The governance system

Reno De Medici has also identified the reference framework for the definition of its
governance system in the Self-Regulatory Code promoted by Borsa Italiana S.p.A.

The entities of the system

Shareholders’ meeting

The Assembly is ordinary and extraordinary. Powers and issues deliberated upon by the ordinary and extraordinary shareholders’ meeting are those envisaged and regulated by law. The quora required for shareholders’ meetings and resolutions is enforced with respect to the deliberations of the assembly during first call and in subsequent convocations.

The Shareholders’ Meeting is convened by means of a notice to be published, in accordance with the law, on the Company’s website and, also by extract, in one of the following newspapers: Il Sole 24 Ore, MF – Milano Finanza, Finanza & Mercati.

The convocation notice contains the information required by the current legislation and may also indicate the date of the potential second call and, in the case of the extraordinary Shareholders’ Meetings, third call.

The identification and verification to participation and intervention in the meeting is corroborated by the communication to the Company, made by the intermediary on the basis of the results pertinent to the end of the accounting day of the seventh open market day preceding the date set for the meeting (“record date“), and any changes subsequent to this deadline are deemed to be irrelevant for the purposes of identifying and verifying the right to vote. The communication must be received by the Company by the end of the third open market day preceding the date set for the shareholders’ meeting or after the deadlines indicated provided that the meeting is in progress.

Board of statutory auditors

Ascertains the legality. In particular, it:

• verifies compliance with the law and the Deed of Incorporation;
• verifies compliance with the principles of correct administration, in particular the adequacy of the organisational, administrative and accounting structure and its concrete functioning;
• proposes the appointment of the audit firm.

It comprises the chairman, two statutory auditors and two alternate auditors.

Board of Directors

• Holds the powers and management responsibilities;
• defines the general strategic objectives and guidelines;
• on the basis of the information received from the Chief Executive Officer, the Board of Directors assesses the adequacy of the organisational, administrative and accounting structure, the general trend and the foreseeable management outlook;
• reviews the industrial and financial strategic plans.

Comprises an executive director and six non-executive directors, three of whom are independent.

Audit firm

It audits and examines the financial statements, the consolidated financial statements and the condensed half-year financial statements, and it reviews the sustainability report.

President

The Chairman of the Board of Directors, who does not hold management powers, convenes and coordinates the meetings and activities of the Board of Directors.

Chief Executive Officer

Holds the management executive powers.

Remuneration Committee

Can make proactive proposals to the board of directors regarding:

• remuneration of executive directors or directors entrusted with special tasks;
• definition of the reference principles of the remuneration policy of directors and managers with strategic responsibilities;
• stock grant plan management.

Comprises three non-executive and independent directors.

Control and risk committee

Holds an advisory and proactive role in terms of guidelines and verification of the adequacy of the internal control system;

It coordinates with the Board of Statutory Auditors, the person in charge of internal control, the executive director and the manager in charge.

In particular:

• it evaluates internal audit plans and external audit;
• it assesses the correct application of accounting standards together with the manager in charge and the auditors.

It reports periodically to the Board of Directors.

It carries out additional specific tasks delegated by the Board of Directors.

Comprises three non-executive and independent directors.

Appointments Committee

Holds an advisory role regarding the size and composition of the board of directors in terms of diversity and professional skills.

Related committee entities

Issues opinions on minor and major transactions with related parties.

Comprises three non-executive and independent directors.

Director in charge of the internal control and risk management system

• In charge of supervising the functionality of the internal control system;
• Proposes to the Board, after consulting the Control and Risks Committee, the appointments of the persons in charge of internal control;
• Identifies business risks;
• Implements the guidelines defined by the BoD on internal control.

Manager responsible for the preparation of corporate accounting documents (CFO appointed by the Board of Directors subject to the opinion of the Board of Statutory Auditors)

• Prepares adequate administrative and accounting procedures for the preparation of the annual and consolidated financial statements and the abbreviated half-yearly financial statements.
• Release the attestations under art. 154 bis of the Consolidated Law on Finance.

Internal audit manager

In charge of:

• setting up and managing internal audit activities;
• verifying the adequacy and operation of the internal control system;
• setting up the control and internal audit activities of the company and its subsidiaries;
• verifying the compliance of the company’s business with the regulations in force and with the company procedures in relation to the prevention of business risks and fraud concerning the company.
• Supervisory and control body (Collegial body nominated by the Board of Directors)

It verifies the correct application of the Organisation, Management and Control Model adopted in compliance with the requirements of Legislative Decree 231/2001.

It proposes updates of the Organizational Model to the Board of Directors.

The supervision and control body is comprised of two independent members and of an external consultant with the suitable competence and professional requirements, with specific reference to the matters relating to the application of the Organizational Model.