BOARD OF DIRECTORS
Appointment and replacement of directors
The provisions of the bylaws that govern the process of appointing the Board of Directors were aligned with the provisions of Legislative Decree No. 27/2010 (implementing the so-called Shareholders' Rights Directive) by resolution of the Board of 29 October 2010.
Pursuant to Article 13 of the Bylaws as amended, the Board of Directors (consisting of a minimum of 7 to a maximum of 21 Directors, as determined by the Shareholders' Meeting) is appointed on the basis of slates submitted to the Company's registered office at least twenty-five days before the date set for the Shareholders' Meeting at the first call, presented by persons entitled to vote holding a total of at least 0.5% of the ordinary share capital or any different proportion as required by Consob. In Resolution no. 17633 of 26 January 2011, Consob set the said share at 2.5%.
Each slate must be presented together with the candidacy acceptances, the statements confirming the absence of any cause of ineligibility and incompatibility and the fulfilment of the established requirements, together with any other information required by the applicable rules and the CVs.
The Board of Directors is elected as follows:
1) four fifths of the directors to be elected are chosen from the slate that obtains the majority of the votes cast in the shareholders' meeting, in the order in which they are listed on the slate; in the event of a fractional number, the result is rounded down to the nearest whole number;
2) the remaining directors are taken from the other slates; to that end, the votes obtained by the slates are successively divided by a series of whole successive numbers from one up to the number of directors to be elected. The quotients thus obtained are assigned progressively to the candidates on each of these slates in the order specified thereon. The quotients thus assigned to the candidates on the various slates are arranged in a single decreasing ranking. Those who have obtained the highest quotients are elected. If more than one candidate obtains the same quotient, the candidate from the slate that has not yet elected any director or that has elected the smallest number of directors is elected.
If different slates have received the same number of votes and their candidates have been assigned the same quotients, a new vote is held by the entire Shareholders' Meeting and the candidate obtaining the simple majority of the votes is elected.
For the appointment of any Directors who for whatever reason have not been not appointed by the procedure described above, the Shareholders' Meeting will decide by the majority required by law.
According to the provisions of the Company's Self-regulatory Code, acting as a director of Telecom Italia Media is not considered compatible with being a director or auditor of more than five companies, other than those subject to the management and coordination of Telecom Italia Media or its subsidiaries or affiliates, which
In the case of executive directors in companies with the characteristics listed above, the limit is reduced to three. The Board of Directors may, however, make a different assessment (which would be published in the annual report on corporate governance), even if departing from the stated criteria.
At its meeting held on 23 February 2011, the Board of Directors found that the directors currently in office respect the rules on the maximum number of offices established by the Self-regulatory Code.
Composition of the Board of Directors.
The Shareholders' meeting of 8 April 2011 appointed the current Board of Directors, setting the number of its members at 13 and a term of office of three financial years (therefore until the shareholders' meeting called to approve the financial statements for the year ended 31 December 2013).
The CVs of the members of the administrative body are available on the www.telecomitaliamedia.it website.
Role of the Board of Directors
Telecom Italia Media's Self-regulatory Code establishes an active role for the Board in the strategic guidance of the Company and in the control of operations, giving this body a broad range of strategic powers and responsibilities to intervene directly in decisions having a major impact on the activities of the Company and the Group. In particular, the Board reserves the right, among others:
In accordance and in addition to these principles, the Board of Directors (without any change to the responsibilities and powers assigned to it by law, the bylaws, the proxies structure and internal procedures) has adopted and published appropriate criteria for identifying the strategic operations that are subject to prior approval by the Board (the document can be viewed in its entirety on the www.telecomitaliamedia.it website, Governance channel). These operations include:
1. any agreements, irrespective of their name, with competitors of the Telecom Italia Media Group, which, because of their subject, undertakings, conditions, resulting restrictions, may have a lasting effect or a significant impact on the freedom to make strategic business decisions, and any agreements regarding the company's business discipline or any stages thereof (e.g. partnerships, joint ventures, etc.) signed with direct competitors of the Telecom Italia Media Group;
2. deeds and transactions that involve: (i) entry into (or exit from) geographical and/or product markets; (ii) exceeding the business investments planned by the budget by more than 25% (twenty-five percent);
3. investments and disinvestments exceeding a value of Euro 100 million; transactions which, either during their performance or at their end, may involve purchase and/or sale undertakings and/or deeds of such a nature and extent;
4. deeds of purchase or sale of companies or branches of companies that are of strategic importance within the framework of the overall business activity or the value of which exceeds Euro 100 million; transactions which, either during their performance or at their end, may involve purchase and/or sale undertakings and/or deeds of such a nature and extent;
5. deeds of purchase and sale of controlling and connecting stakes with a value of over Euro 100 million, and in any case (even if they are of a lesser value) in companies performing activities included in the core business of the Group, as well as the signing of agreements on exercising rights inherent to these shareholdings; transactions which, either during their performance or at their end, may involve purchase and/or sale undertakings and/or deeds of such a nature and extent;
6. taking out loans, and issuing guarantees in the interest of non-subsidiary companies, for amounts exceeding Euro 100 million; transactions which, either during their performance or at their end, may involve purchase and/or sale undertakings and/or deeds of such a nature and extent;
7. atypical and unusual transactions as defined by Consob.
The Board of Directors of TI Media, as the parent company, is also responsible for the prior approval of any of the above transactions carried out by its subsidiaries.
The Board of Directors assesses the adequacy of the organisational, administrative and accounting structure of the Company on the basis of information provided from time to time by the management and, with specific reference to the internal control system, based on the preparatory work conducted by the Committee for internal control and corporate governance.
In exercising its duties as the corporate body in charge of the internal control system, the Board avails itself of the aforesaid Committee and
Executing the policies laid down by the Board of Directors, the Director specifically appointed to internal control (the Vice Chairman and CEO Giovanni Stella) is also responsible for defining the instruments and procedures for the shaping of the internal control system, ensuring its adaptation to changes in the operational environment and in the applicable laws and regulations.
The evaluation of business activities is based on a continuous flow of information to non-executive Directors and Auditors, coordinated by the Chairman of the Board of Directors. This happens from time to time during the various meetings and specifically, with a detailed comparison between the results achieved and the objectives of the budget, when examining financial reports.
During 2007, the Board of Directors launched a process of self-assessment of its performance, therefore complying with the requirements of the Company's Self-regulatory Code. For this process, a decision was taken in 2007 that it would be appropriate to rely on the support of an external consultant, identified as Egon Zehnder International. The work carried out in agreement with the Internal Control and Corporate Governance Committee, involved the drafting of a specific questionnaire submitted to the individual directors, followed by individual interviews with these same directors. The way in which this project was structured, aimed at allowing a self-assessment to be carried out of the structure, operation, efficiency and areas of improvement of the Board, allowed the directors' perception of the following aspects to be determined:
The conclusions of this work were then presented at the Board meeting held on 7 November 2007. For 2008, 2009 and 2010, relying on the fruitful overall experience gained during the previous session, the Committee coordinated the board self-assessment process itself by distributing an appropriate questionnaire among the directors. The aforesaid questionnaire, based on the recommendations previously made by Egon Zehnder, was intended to verify the operation and progress achieve by the Board of Directors during the course of 2010. With regard to the financial year 2010, the Board of Directors analysed the results of the meeting of 23rd February. The annual board assessment substantially confirmed the results of the previous session. An overall positive picture emerged from the self-evaluation. The Company has a high quality Board with balanced and diversified skills. The high degree of participation by members of the administrative body in company meetings, and the management of the decision-making process, in terms of information received, preparatory work undertaken by the Committees and level of debate, were appreciated in general. The conduct of meetings was deemed effective, giving each Director the opportunity to express his/her opinion, while respecting the time frame of the agenda, in an atmosphere considered constructive and positive. The minutes of the meetings are deemed complete and highly valued.
With regard to the composition of the Board, it was considered adequate, although it was suggested that thought might be given to reducing the number of members and to ensuring the presence of specific skills in the television market.
The level of knowledge of the key factors of business and the market and competitive conditions of the Company and the Group is an area of improvement that the Board considers it should work on, inter alia, by setting up a Strategic Committee and by organising ad hoc meetings. In this respect, satisfaction was expressed with the organisation of meetings with various company managers to review the technological aspects and business prospects; it was recommended that this experience be repeated.
In general, the Board thought that during the three-year period, some of the important operational procedures had improved and that some of the objectives suggested in previous self-assessment projects had been achieved.
8 meetings of the Board of Directors were held during 2010. Director participation was high, with a 90% attendance rate by the members of the Board, with a high presence of independent directors (around 85%). The average duration of the meetings was 2 hours. 4 meetings are planned for 2011.
Meetings of the Board of Directors are attended by Company executives or external individuals whenever it is felt that their presence is needed to make a specialised contribution to the matters being discussed.
In November 2010, the Company informed the market of the company's events planned for 2011, stating the dates of the board meetings planned to approved the economic and financial data and of the annual shareholders' meeting. As of February 2011, the Board of Directors had already met three times.
The assignment and revocation of powers of attorney to Directors are reserved for the Board, which defines their purpose, limits, methods of use and frequency - no more than quarterly - with which the delegated bodies must report to the Board regarding the activities carried out, the overall management performance and the most important economic, financial and equity operations carried out by the Company and its subsidiaries.
The overall system of powers of attorney granted to the executive Directors of the Company (Chairman, Vice Chairman and CEO) is structured as follows:
The Board of Directors on 8 April 2011 nominated Severino Salvemini as legal representative of the company in conformity with law and the Company Bylaws and to grant Mr. Stella all powers to represent the company and to exercise, by separate signature, all duties pertinent to company business, with no exclusions, as well as full responsibility for the governance of the company and the group.
In addition to legal representation, the following responsibilities are assigned to the Vice Chairman and CEO Giovanni Stella:
For the purposes of the limits placed on the value of transactions delegated to executive Directors, the value considered is that of a single transaction or group of transactions which, although individually below the quantitative thresholds indicated, are interconnected within one and the same strategic plan or executive project and therefore, when considered as a whole, exceed the said thresholds.
The powers are exercised in compliance with the applicable legal restrictions and of the specifications - and in particular the powers reserved for the Board of Directors - contained in the Self-regulatory Code of the Company and the Procedure for carrying out transactions with related parties.
In particular, it is important to point out that the Board of Directors is in any case vested with the power to perform operations of particular "significance", even if theoretically their performance comes within the limits of the powers delegated to the executive Directors.
On 11 January 2006, the Board of Directors reviewed the powers delegated to senior managers in accordance with the new corporate rules imposed by Legislative Decree No. 6/2003. The limits previously established were redefined as limits that are internal to the relationship between the delegating collegiate body and the delegated individuals, and the Chairman and CEO were both recognised as the legal representatives of the Company, each one authorised to perform any action connected with the various forms of the company's activity.
Other executive directors
There are no other directors in the Board of Directors of TI Media who can be defined as executive.
Telecom Italia Media S.p.A. has adopted the criteria established by the Self-regulatory Code of Borsa Italiana for defining the "independence" of Directors.
The Board of Directors, at its meeting of 8 April 2011, verified the independence requirements of the Directors, pursuant to art. 147-ter, subsection 4, of Legislative Decree No. 58/1998, noting that the requirements of the composition of the administrative body in its entirety (the presence of at least two independent Directors according to the criteria established by law for Auditors) had been respected.
The number and professional skills of the independent Directors on the Board are such as to confirm the composition of the Board committees according to the instructions contained in the Self-regulatory Code.
In light of the assessments made, the majority of the Directors (7 of the 13 directors) currently qualify as independent: Irene Bignardi, Adriano De Maio, Lorenzo Gorgoni, Davide Rampello, Sergio Ristuccia, Fabio Alberto Roversi Monaco, Severino Salvemini
Lead Independent Director
On 24 July 2006, the Board of Directors, in light, inter alia, of the instructions contained in the Self-regulatory Code, decided to established the position of Lead Independent Director. This was done in order to further highlight the role of the Independent Directors. The Lead Independent Director, identified as Chairman of the internal control and corporate governance committee, is the coordinator and point of contact for requests and contributions by the independent directors, guaranteeing that they enjoy the greatest possible independence of judgement regarding the activities of the management.
The Lead Independent Director is granted, inter alia, the power to convene meetings of the independent Directors, either independently or at the request of other Directors, for the purpose of discussing matters that are deemed to be of interest regarding the operation of the Board of Directors or management activities, with the opportunity to ask members of the management to attend these meetings in order to have direct discussions with them.
Two meetings of the Independent Directors were held during 2010.
At its meeting of 8 April 2011, the new Board of Directors therefore acknowledged and ratified the decision of the independent Directors to name the Director Adriano De Maio as Lead Independent Director.
Pursuant to the Self-regulatory Code, the Chairman of the Board of Directors is assisted by the Lead Independent Director in improving the functioning of the administrative