergent economic, financial and political interests; rational apathy due to risk of adverse externalities; potentially, in conflict of interests; short-termism and ‘offensive’ strategies (hedge-funds))
    - - On the one hand, some of the ‘Shareholders Rights’ should require a qualified equity ownership in order to be assigned and
        exercised (mainly ‘Ex post voice rights’)
      - On the other hand, strengthening of general assembly role and its ‘intrusion’ on topic issues, along with the reinforcement of voting shareholders’ rights should be fostered (‘Ex ante voice right’)
- - - - By means of a TOTALLY DISCRETIONARY , SPONTANEOUS, and INDIVIDUAL INITIATIVE: in this case WSR is typically a mere ‘voting by feet’ intended to simply convey a disapproval towards the way a company is managed and the results achieved
      - By means of a (mandatory) PUBLIC OFFER to be opened towards the market by the prospective/incumbent dominant shareholder: in this case WSR (still voluntary, although triggered by the public offer) is intended to grant an equal treatment to all the shareholders of the company in benefiting from the control premium
  - - - VOTING RIGHT (together with functionally related rights: i.e. the right to participate meetings; call meetings; table proposals; raise questions and access to information and data about upcoming and post meetings), MOST IMPORTANT VOTING RIGHT IS THAT OF PARTICIPATING in the ELECTION of BOARD MEMBERS (to whom the law DELEGATES MANAGING AND SUPERVISING functions) and to DESIGNATE minority/independent members (with supervisory and monitoring powers)
    - - Right of REMOVAL OF BOARD MEMBERS
      - Damage claw back law suites right
        :CHECK: NOTE
        In a financial or business setting, “clawback” may refer to a provision in a contract that allows money or benefits to be taken back if special circumstances arise
      - Report Right
- - - - Equal treatment of shareholders
      - Information prior to the general meeting
      - Right to put items on the agenda of GAM and to table draft resolutions
      - Requirements for participation and voting in the general meeting
      - Participation in the GAM by electronic means/ VOICE CONFERENCE
      - Right to ask questions
      - Proxy voting
      - Voting by correspondence
      - Removal of certain impediments to the effective exercise of voting rights
      - Voting Results
    - - Ensuring a LEVEL PLAYING FIELD for all shareholders (as procedural and information costs of cross-border voting remain largely prohibitive)
      - LESSENING COMMUNICATION between ATOMISTIC MINORITY SHAREHOLDERS (promoting registered instead of bearer shares and reducing and harmonizing ownership disclosure thresholds)
      - BETTER DEFINING concept and rules of ‘acting in concert’ (as to facilitate engagement efforts without the risk of mandatory takeover bids)
        
        :CHECK: NOTE
        ACTING IN CONCERT: requires the cooperation of people or corporations to make the same transactions based on a previous arrangement
      - GRANTING TRANSPARENCY ON VOTING POLICIES and PRACTICES followed by asset managers and institutional investors in investee companies (more and more frequently assigned on proxy and voting external professional advisors)
  - - - 1. “Identification of shareholders
        
        “Member States shall ensure that companies have the right to identify their shareholders. Member States may provide for companies having a registered office on their territory to be only allowed to requestthe identification of shareholders holding more than a certain percentage of shares or voting rights, Such a percentage shall not exceed 0,5 %.
      - “Facilitation of the exercise of shareholder right
      - Non-discrimination, proportionality and transparency of costs
    - - Engagement policy
      - Investment strategy of institutional investors and arrangements with asset managers
      - “Transparency of asset managers
      - Transparency of proxy advisors
    - - Right to vote on the remuneration policy
      - “Information to be provided in and right to vote on the remuneration report
      - Transparency and approval of related party transactions
- - - - See Articles 104 (decision on antitakeover/defensive measures); 121 (increase of reciprocal cross-participation from 2% up to 5%, of capital represented by voting shares); 133 (Exclusion upon request from trading)
      - See Article 153 (Obligation to report to the shareholders’ meeting)
    - - Moreover see Article 2389 civil code together with Article 114-bis Tuif (information to be provided to the market concerning the allocation of financial instruments to corporate officers, employees and collaborators and with Article 123-ter Report on remuneration): Say on Pay principle
        
        :check: Note
        At least twenty-one days prior to the date of the shareholders’ meeting established by article 2364 (paragraph 2) or the shareholders’ meeting established by article 2364-bis second paragraph of the Italian Civil Code, companies with listed shares shall make a report on remuneration available to the public at the company registered offices, on its internet website or in any of the other ways established by Consob regulation, and such report shall be laid out in the two section:
        
        The first section of the report on remuneration explains:
        
        The company’s policy on the remuneration of the members of the administrative bodies, general managers and executive with strategic responsibilities with reference to at least the following year.
        
        The procedures used to adopt and implement this policy
        
        The second section
        
        Provides a suitable representation of each of the items comprising remuneration, including treatment provided for in the event of cessation of office or termination of employment, highlighting the coherence with the company's policy in terms of remuneration approved the previous year
        
        Analytically illustrates the fees paid during the financial
        year of reference, for any title and in any form by the company and by subsidiaries or associates
        
        :check:
        Note:
        Without prejudice to the provisions of articles 2389 and 2409-terdecies, first paragraph, letter a) of the Italian Civil Code and article 114-bis, the shareholders’ meeting called in accordance with article 2364, paragraph two or article 2364-bis, paragraph two, of the Italian Civil Code, resolves in favour or against the section of the report on remuneration. The resolution is not binding. The outcome of voting is made available to the public in accordance with article 125-quater, paragraph 2.
      - See Article 126-bis* (Right to put items on GAM agenda)
- - - - Shareholder-(active) negotiator
      - Shareholder-(passive) underwriter
    - - Share-holder investor
      - Share-holder entrepreneur
    - - FREE-RIDING risk:
        In collective action; dissenting and divergent opinions expressed by exit strategy on the market
      - RATIONAL APATHY syndrome:
        No interest for a continuous and pervasive monitoring activity
        :CHECK: NOTE
        RATIONAL APATHY: The indifference that a voter usually feels when they make the reasonable assumption that his or her vote will not have any real influence on the conclusion of an election
- - - - SHAREHOLDER INVESTORS:
        Whose interest is in the investment itself and in the returns expected there from under the form of dividends and of gain capital invested
      - SHAREHOLDER BUSINESSMAN:
        Whose interest is in the business itself, in the managing of the company and in the positive externalities deriving there from
    - - PRO
        
        Corporate policies steered on a medium-long term horizon
        
        Stable and cohesive corporate policies
      - CON
        
        CONSTRAINS on access to CAPTIAL MARKETS;
        
        IDIOSYNCRASY for entrusting professional managers with the company and business running
        
        Inclination to OPPORTUNISTIC BEHAVIROS
        
        Risk of DISSOCIATION of property and control
        
        Risk of CONSOLIDATION of the control ownership
        
        Risk that can be “leveraged” by means of other instruments: shareholders’ voting agreement, pyramidal groups.
  - - - CON
        
        SHORT-SIGNT managing: high costs for monitoring activity by principal (shareholder) on managers conduct
        
        SHORT-TERM managing policies: maximizing the value of the shares on stock exchange markets (boosting quarterly budgets)
        
        High likelihood of hostile TAKEOVER and CONTRO CONTESTABILITY, with consequent high pressure to managing politics (dangerously) aimed to short-terminism shareholder value maximization”
        
        Risk of dissociation of property and control
      - PRO
        
        EASINESS in the access to capital at LOWER COST
        
        COMPANY'S MANAGEMENT in the hands of PROFESSIONAL
- - - - Limitation of asset disposal when creditors repayment is put in danger
      - Public and exhaustive information on company’s balance sheet and accounts
      - Managers duties and liability towards company’s creditors
      - Subordination of shareholders financings (against the phenomenon of “under-capitalization” of the company that takes frequently place)
      - PIERCING THE CORPORATE VEIL RULE: STERILIZATINO of the SEPARATE LEGAL ENTITY RULE AND OF THE LIMITED LIABILITY RULE IN THE CASE OF ABUSE .
  - - - AGENCY PROBLEM : agency problem (strong property/weak directors): CONTROLLING SHAREHOLDERS (which not always are the majority in terms of capital ownership) vs MINORITY SHAREHOLDERS (which often are the majority in terms of capital ownership); the FIRST ONE have the CHANCE TO EGOISTICALLY SEIZE PRIVATE BENEFITS FROM COMPANY
      - EXAMPLE OF (1): nominating themselves as directors/officers and benefiting from remuneration of such appointment; nominating directors and exercising power of disposal of company assets and/or influencing company’s strategies, deciding dividends politics and therefore increasing their own shares value and ultimately monetizing such value by selling the shares
    - - AGENCY PROBLEM (weak property/strong directors): SHAREHOLDER-INVESTORS are DISPERSED , INCOMPETENT, APATHETIC, WITHOUT SUFFICIENT INCENTIVE FOR a CONTINUOUS AND INCISIVE MONITORING OF DIRECTORS ACITIVITIES (COLLECTIVE ACTION PROBLEM)
- - - - Composition and members profiles
      - Organization and structure
      - Tasks, roles, duties and liabilities
  - - - GOVERING directors’ NOMINATION and SHAREHOLDER VOTING: partial departure from the majority voting rule with members election not reserved only to majority shareholders: voting list systems; - ‘plurality’ voting rule; - minority’s right to elect a candidate (Italy)
      - ASSURING BOD internal “DIVERSITY” as for: - SKILLS, PROFESSIONALexperience, EXPERTISE, VALUES, - origin; GENDER
      - Requiring BOD'S MEMBERS appropriate time for and COMMITTMENT to the MANAGING
      - Requiring SEPARATION between EXECUTIVE and non-EXECUTIVE roles inside BOD, as well as requiring INDEPENDENCE of non-executive members
      - REQUIRING the appointment of SPECIFIC COMMISIONS within BOD vested with an advisory function ON THE KEY AREAS where the potential for conflict of interests is particularly high
    - - STRENGTHENING DIRECTOR'S COMPETENCIES, reserving only certain key decision powers to general shareholders meeting ((charter amendments, share issuance, mergers, divisions, etc)
      - Strengthening BoD’s care and attention in supervising and monitoring adequacy and efficiency of corporate internal organization, as well as, mainly, BoD’s appropriate composition and organization, with the separation between executive and nonexecutive directors role.
      - Strengthening internal audit rules and risk management assets
      - Strengthening directors duties and liabilities (duty of care; duty of loyalty)
    - - FOSTERING ALIGNMENT with SHAREHOLDER’ INTEREST by means of MONETARY INCENTIVES and REWARD STRATEGY (“SAY ON PAY” principle)
      - Avoiding divergence from shareholders’ interests by means of special rules on taking resolutions with a high potential conflict of interests (with a direct and main involvement in the decision-making process of independent and non-executives directors, as well as special cases of ‘whitewash’ shareholders’ resolutions)
- - - - PROFESSIONALISM: Diversified expertise is considered the key to efficient board work. A variety of professional backgrounds is needed to ensure that the board as a whole understands, for example, the complexities of global markets, the company’s financial objectives and the impact of the business on different stakeholders including employees. Accurate assessment of skills and expertise is the single most important factor in selecting new non-executive board members, Therefor recruitment policies which identify the precise skills needed by the board could help increase its ability to monitor the company
        effectively
      - INTERNATIONALISM
      - GENDER DIVERSITY : Gender diversity can contribute to tackling group-think. There is also
        evidence that women have different leadership styles, attend more board meetings and have a positive impact on the collective intelligence of a group Nonetheless, promoting women to boards has as one indisputably positive effect: increasing the pool of talent available for a company’s highest management and oversight functions
  - - - On one side, EU Commission accepts that In Europe, different board structures coexist, Depending on the country, listed companies may put in place either a ‘single board’ system (also called ‘monistic’ or ‘unitary board’ system) a two-tier (or ‘dual board’) system or some form of mixed system, The Commission acknowledges the coexistence of these board structures, which are often deeply rooted in the country’s overall economic governance system, and has no intention of challenging or modifying this arrangement
      - , On other hand, EU Commission states that «regardless of the board structure, board composition plays a key role in a company’s success. Effective oversight of the executive directors or the management board by the non-executive directors or supervisory boards leads to successful governance of the company. In this regard, diversity of competences and views among the board’s members is very important. It facilitates understanding of the
        business organization, and affairs and thus enables the board to challenge the management’s decisions objectively and constructively
      - In contrast, insufficient diversity could lead to a so-called group-think process, translating into less debate, fewer ideas and challengesin the boardroom and potentially less effective oversight of the management board or executive directors. The Commission, encouraged by the results of the 2011 Green Paper consultation, considers that increase transparency as regards board diversity policy could make companies reflect more on the issue and take better account of the need for greater diversity on their boards.
    - - The Commission believes also that (supervisory) boards should give broader consideration to the entire range of risks faced by their company, Extending the reporting requirements with regard to nonfinancial parameters would help in establishing a more comprehensive risk profile of the company enabling more effective design of strategies to address those risks. This additional focus on non-financial aspects would encourage companies to adopt a sustainable and long-term strategic approach to their business.
- - - - COMPOSITION:
        
        The administrative, managerial and supervisory bodies should include in total an appropriate balance of executive/managing and non-executive/supervisory directors such that no individual or small group of individuals can dominate decision-making on the part of these bodies
        
        The present or past executive responsibilities of the (supervisory) board’s chairman should not stand in the way of his ability to exercise objective supervision, On a unitary board, one way to ensure this is that the roles of chairman and chief
        executive are separate; in the case of unitary and dual boards, one option may be that the chief executive does not immediately become the chairman of the (supervisory) board
        
        A sufficient number of independent non-executive or supervisory directors should be elected to the (supervisory) board of companies to ensure that any material conflict of interest involving directors will be properly dealt with.
      - QUALIFICATION AND INDEPEDENT of NON-EXECUTIVE DIRECTORS
        
        «The (supervisory) board should ensure that it is composed of members who, as a whole, have the required diversity of knowledge, judgment and experience to complete their tasks properly
        
        A director should be considered to be independent only if he is free of any business, family or other relationship, with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment
        
        Each director should devote to his duties the necessary time and attention, and should undertake to limit the number of his other professional commitments (in particular any directorships held in other companies) to such an extent that the proper performance of his duties is assured
      - INTERNAL STRUCTURE (organization in board committees)
        
        Boards should be organized in such a way that a sufficient number of independent non-executive or supervisory directors play an effective role in key areas where the potential for conflict of interest is particularly high. To this end, but subject to point 7, nomination, remuneration and audit committees should be created within the (supervisory) board
        
        The nomination, remuneration and audit committees should make recommendations aimed at preparing the decisions to be taken by the (supervisory) board itself, The primary purpose of the committees should be to increase the efficiency of the (supervisory) board by making sure that decisions are based on due consideration, and to help organize its work with a view to ensuring that the decisions it takes are free of material conflicts of interest. The creation of the committees is not intended, in principle, to remove the matters considered from the purview of the (supervisory) board itself , which remains* fully responsible
        for the decisions* taken in its field of competence.
      - TRANSPERANCY AND DISCLOSURE
        
        BoD should always grant SPECIFIC DISCLOSURE by GIVING CLEAR EXPLANATION:
        
        In the event that company decides to create fewer than three committees, reasons of such alternative approach, and how the approach chosen
        meets the objective set for the three separate committees
        
        Annual information about BoD’s internal organization and the procedures applicable for its activities
        
        The (supervisory) board should ensure that shareholders are properly informed as regards the affairs of the company, its strategic approach, and the management of risks
        and conflicts of interest. The roles of directors regarding communication and engagement with shareholders should be clearly delineated.
        
        On annual basis, disclose a profile of BoD’s composition and information on the particular competences of individual directors which are relevant to their service on the BoD.
        
        On annual basis, proper information on the process as well as on conclusions regarding independency evaluation of the non-executive directors
      - 5.BOD’s SELF-EVALUATION: BOD is called upon to carry on a self-evaluation (the outcomes of which must be disclosed to the market
        
        Every year, on BoD in itself and its performance, encompassing an assessment of its membership, organization and operation as a group, an evaluation of the competence and effectiveness of each board member and of the board committees, and an assessment of how well the board has performed against any performance objectives which have been set.
        
        On preservation of a proper balance in terms of qualifications possessed by BoD’s members, in order to grant that BoD, as a whole, has the required diversity of knowledge, judgment and experience to complete their tasks properly
        
        On directors specific training and updating of their skills and knowledge
        
        4.On assessment of the effective independence of directors
  - - - This non-mandatory set of rules and norms emphasizes and points out some crucial issues regarding an initiative aimed at encouraging an appropriate regulatory regime for directors’ remuneration that, on the basis of the fundamental assumption that «the form, structure and level of directors' remuneration are matters falling within the competence of companies and their shareholders, This should facilitate the recruitment and retention of directors having the qualities required to run a company, AND taking into consideration the fact that remuneration is one of the key areas where executive directors may have a conflict of interest and where due account should be taken of the interests of shareholder, Remuneration systems should therefore be subjected to appropriate governance controls, based on adequate information rights. In this respect, it is important to respect fully the diversity of corporate governance systems within the Community, which reflect different Member States' views about the roles of corporations and of bodies responsible for the determination of policy on the remuneration of director, and the remuneration of individual directors, and strengthens TWO main rules:
        
        Disclosure of accurate and timely information, of a clear and comprehensive overview of the company’s remuneration policy, as well as of information regarding individual directors’ contracts
        
        Granting shareholders an effective chance to express their views and an opportunity to debate the remuneration policy on the basis of a comprehensive disclosure
        
        :check: Note:
        Provision embodied.
        
        Remuneration policy: disclosure by the company of a remuneration statement, which is posted on theri official website, focusing on:
        
        Focuses on the company's policy on directors' remuneration for the following financial year and, if appropriate, the subsequent years, It should also contain an overview of the manner in which the remuneration policy has been implemented in the previous financial year. Particular emphasis should be laid on any significant changes in the listed company's remuneration policy as compared to the previous financial year
        
        Summarizes and explains the listed company's policy with regard to the terms of the contracts of executive directors, This should include, inter alia, information on the duration of contracts with executive directors, the applicable notice periods, and details of provisions for termination payments and other payments linked to early termination under contracts for executive directors
        
        Discloses Information concerning the preparatory and decision-making process used for determining the listed company's remuneration policy for directors
        
        Remuneration of individual directors: disclosure of the total remuneration and other benefits granted to individual directors over the relevant financial year should in detail,in the annual accounts or in the notes to the annual accounts or, where
        applicable, in the remuneration report
        
        Shareholders’ vote
        
        1. Without prejudice to the role and organization of the relevant bodies responsible for setting directors’ remunerations, on the remuneration policy and any significant change to the remuneration policy. (to be an explicit item on the agenda of the annual general meeting, by means of submitting the remuneration statement to the annual general meeting of shareholders for a vote: the vote may be either mandatory or advisory.
        
        On schemes under which directors are remunerated in shares, share options or any other right to acquire shares or to be remunerated on the basis of share price movements, by way of a resolution at the annual general meeting prior to their adoption
        
        On any substantial change in the terms and conditions of the schemes prior to their adoption (in such cases, shareholders should be informed of the full terms of the proposed changes and should be given an explanation of the effect of the proposed changes
        
        If such arrangement is permissible under national law or under the Articles of Association of the listed company, any discounted option arrangement under which any rights are granted to subscribe to shares at a price lower than the market value of the share on the date when the price is determined, or the average of the market values over a number of days preceding the date when the exercise price is determined
    - - This non-mandatory set of rules and norms emphasizes and points out some ADDITIONAL principles regarding the structure of directors’ remuneration, as set out in a company’s remuneration policy and the process determining remuneration and control on that process
        
        The structure of directors’ remuneration should promote the long-term sustainability of the company and ensure that remuneration is based on performance, Variable components of remuneration should therefore be linked to predetermined and measurable performance criteria including criteria of a non-financial nature. Limits should be set on the variable components of remuneration. Significant variable components of remuneration should be deferred for a certain period, for example, three to five years subject to performance conditions. Further, companies should be able to reclaim variable components of remuneration hat were paid on the basis of data, which proved to be manifestly misstated
        
        t is necessary to ensure that termination payments, so called ‘golden parachutes’, are not a reward for failure and that the primary purpose of termination payments as a safety net in case of early termination of the contract is respected. To that purpose, termination payments should be limited to a certain amount or duration beforehand, which, in general, should not be more than two years’ annual remuneration (on the basis of only the non-variable component of the annual remuneration), and not be paid if the termination is due to inadequate performance or if a director leaves on his own account. This does not preclude termination payments in situations of early termination of the contract, due to changes in the strategy of the company or in merger and/or takeover situations.
        
        Schemes under which directors are remunerated in shares, share options or any other right to acquire shares or be remunerated on the basis of share price movements should be better linked to performance and long-term value creation of the company, Therefore, an appropriate vesting period should apply to shares, whereby vesting is made subject to performance conditions, Share options and rights to acquire shares or be remunerated on the basis of share price movements should be not be exercisable during an appropriate period and the right to exercise them should be made subject to performance conditions. In order to further prevent conflicts of interest of directors who hold shares in the company, these directors should be obliged to retain a part of their shares until the end of their mandate.
        
        In order to facilitate the shareholders’ assessment of the company’s approach to remuneration and strengthen the
        company’s accountability towards its shareholders, the remuneration statement should be clear and easily understandable. Moreover, further disclosure of information relating to the structure of remuneration is necessary
        
        «Remuneration committees, as referred to in Recommendation 2005/162/EC, fulfil an important role in designing a
        company’s remuneration policy, preventing conflicts of interests and supervising the (managing) board’s behavior in the context of remuneration, To strengthen the role of those committees, at least one member thereof should have expertise in the field of remuneration
- - - - Law rules are predominantly NOT MANDATORY (Law rules are predominantly OPTING- OUT)
      - Often BASED on an INTERNAL CONTROL SYSTEM grounded on SHAREHOLDER DIRECT INVOLMENT AND ACTIVITY
      - :check: NOTE
        
        The Law in Private is (substantially) based on “NETWORK OF CONTRACT ”, and, the DIFFERENT PARTIES of the company CONCERNED SPECIFY their CONTRIBUTION and fix their return
        
        Of the essence is to GRANT that this CONTRACTUAL MECHANISM is continuously operating while the individual is a shareholder. Especially, in the absence of a market (stock exchange for example), a GOAL is PURSUED by means of VOICE RIGHTS and EXIT RIGHTS
  - - - CREDITORS are LIMITIED (CONFINED TO) to MAKING CLAIMS against assets that are HELD in the name of (“owned by”) FIRM (COMPANY) itself and have NO CLAIM against assets that the SHAREHOLDERS HOLD in their OWN NAME
      - LIMITED LIABILITY SHIELDS the SHAREHOLDERS from CREDITORS’ claims
      - LMITED LIABILITY is a (strong) FORM of OWNER SHIELDING that is effectively the CONVERSE of the ENTITY SHIELDING .
        
        1.ENTITY SHIELDING PROTECS the ASSETS OF THE FIRM FROM the CREDITORS.
        
        2.LIMITED LIABILITY PROTECTS the ASSET OF THE FIRM'S OWNERS from the CLAIM OF THE FIRM's CREDITOR
      - Together, they set up a REGIME of ASSET PARTITIONING whereby BUSINESS ASSETS are PLEDGED as SECURITY to business CREDITORS, while the PERSONAL ASSETS of the business’s ONWERS are reserved for the owners’ PERSONAL CREDITORS**
        :check: NOTE
        ASSET PARTITIONING is the division of commonly-owned assets into pools that can be separately pledged to different groups of creditors. We are concerned here with partitioning between a person's personal assets and their business assets
      - ASSET PARTITIONING permits
        
        Isolate different line of business for the purpose of obtaining credit
        
        Can be used as a means of sharing, and reducing the risk
        
        Flexibility in the allocation of risk and return between equity holders and debt holders
        
        Facilitates tradability of the firm’s shares
        
        Facilitates “delegated management”
    - - The firm SERVES as a SINGLE CONTRACTING PARTY that is DISTINCT FROM the various INDIVIDUALS who OWN and MANAGE the firm,
        
        The law provides for procedures by which both the FIRM and COUNTERPARTIES can BRING LAWSUITS on the contracts/relationships entered into in the name of the firm.
        
        Firm OPERATES with THIRD PARITIES by means of SPECIFIC DESIGNATED INDIVIDUALS who have authority to act.
      - Therefore, firm is a SEPARATE ENTITY, has a SEPARATE PATRIMONY
        
        RIGHTS of OWNERSHIP OVERS its DESIGNED ASSETS INCLUDE the RIGHT TO USE THEM as well as to make them available for ATTACHMENT (only) by its creditors**
        :CHECK: NOTE:
        ATTACHMENT is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor
        
        However, the ASSETS are CONCEIVED as BELONGING to the FIRMS, so they are UNAVAILABLE for ATTACHMENT by the personal creditors of the firm’s owners
      - :check: Note
        
        Rule of PRIORITY
        
        Rule of LIQUIDATION PROTECTION
    - - SHARED OWNERSHIP is tailored by CONTRIBUTION of CAPITAL: the OWNERSHIP RIGHTS
        
        The right to control the firm.
        
        The right to receive the firm’s net earnings
        
        :check: Note
        
        Each EQUITY INTEREST in the company is STANDARDIZED and SHAPED on the basis of a NOMINAL VALUE EQUALLY ASSIGNED TO ALL shares
        
        Each share normally BEAR EQUAL RIGHTS & DUTIES
        
        Different RIGHTS can be attributed only to DIFFERENT CLASSES OF SHARES
        
        Rights and duties are incorporated in the share and PASS ON with SHARES TRANSFER
        
        Each SHARE is therefore FUNGIBLE with any other share
    - - :CHECK: NOTE:
        Standard LEGAL FORMS for enterprise organization can be allocated in two different MODELS
        
        PARTNERSHIP
        Rules grant power to each (or a special group) of partners to MANAGE as well as to MONITOR THE FIRM in the course of business and rules require for fundamental decisions unanimity
        
        CORPORATION
        Principal authority over corporate affairs is typically dissociated from the status of shareholders and vested in a separate and special office/organ: BOARD OF DIRECTORS- as per the MANAGEMENT and BOARD OF AUDITORS - as per the SUPERVISING and MONITORING of the management
        
        MANAGEMENT ORGAN has 4 basic FEATURES
        
        The ORGAN is the “BAILEE” of the firm’s general government, separate from the operational and day-to-day managers/officers of the corporation
        
        The ORGAN (at least the SUPERVISORY board in two-tier system) is ELECTED by the firm’s SHAREHOLDERS
        
        The ORGAN is formally DISTINCT from the firm’s SHAREHOLDERS and is the EXCLUSIVE DEPOSITORY of MANAGING activity
        
        The organ is ordinarily a MULTIPLE MEMBERS BOARD
    - - FREELY TRANSFERABLE shares MAXIMIZE the LIQUIDITY of SHAREHOLDINGS and the ability of shareholders/INVESTORS to DIVERSIFY INVESTMENT AND PORTFOLIO, , and they also give the firm MAXIMAL FLEXIBILITY in RAISING CAPITAL
        
        MAXIMIZE the LIQUIDITY OF SHAREHOLDING
        
        The possibility of shareholders to DIVERSIFY THERI PORTFOLIO AND INVESTMENT.
        
        Give the firm MAXIMAL FLEXIBILITY in RAISING CAPITAL
- - - - Following the Green Paper, the difficulties are:
        
        Short-termism of capital markets
        
        The agency relationship between institutional investors and asset managers
        
        Short-termism and asset management contract
        
        Lack of transparency about the performance of fiduciary duties
        
        Other possible obstacles to engagement by institutional investors
        
        Proxy advisor
        
        Shareholder identification
        
        Minority shareholder protection
        
        Therefore, the issue to tackle is
        
        Fostering a long-term prospective in investments
        
        Enhancing a shareholder cooperation by means of active participation to decision making processes
        
        On a «corporate field», the answer is composite and requires joint measures
        
        Enhancing transparency and information in order to facilitate appropriate awareness in the decisions
        
        Lessening participation to assembly meetings by means of:
        
        Remote (but direct) participation (vote by correspondence/electronic voting)
        
        Indirect participation (voting by means of proxies)
        
        «Rewarding» participation to assembly meetings
        
        Rewarding» long-term holding of equity stake
- - - - That is to say that dominant shareholders shall need to obtain the consent of a greater number of shareholders
      - That is to say that the formers shall need to share information and data with the latters as well as they shall seek their consent on the specific items on the meeting agenda
- - - - Shares holding (uninterrupted) period (no less than one year or the lesser period running between two consecutive payment dates of the annual dividend)
      - Assignment of a right to a dividend increase (of no more than 10 percent of the dividend distributed to the other shares)
      - Reward assigned only to minimal shareholders (holding investment lower than 0.5 percent of the company capital or lesser percentage specified by the Articles of Association) and other than (individually and/or jointly) «dominant shareholders» (those who, during said period, even temporarily exercised a dominant, individual or jointly with other shareholders by means of a shareholders' agreement as envisaged by article 122, or significant influence over the company.
      - Assignment of the right on an individual basis and NOT INCORPORATED in SHARES
        
        Disposal of the share, against payment or free of charge, shall result in loss of the benefit
        
        Shares on which the benefits indicated in subsection 1 are granted shall not constitute a special category of shares pursuant to Article 2348 of the Civil Code
        
        The resolution to amend the Articles of Association as
        envisaged by subsection 1 does not assign the right to withdrawal in accordance with article 2437 of the Italian Civil Code
  - - - :check: Note
        
        Exception to «no vote without share» rule, allow that special voting rights can be granted also to owners of interest holding not in the form of shares (part of the capital) but of «financial instruments
      - And, still being in force the condition that such shares without “full” voting right cannot exceed half of the total issued capital as well as the prohibition of “multiple voting shares”
    - - :check: NOTE
        
        An Exception to «no share without vote» it is NOW PERMITTED the ISSUANCE OF SHARES with NO VOTING RIGHT as well as with limited and/or suspended voting right shares
      - And ONLY IN THE NON-LISTED companies (private companies) PERMITTED also the imposition of scalar/staggered votes as well as of voting caps
    - - A first departure came into effect with 1974 Reform, whereby: a special category of privileged shares could be issued () in lieu of privileges (granted on a financial level), such shares had no voting right at al
      - A second departure came into effect with 2003 Reform, whereby (in essence) the inseparability of the combination of voting right and share ownership has been (partially) broken
    - - The «one share one vote» norm can only be altered “in minus” (shares with “detuned” vote) and not “in maius” (shares with “multiple” vote): voting right conferred only “under” the risk, not “over” the risk)
      - Moreover, such a deviation can only take place in Private Companies
    - - Private Companies: new Section 2351, fourth par., permits the issuance of “multiple voting shares” (with the threshold of 3
        votes per share), either for all shareholders’ meeting resolutions or for only specific items on the meeting agenda, as well as
        subordinated to no arbitrary conditions.
      - PLC:
        
        Exception to «no share without vote» norm: together with the issuance of shares with no voting right as well as with limited and/or suspended voting right shares is now permitted also the imposition of scalar/staggered votes as well as of voting caps, even even without granting to shareholders any economical privilege
        
        New Article 127-sexies Tuif, bans the issuance of “multiple voting shares”, but allows multiple-voting shares (up to a maximum of three votes per share)issued before the start of trading on a regulated market maintaining their features and rights
        
        New Article 127-quinquies Tuif permits the articles of association to specify that increased voting rights may be, attributed, up to a maximum of two votes for each share belonging to the same subject for an uninterrupted period of no less than twenty-four months: an advantage granted to the shareholder (and not incorporated in the share) in function of the holding period;
        
        :check: Note
        Some remarks:
        
        Multiple-voting shares issuance: way of promoting/fostering capital investments in (private) companies; vote increase: way of fostering in PLCs long-term vesting of equity stakes in public companies and therefore, on one hand, curbing down short-termism (negative) effects and, on the other hand, promoting shareholders involvement in monitoring activities.
        
        But multiple-voting is indirectly allowed in public companies toounder the only condition that multiple-voting shares issuance foregoes the start of trading on a regulated market: the law does not say for how long before the trading on stock
        market starts; the law does not prohibit shares issuances made closed to (and opportunistically arranged in the light of) such a starting
- - - - Explain in what manner the company has departed from a recommendation.
      - Describe the reasons for the departure, avoiding vague and formalistic expressions
      - Describe how the decision to depart from the recommendation was taken within the company
      - Where the departure is limited in time, explain when the company envisages complying with a particular recommendation
      - if it is the case, describe the measure taken as an alternative to the relevant non-complied recommendations and explain how such alternative measure achieves the underlying objective of the recommendation or clarify how it contributes to their good corporate governance
      - :check: Note
        The decision NOT to comply with some IGCC’s recommendations does not involve a negative evaluation a priori, being aware of the fact that this may be contingent on several factors:
        
        The company may not have reached the structure that allows the full implementation of all recommendations (for example: in case of a recently listed company)
        
        It may evaluate that some recommendations are less useful for/incompatible with their corporate governance model or with the legal and financial features of the company.
        
        It might have adopted other governance solutions, as an alternative to the non-complied recommendation, which enable the company to reach the same underlying objective
  - - - PRINCIPLE
        
        LISTED COMPANIES are governed by a BOD that meets at regular intervals, adopts an organisation and a modus operandi which ENABLE IT TO PERFORM ITS FUNCTION EFFECTIVELY
        
        The DIRECTOR ACTS AND MAKE DECISION with FULL KNOWLEDGE OF THE FACT and AUTONOMOUS PURSUING and PLACING PRIORITY ON THE OBJECTIVE, CREATING VALUE FOR SHAREHOLDERS over a medium-long term period.
      - CRITERIA
        
        Criteria 1 :
        
        BOD MUST BE a COLLEGIATE ORGAN, ACTING, PERFORMING its duties AS A SUPERVISORY BOARD.
        
        BOD must perform at least annually an evaluation of the performance of the BOD and its committees, as well as their size and composition, taking into
        account the professional competence, experience, (including managerial experience) gender of its members and number of years as director
        
        Provide information in the Corporate Governance Report on (1) its composition, indicating for each member the qualification, relevant role held within the BoD,main professional characteristics as well as the duration of his/her office since the first appointment (2) the application of article 1 of IGCC; (3) how the self-assessment procedure has developed;
        
        Directors shall accept the directorship when they deem that THEY CAN DEVOTE NECESSARY TIME TO THE DILIGENT PERFORMANCE OF THERI DUTIES
        
        BOD shall issue guidelines regarding the maximum number of offices as director or statutory auditor for the types of companies referred to in the above paragraph that may be considered compatible with an effective performance of a director’s duties
        
        The chairman of BOD shall ensure that the documentation relating to the agenda of the Board is made available to directors and statutory auditors in a timely manner prior to the Board meeting. BOD shall provide information in the Corporate Governance Report on the promptness and completeness of the pre-meeting information, providing details, inter alia, on the prior notice usually deemed adequate for the supply of documents and specifying whether such prior notice has been usually observed.
      - COMMENT:
        BOD has the primary responsibility for determining and pursuing the strategic objectives of the issuer and of the group of which it is a member or which it heads The chairman is responsible for promoting the constant performance of such duty. Decisions of each director must be autonomous, to the extent he/she makes his/her choices with free judgment, doing so in the interest of the issuer and the generality of the shareholders. Therefore, even when management choices have been evaluated, addressed or otherwise influenced in advance, each director shall pass resolutions in autonomy, adopting resolutions which may, reasonably lead – primarily – to the creation of value for the generality of the shareholders in the medium-long term
    - - PRINCIPLES
        
        The BOD shall be made up of executive and non-executive directors, who should be ADEQUTELY COMPETENT & PROFESSIONAL
        
        NON-EXECUTIVE directors shall BRING THEIR SPECIFY EXPERTISE to BOARD DISCUSSION and CONTRIBUTE TO THE ADOPTION of FULLY-INFORMED DECISION, PAYING PARTICULARY CARE TO THE AREAS where conflicts of interest may exist.
        
        The number, competence, authority and time availability of non-executive directors shall be such as to ensure that their judgement may have a significant impact on the taking of Board’s decisions
        
        It is appropriate to avoid the concentration of corporate offices in one single individual
        
        Where the BOD has delegated management powers to the chairman, it shall disclose adequate information in the CG REPORT on the reasons for such organisational choice.
      - Criteria
        
        1. Individuation of the ‘executive directors’ (managing directors having strategic relevance; directors vested with management duties; directors who are members of the executive committee of the issuer);
        
        Directors shall know the duties and responsibilities relating to their office. The chairman of BoD shall use his best efforts to allow the directors and the statutory auditors after the election and during their mandate, to participate in initiatives aimed at providing them with an adequate knowledge of the business sector where the issuer operates, of the corporate dynamics and the relevant evolutions, as well as the relevant regulatory and self-regulatory framework
        
        BoD shall designate an independent director as lead independent director (‘LID’), in three circumstances: (i) in the event that the chairman of the BoD is the chief executive officer of the company, (ii) in the event that the office of chairman is held by the person controlling the issuer; (iii) whether requested by the majority of independent directors;
        
        LID (a) represents a reference and coordination point for the requests and contributions of non-executive directors and, in particular, those who are independent pursuant to Article 3 of IGCC, (b) cooperates with the Chairman of the BoD in order to guarantee that directors receive timely and complete information
      - Comment:
        
        The non-executive directors enrich the Board’s discussion with competences formed outside the company, having a general strategic character or a specific technical one. Such competences permit to analyse the different matters under discussion from different standpoints and, therefore, contribute to nourish the dialectics that is the distinctive precondition for a meditated informed corporate decision. The contribution of non-executive directors appears to be useful on such subject matters in which the interests of executive directors and those of the shareholders may not coincide, such as the remuneration of the executive directors and in relation to the internal control and risk management systems
        
        The international best practice recommends to avoid the concentration of offices in one single individual without adequate counterbalances, in particular, the separation is often recommended of the roles of chairman and chief executive officer, the latter meant as a director who by virtue of the delegations of powers received and the concrete exercise of these, is the main responsible officer for the management of the issuer (CEO), The Committee is of the opinion that, also in Italy, the separation of the above-mentioned roles may strengthen the characteristics of impartiality and balance that are required from the chairman of the Board of Directors. The Committee, in acknowledging that the existence of situations of accumulation of the two roles may satisfy, in particular in issuers of smaller size, valuable organizational requirements, recommends that, should this be the case, the figure of the lead independent director be created.
    - - PRINCIPLE
        
        An adequate number of non-executive directors shall be independent, in the sense that they do not maintain, directly or indirectly or on behalf of third parties nor have recently maintained any business relationships with the issuer or persons linked
        to the issuer, of such a significance as to influence their autonomous judgement
        
        The directors’ independence shall be assessed by the BOD after the appointment and, subsequently, on a yearly basis, The results of the assessments of the Board shall be communicated to the market
      - CRITERIA
        
        The BOD shall evaluate the independence of its non-executive members having regard more to the substance than to the form and keeping in mind that a director usually does not appear independent in a (open and by way of example) list
        of events.
        
        The number and competences of independent directors shall be adequate in relation to the size of the Board and the activity performed by the issuer; moreover, they must be such as to enable the constitution of committees within the Board, according to the indications set out in the Code. As for issuers belonging to FTSE-Mib index, at least one third of the Board of Directors members shall be made up of independent directors. Anyway, independent directors shall not be less than two
        
        At least once a year, the BoD shall evaluate the independency of each member. The BoD shall notify the result of its evaluations, after the appointment, through a press release to the market and subsequently, within the Corporate Governance
        Report. In the documents mentioned above, the Board of Directors shall:
        
        Disclose whether they adopted criteria for assessing the independence which are different from the ones recommended by the Code, also with reference to individual directors, and
        if so, specifying the reasons;
        
        Describe quantitative and/or qualitative criteria used, if any, in assessing the relevance of relationships under evaluation
        
        The Board of statutory auditors shall ascertain, in the framework of the duties attributed to it by the law, the correct application of the assessment criteria and procedures adopted by the Board of Directors for evaluating the independence of its members. The result of such controls is notified to the market in the Corporate Governance Report or in the report of the Board of statutory auditors to the shareholders’ meeting
        
        The independent directors shall meet at least once a year without the presence of the other directors
      - COMMENT
        
        Independence of judgment is required of all directors, executive and nonexecutive alike: directors who are conscious of the duties and rights associated with their position always bring independent judgment to their work. In particular, non-executive
        directors may provide an independent unbiased judgment on the proposed resolutions, since they are not directly involved in the operational running of the company. The most delicate aspect in issuers with a broad shareholder base consists in aligning the interests of executive directors with those of the shareholders. In such companies, therefore, the predominant aspect is their independence from the executive directors. In issuers with concentrated ownership, or where a controlling group of shareholders can be identified, the problem of aligning the interests of the executives directors with those of the shareholders continues to exist, but there emerges the need for some directors to be independent also from the controlling shareholders, or shareholders which are, in any case, able to exercise a dominant influence
        
        The Committee believes that the presence in the BoD of directors who may be qualified as “independent” is the most suitable solution for guaranteeing the composition of the interests of all the shareholders, both majority and minority ones
    - - PRINCIPLE
        
        The BOD SHALL ESTABLISH among its members ONE OR MORE COMMITTEES with PROPOSING AND CONSULATIVE FUNCTIONS ACCRODING TO what set out in IGCC’s following criteria
      - CRITERIA
        
        The establishment and functioning of the committees recommended and governed by the IGCC, remuneration committee, and control and risk committee shall meet some specific and functional criteria (therein stated) which are substantially intended to grant an efficient and effective activity and role to be disclosed to the market (by means of the Corporate Governance Report)
        
        The establishment of one or more committees may be avoided and the relevant duties may be assigned to the BoD under
        the coordination of the Chairman and provided that:
        
        Independent directors are at least half of the BoD members; if the number of the Board members is odd, a rounding down to the lower unit shall be carried out.
        
        Adequate time is dedicated during the Board meetings to actions that the IGCC requires the Committees to carry out, and this circumstance is disclosed in the Corporate Governance Report
        
        As far as the control and risk committee is concerned, the issuer is neither controlled by another listed company nor it is subject to direction and coordination, The BoD describes in detail in the Corporate GovernanceReport the reasons underlying the choice not to establish one or more committees, in particular, it provides adequate grounds for the choice not to establish the risks and control committee in consideration of the complexity level of the issuer and the sector in which it operates, In addition, the Board shall periodically reassess the choice made
      - COMMENT
        
        The BoD shall perform its duties collectively. An organizational procedure that may increase the efficiency and effectiveness of its works is represented by the establishment among its members of specific committees having consultative and proposing functions.
        
        Such committees, as it appears from the best Italian and international practices, far from replacing the Board in the performance of its duties may usefully carry out a preliminary role – which is represented by the formulation of proposals, recommendations and opinions- – for the purpose of enabling the Board to adopt its decisions with a better knowledge of the facts, Such role may be particularly effective in relation to the handling of matters which appear to be delicate also because they are a source of potential conflicts of interest.
    - - PRINCIPLE
        
        The BOD shall establish among its members a committee to propose candidates for appointment to the position of director, made up, for the majority, of independent directors
      - CRITERIA
        
        The committee to propose candidates for appointment to the position of director shall be vested with the following functions:
        
        To express opinions to the BoD regarding its size and composition and express recommendations with regard to the professional skills necessary within the Board as well with regard to the topics indicated by articles 1.C.3. and 1.C.4.;
        
        Submit the BoD candidates for directors offices in case of co-optation, should the replacement of independent directors be necessary
        
        The BoD shall evaluate whether to adopt a plan for the succession of executive directors. In the event of adoption of such a plan, the issuer shall disclose it in the Corporate Governance Report. The review on the preparation of the above mentioned plan shall be carried out by the nomination committee or by another committee established within the BoD in charge of this task
      - COMMENT
        
        The Committee recommends that for the appointment of directors a procedure, which should ensure transparency and a balanced composition of the Board, is followed
        
        Issuers are required to establish, within the BoD, a nomination committee, made up for the majority of independent directors, vested with one or more of the functions listed in the criteria
        
        The Committee is aware of the fact that the nomination committee institution is historically born in systems characterized by a high degree of fragmentation of the shareholding structure for the purpose of ensuring an adequate level of independence of the directors with respect to the management. Above all, the Committee acknowledges that in the presence of a large shareholder base it performs a function of particular importance in the identification of the candidates for the office of director. However, as for the issuers that are characterized by a high level of proprietary concentration, the nomination committee may perform a useful consultative and advisory role in the identification of the best composition of the Board, indicating the professional figures whose presence may favor a correct and effective functioning, giving possible contributions for the preparation of the succession plan of executive directors
    - - PRINCIPLE
        
        The REMUNERATION of directors and key management personnel shall be established in a sufficient amount to ATTRACT, RETAIN and MOTIVATE people with the PROFESSIONAL SKILLS, OTHER SKILLS to SUCESSFULLY MANAGE THE ISSUER.
        
        The remuneration of executive directors and key management personnel shall be defined in such a way as to ALIGN THERI INTERESTS WITH PURSUING THE PRIORITY OBJECTIVE OF CREATING VALUE FOR SHAREHOLDERS in a medium-long term timeframe With regard to directors with managerial powers or performing, also de-facto, functions related to business management, as well as with regard to key management personnel, a significant part of the remuneration shall be linked to achieving specific performance objectives, possibly including noneconomic objectives identified in advance and determined consistently with the guidelines contained in the policy described in principle. The remuneration of non-executive directors shall be proportionate to the commitment required from each of them, also taking into account their possible participation in one or more committees
        
        The BOD shall establish among its members a remuneration committee, made up of independent directors. Alternatively, the committee may be made up of non-executive directors, the majority of which to be independent; in this case, the chairman of the committee is selected among the independent directors. At least one committee member shall have an adequate
        knowledge and experience in finance or remuneration policies, to be assessed by the BoD at the time of his/her appointment
        
        In case of the end of office and/or the termination of the employment relationship with an executive director or a general manager, the issuer discloses, through a press release, detailed information, following the internal process leading to the assignment or recognition of indemnities and/or other benefits.
      - CRITERIA
        
        The policy for the remuneration of executive directors and other directors covering particular offices shall define guidelines on the issues and consistently with specific criteria, which are substantially intended to grant that managing activity
        is addressed to the creation of value for the shareholders in the medium long term and that remuneration is awarded only for and upon the achievement of predetermined, measurable and specific performance objectives
        
        In preparing plans for share-based remuneration, the BoD shall ensure that:
        
        Shares, options and all other rights granted to directors to buy shares or to be remunerated on the basis of share price movements shall have an average vesting period of at least three years
        
        The vesting referred above shall be subject to predetermined and measurable performance criteria.
        
        Directors shall retain a certain number of shares granted or purchased through the exercise of the rights referred to in paragraph (1) until the end of their mandate;
        
        The remuneration of non-executive directors shall not be linked to the economic results achieved by the issuer, Nonexecutive directors shall not be beneficiaries of share-based compensation plans, unless it is so decided by the annual shareholders’ meeting, which shall also give the relevant reason
        
        . The remuneration committee shall:
        
        Periodically evaluate the adequacy, overall consistency and actual application of the policy for the remuneration of directors and key management personnel
        
        It shall formulate proposals to the BoD in that regard
        
        Submit proposals or issues opinions to the BoD for the remuneration of executive directors as well as for the identification of performance objectives related to the variable component of that remuneration
        
        It shall monitor the implementation of decisions adopted by the BoD and verify, in particular, the actual achievement of performance objectives
        
        No participation of the director at Remuneration Committee meetings where is under discussion his/her remuneration
        
        Independency of the external consultant on market standars for remuneration eventually used by the Remuneration Committee
        
        According to principle 6.P.5., the press release should provide adequate and full disclosure on indemnities and other benefits to be paid on executive mandate termination
      - COMMENT
        
        The structure of the remuneration of executive directors and key management personnel should promote the sustainability of the and ensure that the remuneration is based on results actually delivered. To this end, it is recommended issuer in the medium-long term that the variable components are linked to predetermined and measurable criteria.
        
        IGCC recommends that the remuneration policy establishes limits on the variable component, which need not necessarily be construed as caps expressed in absolute values
        
        The share-based compensation plans, if properly structured, can also be a suitable way to align the interests of executive directors and key management personnel with those of the shareholders. The IGCC recommends the adoption of certain measures aimed at discouraging their beneficiaries from seeking to increase the short term market value of the shares, undermining the creation of value in the medium-long term.
        
        The complexity of the remuneration issues require that the related decisions of the BoD shall be supported by the preliminary activity and proposals of a remuneration committee
        
        The remuneration committee shall report to the shareholders on the exercise of its functions; for this purpose the chairman or another committee member should be present to the annual shareholders’ meeting
    - - PRINCIPLE
        
        Each issuer shall adopt an internal control and risk management system consisting of policies, procedures and organizational structures aimed at identifying, measuring, managing and monitoring the main risks. Such a system shall be integral to the organizational and corporate governance framework adopted by the issuer and shall take into consideration the reference model and the best practices that are applied both at national and international level.
        
        An effective internal control and risk management system contributes to the management of the company in a manner consistent with the objectives defined by the BoD promoting an informed decision-making process. It contributes to ensuring the safeguarding of corporate assets, the efficiency and effectiveness of management procedures, the reliability of financial
        information and the compliance with laws and regulations, including the by-laws and internal procedures
        
        The internal control and risk management system involves each of the following corporate bodies depending on their related responsibilities:
        
        The BoD, that shall provide strategic guidance and evaluation on the overall adequacy of the system, identifying within the Board (i) one or more directors to be charged with the task of establishing and maintaining an effective
        internal control and risk management system, and (ii) a control and risk committee in line with the requirements set forth by principle 7.P.4., to be charged with the
        task of supporting, on the basis of an adequate control process, the evaluations and decisions to be made by the BoD in relation to the internal control and risk management system, as well as to the approval of the periodical financial reports
        
        The person in charge of internal audit, entrusted with the task to verify the functioning and adequacy of the internal control and risk management system
        
        3.Tthe other roles and business functions having specific tasks with regard to internal control and risk management, organised depending on the company’s size, complexity and risk profile
        
        The Board of statutory auditors, also as “audit committee”, which is responsible for oversight of the internal control and risk management system. Each issuer shall provide for coordination methods between the above-mentioned bodies in order to enhance the efficiency of
        the internal control and risk management system and reduce activities overlapping
        
        The control and risk committee is made up of independent directors. Alternatively, the committee can be made up of non-executive directors, the majority of which being independent ones, in this case, the chairman of the committee is selected
        among the independent directors. If the issuer is controlled by another listed company or is subject to the direction and coordination activity of another company, the committee shall be made up exclusively of independent directors. At least one member of the committee is required to have an adequate experience in the area of accounting and finance or risk management, to be assessed by the BoD at the time of appointment.
      - CRITERIA
        
        Specific role and competencies of the BoD, (i) acting (with the opinion of the control and risk Committee) as a supervisory board with regards to the structure and performance of the internal control and risk management system, and taking care (upon proposal of the director in charge of the internal control and risk management system, subject to the favourable opinion of the control and risk committee, as well as after hearing the Board of statutory auditors) of the appointment/revoking/endowment of adequate resources/remuneration of the person in charge of the internal audit function.
        
        Specific role and competencies of the control and risk committee with regards to the independency, adequacy and effectiveness of the internal audit system, as well as with regards to the identification of the main risks of the company, reporting to the BoD, at least every six months, on the occasion of the approval of the annual and half-year financial repor
        
        The chairman of the Board of statutory auditors or another statutory auditor designated by this chairman shall participate in the works of the control and risk committee
        
        Specific role and duties upon the director in charge of the internal control and risk management system, who is entrusted of (i) identifying the main business risks, (ii) implementing BoD’s guidelines regarding the internal control and risk system and assessing its adequacy and effectiveness, (iii) adjusting such system; (iv) requesting internal audit function to carry out reviews of specific operational areas and on the compliance of business operation with rules and internal procedures; (v) reporting to the control and risk committee (or to the BoD) issues and problems that resulted from his/her activity
        
        Specific role and duties upon the person in charge of internal audit
        
        The internal audit function may be entrusted, as a whole or by business segments, to a person external to the issuer, provided, however, that it is endowed with adequate professionalism, independence and organization. The adoption of such organizational choices, with a satisfactory explanation of the relevant reasons shall be disclosed to the shareholders and the market in the Corporate Governance Report
      - 3.COMMENT: in the light of the complication on one hand, and the relevance on the other hand, pertaining to the internal audit
        function, comments are particularly extensive and articulated:
        
        1 Controls system is one of the critical issues of a listed company governance. Its components are rather diversified and range over from the so-called “line control” (or “first level control”) carried out by persons in charge of operational areas to the socalled “management control”, relating to business planning and controlling, up to internal auditing, that is the global assurance on design and functioning of internal controls; the organization of controls architecture depends on the specific variables of the
        relevant issuer
        
        The adequacy and effectiveness of the internal control system governance relies on the role covered by the various players in building and “managing” such a system
        
        BoD’s role: BoD, being a body entrusted with strategic supervision duties, is charged of defining the guidelines of the control system, consistently with the issuer’s risk profile set out by the BoD, in addition, the BoD is charged of evaluating the adequacy of controls system, in compliance with law provisions
        
        Control and risk committee’s role: assisting BoD in carrying out a preliminary verification activity, when performing such duties as well as when examining annual or half-year reports
        
        BoD is also required to identify among its members a director to be charged of establishing and maintaining an internal control and risk management system being alternatively a director having operational delegated powers or a director without delegated powers.
        
        Internal audit function, charged of the “third level” control, has a central position: such function should be absolutely independent, being provided with an autonomous power to drive the preparation of the audit plan and to put into operation single actions; the independency of the function is also linked to the rules set forth in matter of appointment, revocation and remuneration of the relevant person in charge of this office. Powers assigned to the BoD in this subject-matter (subject to the favourable opinion of the control and risk committee) set out the existence of an effective hierarchical relationship in respect of the person in charge of the internal audit office.
        
        Business departments competent for carrying out “second level” controls, charged with the monitoring and management of typical business risks, including operational risk, financial risk, market risk, (non) compliance risk are at a different level;.the Committee believes that each issuer should determine the most suitable organization in order to reach an effective protection from risks,taking into account the features of the company’s business: in this way, the monitoring and management
        of risks may be assigned to managers that are not exclusively devoted to this responsibility. .Second level control departments are intended to enact a structured process of risk’s analysis and are subject to a general review by internal audit function
        
        Special attention must be paid to information flows coming from the internal audit office; the outcome of the reviews made should be reported, generally simultaneously, to the chairmen of Board of Directors, Board of statutory auditors and control and risk committee, as well as to the director in charge of the internal control and risk management system who shall not be allowed to receive information in advance on the activities carried out.
- - - - Because, it seems to PLAY A CRUCIAL ROLE IN SHAPING EU CORPORATE LAW
      - And, COVERING a number of PRINCIPAL AREAS, including FORMATION (STRUCTURE )OF COMPANY, DISTRIBUTION TO SHAREHOLDERS , NEW ISSUE OF SHARES, M&A , ACCOUNTING, AUDITING, mandatory disclosure, insider trading, takeovers
      - It has been PURSUED and IMPLEMENTED By means of different instruments overtime
    - - Because, achieved through GENERAL DISCIPLNES and for SEGMENTS of DISCIPLINES and therefore NOT PERFECTLY transfused and ROOTED INTO DOMESTIC laws and jurisdictions
      - Even before, neither completed on the European community level
- - - - Formation, Validity, Publicity, Disclosure of Companies and Companies’ acts
      - Company Capital
      - Companies extra-ordinary transactions
      - Annual Accounts, Consolidated Accounts and Statutory Audits on such Accounts
      - Private limited liability company
      - Capital Markets and Market Rules
      - Corporate Governance Rules
  - - - General compass of enforcement
      - Mandatory enforcement
      - Direct appliance
    - - Supranational business structures
    - - It is a form of regulation that imposes a loss of sovereignty on State members and that has encountered a great deal of domestic interest group opposition
      - It is a form of regulation that operates by segments
      - Frequently it becomes a form of PSEUDO-HARMONIZATION, so wide and deep is the variability of forms and choices that effectively are allowed under the rules embodied in European Regulations, which notwithstanding a common (and supranational) nature of the rule (therein embodied) the actual contents thereof can significantly vary from case to case
    - - Most part of the European Law is RULED BY AND EMBODIED IN DIRECTIVES, that, in principle, need to be TRANSPOSED by the NATIONAL JURIDICTION
      - Even when immediately enforceable and even if more and more vast, the European Company Law still remains an “ERRATIC LAW”, there are many in the law that are NOT covered and affected by European law, so that the latter - merely overlaps national rules
- - - - :check: Note:Amongst others, THREE important (CGR) recommendations have been recently released
        
        Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board
        
        Commission Recommendation of 14 December 2004,fostering and appropriate regime for the remuneration of directors of listed companies
        
        Commission Recommendation of 9 April 2014: on “Comply or Explain Rule”
  - - - The CORPORATE GOVERNANCE CODE to which the firm is subject
      - The CORPORATE GOVERNANCE CODE which the firm may have voluntarily DECIDED TO APPLY
      - All relevant INFORMATION about the corporate governance practices APPLIED over and BEYOND THE REQUIREMENT OF NATIONAL LAW
      - More over, such statements MUST INCUDE an EXPLAINATION (DETAILED) by the company as to which PARTS of the CORPORATE GOVERNANCE CODE it DEPARTS FROM and the REASONS for doing so, as well as an EXPLAINATION, where the company has decided not to refer to any provisions of a corporate governance code – about the reasons for not doing so (comply or explain)
    - - An EFFECTIVE CORPORATE GOVERNANCE FRAMEWORK is of KEY IMPORTANT TO SOCIETY, as WELL-RUN ORGANIZATIONS are likely to be more COMPETITIVE and more SUSTAINABLE in the long term
      - The corporate governance STATEMENT should PROVIDE ESSENTIAL INFORMATION on the CORPORATE GOVERNANCE ARRANGEMENT of the company
      - HIGH QUALITY DISCLOSURE ON CORPORATE GOVERNANCE OF COMPANY offers useful information to investors and facilitates their investment decisions. It also gives investors MORE CONFIDENCE IN COMPNAY they invest in. INCREASE TRANSPARENCY to the market can also bring, MORE GENERALLY REPUTATED BENEFITS for companies and more LEGITIMACY in the EYES OF STAKEHOLDERS and SOCIETY AS A WHOLE
      - While FULL COMPLIANCE WITH CODE can SEND A POSITIVE MESSAGE to the MARKET, it may NOT ALWAYS be the BEST-APPROACH for a company from a CORPORATE GOVERNANCE PERSPECTIVE.
        Departing from a provision in the code could, in some cases, allow a company to govern itself more effectively. The ‘COMPLY or EXPLAIN’ approach provides companies with FLEXIBILITY by ALLOWING TO APAPT their CG to their size, shareholding structure or sectoral specificities, At the same time, it promotes a CULTURE OF ACCOUNTABILITY , ENCOURAGING companies to REFLECT MORE ON CORPORATE GOVERNANCE ARRANGMENTS
      - The PURPOSE of this recommendation is to PROVIDE GUIDANCE FOR COMPANY, and to ASSIST THEM inIMPROVING THE QUALITY of their CORPORATE GOVERNANCE REPORT. GIVEN THE DIVERSITY of LEGAL TRADITIONS AND APPROACHES, these RECOMMENDATIONS offer a GENERAL FRAMEWORK, which can be FURTHER DEVELOPED and ADAPTED TO THE SPECIFIC NATIONAL CONTEXT
      - In addition to the information that they are required to provide in their corporate governance STATEMENT, companies in SOME MEMBER STATE ARE ALSO REQUIRED TO REPORT HOW THEY APPLIED MAIN PRINCIPLES, RECOMMENDATIONS of the code. In order to FURTHER IMPROVE TRANSPARENCY , all EU LISTED COMPANIES are ENCOURAGED TO REPORT ON HOW THEY FOLLOW THE RELEVANT CODES regarding aspects which may be MOST IMPORTANT for SHAREHOLDERS. More over, in order to facilitate access, companies should consider MAKING THIS INFORMATION AVAILABLE ONLINE
      - APPROPRIATE DISCLOSURE of DEPARTURES from the RELEVANT CODE and of *THE REASONS for such DEPARTURES is EXTREMELY IMPORTANT TO STAKEHOLDERS can make IMFORMED-DECISION about INVESTMENT, as DISCLOSURE REDUCES INFORMATION ASYMETRY BETWEEN the company DIRECTORS and its SHAREHOLDERS, therefore, DECREASES THE MONITORING COST for the latter. Companies should clearly indicate WHICH RECOMMENDATION OF CODE they have DEPARTED FROM and, for each instance provide an explanation regarding: the MANNER IN WHICH COMPANY HAS DEPARTED, the REAONS FOR DEPARTURES, the way in which the decision to depart from a recommendation has been arrived at, the timeframe of the departure and the MEASURES** taken to ensure that the company action remains consistent with the objectives of the recommendation, and the codes.
      - In providing this information, companies should AVOID USING STANDARDIZED LANGUAGE and should focus on the specific company context that explains the departure from a recommendation. The EXPLAINATIONS should be STRUCTURED AND PRESENTED in such a way that they can be EASILY UNDERSTOOD AND APPLIED. This will make it easier for SHAREHOLDERS to ENGAGE IN a CONSTRUCTIVE DIALOGUE with the company
      - An EFFECTIVE ‘COMPLY OR EXPLAIN ’ approach requires EFFICIENT MONITORING to MOTIVATE BUSINESS to COMPLY WITH CORPORATE GOVERNANCE CODE or to EXPLAIN NON-COMPLIANCE; various actors, such as boards, auditors and shareholders are involved in monitoring the information disclosed by companies. Boards and shareholders also have an important role to play in encouraging good quality explanations. More importantly, more ACTIVE MONITORING by shareholders, as the owners of company, could lead to better corporate governance practices.
      - :check: Note: it has been STATED the FOLLOWING
        
        The purpose of this Recommendation is to PROVIDE GUIDANCE to MEMBER STATE, BODIES RESPONSIBLE FOR national corporate governance codes, companies and other parties concerned, The guidance aims to improve the overall quality of corporate governance statements published by companies in accordance with Article 20 of Directive 2013/34/EU, specifically, the quality of explanations provided by companies in case of departure from the recommendations of the relevant corporate governance code
        
        It is recommended that, where applicable, corporate governance codes make a clear distinction between the parts of the code which cannot be derogated from the parts which apply on a ‘comply or explain’ basis and those which apply on a purely voluntary basis.
        
        Further improve transparency for shareholders, investors and other stakeholders, companies should describe how they have applied the relevant corporate governance code recommendations on the topics of most importance for shareholders, The information should be sufficiently clear, accurate and
        comprehensive to enable shareholders, investors and other stakeholders to gain a good understanding of the manner in which the company is governed. More over, it should refer to the company's specific characteristics and situation, such as size, company structure or ownership or any other relevant features
        
        Quality of explanations in case of departure from a code
        
        Companies should clearly state which specific recommendations they have departed from, and, for each departure from an individual recommendation
        
        Explain in what manner the company has departed from a recommendation
        
        Describe the reasons for the departure;
        
        Describe how the decision to depart from the recommendation was taken within the company
        
        Where the departure is limited in time, explain when the company envisages complying with a particular recommendation
        
        Where applicable, describe the measure taken instead of compliance and explain how that measure achieves the underlying objective of the specific recommendation or of the code as a whole, or clarify how it
        contributes to good corporate governance of the company
        
        The information should be sufficiently clear, accurate and comprehensive to enable shareholders, investors and other stakeholders to assess the consequences arising from the departure from a particular recommendation. It should also refer to the specific characteristics and situation of the company, such as size, company structure or ownership or any other relevant features
        
        Explanations for departures should be clearly presented in the corporate governance statement in such a way that they are easy to find for shareholders, investor and stake-holders
- - - - The statute provides for members of the BOD to BE ELECTED on the basis of LISTS OF CANDIDATES and DEFINES the MINIMUM EQUITY HOLDING REQUIRED FOR THIER PRESENTATION, at a threshold not above a fortieth of the share capital or at a different threshold established by Consob by means of regulation, TAKING INTO ACCOUNT CAPITALIZATION , FLOATING FUNDS and OWNERSHIP OF LISTED COMPANIES. The Statute may also provide that with regard to the lists for directors to be elected, what is NOT TO BE TAKEN INTO ACCOUNT are the lists which have NOT REACHED A PERCENTAGE OF VOTES AT LEAST EQUAL TO HALF OF THE ONE required by the Statute for the presentation of same
        
        :check: Note
      - LIST CANDIDATE which are the directors holding independent requisites established by law and by the Statute, the lists indicate also the management and control positions (albeit without any limit) that candidates may hold in other companies
      - At least one member shall be elected from the minority slate (being this a provision exceptionally applied only in Italy) that obtained the largest number of votes and is not linked in any way even indirectly, with the shareholders who presented or voted the list which resulted first by the number of votes. In companies organized under the one-tier system, the member elected from the minority slate must satisfy the integrity, experience and independence requirements established pursuant to Articles 148(3) and 148(4)
      - In addition, at least one of the members of the BoD, or two if the BoD is composed of more than seven members, should satisfy the independence requirements established for members of the board of auditors in Article 148(3) and, if provided for in the Articles of Association, the additional requirements established in codes of conduct drawn up by regulated stock exchange companies or by trade associations
      - The Statute also lays down that the division of directors to be elected is to be made on the basis of a criterion that ensures a balance between genders. The less-represented gender must obtain at least one third of the directors elected. This division criterion applies for three consecutive mandates
    - - Article 2389 Cod. Civ., set forth the following rules
        
        Shareholders have a ‘voice’ only (a) in the GAM’s resolution casting the
        remuneration of the nominated members of the BoD, being the BoD vested with the power to establish the remuneration of executives directors; or (b) but only if it is allowed by the Company’s By-laws, defining the maximum threshold of the remuneration to be accorded to all BoD’s members, including the executives ones
        
        The remuneration can be both fixed and variable; in cash (even in terms of dividends) or in kind (in terms of stock options);
      - Article 123-ter TUF (“REPORT ON REMUNERATION”). Companies with listed shares shall make a report on remuneration available to the public at the company registered offices and on its internet website a report on remuneration. Such Report shall be laid out in two sections and is approved by the Board of Directors
        
        The first section of the report on remuneration explains:
        
        The company's policy on the remuneration of the members of the administrative bodies, general managers and executive with strategic responsibilities with reference to at least the following year
        
        The procedures used to adopt and implement this policy
        
        The second section which is intended for the members of the administrative and auditing bodies, general managers and, in aggregate form, for executives with strategic responsibilities
        
        Provides a suitable representation of each of the items comprising remuneration, including treatment provided for in the event of cessation of office or termination of employment, highlighting the coherence with the company's policy in terms of remuneration approved the previous year.
        
        Analytically illustrates the fees paid during the financial year of reference, for any title and in any form by the company and by subsidiaries or associates, noting any components of said fees that refer to activities performed in years prior to that of reference, in addition to highlighting the fees to be paid in one or more subsequent years in exchange for the work performed in the year of reference, potentially specifying an estimated value for components that cannot objectively be quantified in the year of reference.
      - Article 114-bis TUF (“Information to be provided to the market concerning the allocation of financial instruments to corporate officers, employees and collaborators”) establishes the following:
        
        Compensation plans based on financial instruments in favor of members of the BoD or the management board, employees and collaborators not linked to the company by an employment contract and of members of the board of directors or the management board, employees and collaborators of parent companies or subsidiaries shall be approved by the ordinary shareholders’ meeting
        
        :check: NOte:
        In accordance with the terms and conditions envisaged in Article 125-ter, subsection 1, the issuer makes the report available to the public with information concerning the following:
        
        The reasons for the adoption of the plan
        
        The members of the Board of Directors, that is the management board of the company, of the controlling or controlled companies which benefit from the plan, the categories of employees or collaborators of the company and controlling companies or controlled companies which benefit from the plan
        
        The procedures and clauses for the implementation of the plan, specifying whether its implementation is subject to the satisfaction of conditions and, in particular, to the achievement of specific results
        
        Whether the plan enjoys any support from the special fund for encouraging worker participation in firms referred to in Article 4
        
        The procedures for determining either the prices or the criteria for determining the prices for the subscription or purchase of shares
        
        The restrictions on the availability of the shares or options allocated, with special reference to the time limits within which the subsequent transfer of shares to the company or third parties is permitted or prohibited
- - - - DIVISION IN EXECUTIVE AND NON-EXECUTIVE DIRECTORS: if the articles of association or assembly permit, BOD may delegate its powers to an executive committee composed of some of its members or to one or more of its members, BOD determines the content, limits and methods of exercise of the delegation; it can give too specific instructions to the relevant bodies and call back for its own operations included in the delegation
      - The appointed/delegated bodies/members shall ensure that the organizational, administrative and accounting structure of the company is appropriate to the nature and size of the company and report to the BOD and the Statutory Auditors, at the intervals specified in its rules and in any case, at least every six months on general performance of the business and its outlook, , as well as the most significant transactions, because of their size or nature, carried out by the Company and its subsidiaries
      - 3. BOD acts as a ‘Supervisory board’: On the basis of the information received, BOD evaluates the adequacy of the organizational, administrative and accounting structure of the Company, when processed, it examines the strategic, industrial and financial plans of the Company, ; it shall survey, on the basis of the report of the executive bodies, the general performance of the company
      - 4. Duty of information: The directors are required to act in an informed manner, each director may ask the delegates to the board are provided information on the management of the company
      - Specific role of the BOD’s Chairman: unless otherwise specified in the statute, the Chairman shall convene the BOD, set the agenda, coordinate the work and ensure that adequate information on the agenda shall be provided to all directors
    - - The Director must inform the other directors and the Board of Advisors of any interest that he has, on her or a third party behalf, in a transaction involving the Company, specifying nature, terms, origin and scope of such an interest;if such
        Director is also the Company’s CEO, he must refrain from executing the transaction, being the BoD invested with the power to decide; whether it is the sole director, he must also give notice thereof to the next shareholders' meeting.
      - The Director is liable for damages caused to the Company by his act or omission
      - The Director is liable towards the Company for damages derived from the utilization, for the benefit of third parties of data, news or business opportunities acquired by means of his office
    - - Directors must fulfill the duties imposed on them by law and by articles of association with the diligence required by the nature of the assignment and their specific skills:
      - Directors are jointly and severally liable to the Company for damages resulting from failure of such duties, unless it is a matter of attributions of the Executive Committee or functions specifically allocated to one or more directors.
      - In any case, the directors, subject to the provisions of the third paragraph of Article 2381, are jointly and severally liable if, being aware of prejudicial, they did not perform what they could to prevent the perpetration or eliminating or reducing its harmful consequences
      - The liability for the acts or omissions of the directors does not extend to that between them, being free from fault, did note without delay his dissent in the book of meetings and resolutions of the board giving immediate notice in writing to the Chairman of the Board of Auditors.
    - - Liability towards Company’s creditors for damages deriving from the breach of the obligations inherent in the preservation of the integrity of corporate assets, The suite may be directly filed by creditors when the company’s assets are insufficient to satisfy their claims
      - Individual shareholder and/or any third party who were directly harmed by negligence or malicious acts of the directors shall have the right to file a legal suite against directors claiming compensation for damages.
- - - - CONFLICTS amongst SHAREHOLDERS
      - CONFLICTS between MANAGERS and SHAREHOLDERS
      - CONFLICTS between COMPANY and STAKEHOLDERS
  - - - 1. PLACE OF RAISING CAPITAL, where the SUBSCRIPTION and the EXCHANGE OF FINANCIAL INSTRUMENTS TAKE PLACE
        
        EFFICIENCY, LIQUIDITY , TRANSPARENCY of both markets are equally fundamental for granting appropriate protection to investors as well as for addressing and fostering good corporate governance BY MEANS OF GRANTING THE EFFICACY of the so-called «Wall Street Rule»
    - - PLACE OF EXCHANGE OWNERSHIP RIGHTS (the right to receive the firm’s net earnings and – what is more important – the right to control the firm)
        
        EFFICIENCY, LIQUIDITY , TRANSPARENCY of both markets are equally fundamental for granting appropriate protection to investors as well as for addressing and fostering good corporate governance BY MEANS OF the ensuring the EFFECTIVENESS of the «Takeover threat»
    - - EFFICIENCY, LIQUIDITY, TRANSPARENCY of both markets are equally fundamental for granting appropriate protection to investors as well as for addressing and fostering good corporate governance
    - - MARKET RULES : Aimed to IMPROVE and grant EFFICIENCY and ACCOUNTABILITY by:
        
        DEFINING the rules and statute of the two market (opening, access, stock selection, negotiation, monitoring)
        
        GRANTING COMPLETE, TIMELY &BROAR DISCLOSURE & INFORMATION DISSEMINATION on the markets
        
        ESTABLISHING and EMPOWERING SUPERVISORY AUTHORITIES and AGENCIES
        
        SECURING EQUAL TREATMENT RIGHTS
      - CORPORATE RULES: Aimed to SHARP organizational and functional PLC, SPECIALLY TAILORED on the PRESENCE, CHARACTERISTICS and NECESSITIES of SHAREHOLDER-INVESTORS, effectively suitable in order to grant a good corporate governance by PREVENTING CORPORATE OPPORTUNISM and CONFLICTS OF INTERESTS
        
        Emphasis on TRANSPERANCY of: OWNERSHIP and CORPORATE RIGHT ALLOCATION, INTERNAL DECISION-MAKING PROCESS, OPERATING and MANAGING results, BALANCE SHEET, CAPITAL & FINANCE of the company.
        
        Emphasis on COMPANY: MONITORING and SUPERVISORY instance through
        
        More INVOLVEMENT of SHAREHOLDER in COMPANY'S DECISION
        
        More ACCURATE ALLOCATION of DUTIES and LIABILITIES within company’s organs and boards members
        
        CONTINUOUS and DETAILED INFORMATION FLOW inside and/or between company’s ORGAN and BOARD
- - - - The PLACE OF INCORPORATION rule permits a BUSINESS CORPORATION to be INCORPORATED UNDER – and hence GOVERNED BY – the LAW OF INDIVIDUAL STATE, REGARDLESS of WHERE FIRM’s PRINCIPAL PLACE OF BUSINESS, other ASSETS or ACTIVITIES are located.
    - - However, companies are REQUIRED to INCORPORATED UNDER THE LAW OF STATE WHERE the firm has its PRINCIPAL PLACE OF BUSINESS, According to this , a corporation is subject to the laws of the state with which it has the strongest physical connections (real seat)
        :CHECK: NOTE:
        PRINCIPAL PLACE OF BUSINESS: is the PRIMARY LOCATION where ITS BUSINESS IS PERFORMED . This is generally where the business's books and records are kept and is often where the head of the firm – or, at least, upper management – is located.
    - - Limitations are applied on a non discriminatory basis
      - Limitations come into effect in presence of public and general interests
      - Limitations are appropriate and proportionate to the
        aim pursued
      - Limitations must not go beyond what is necessary to obtain such objective