These procedures set out the principles and rules that Saipem and its subsidiaries must comply with in order to ensure transparency and substantial and procedural fairness of Transactions entered into by Saipem and/or its subsidiaries with Related Parties. These procedures are issued in compliance with the provisions of the Corporate Governance Code of Listed Companies published by Borsa Italiana S.p.A. (the Italian Stock Exchange). On March 13, 2012 and June 27, 2016, the Board of Directors, having received the unanimous favourable opinion of the Audit and Risk Committee, issued updated versions of the procedure taking into account the ensuing operational requirements and the change in Saipem shareholding structure and entities controlling the Company.
In order to implement Article 2391-bis of the Italian Civil Code, Consob approved a Regulation on March 12, 2010 which obliged listed companies to adopt procedures not later than December 1, 2010 aimed at guaranteeing full transparency as well as procedural and effective fairness for transactions with related parties.
Also in light of the recommendations of the Corporate Governance Code issued by Borsa Italiana SpA, on November 24, 2010, Saipem’s Board of Directors unanimously approved the procedure ‘Interests held by Board Directors and Statutory Auditors and transactions with related parties’, effective from January 1, 2011, in substitution of the procedures previously adopted by the Board of Directors in 2003.
The Audit and Risk Committee, comprised wholly of independent Directors pursuant to the Corporate Governance Code and the aforementioned Regulation, have expressed a preliminary opinion in favour of the adoption of this procedure.
This largely reflects the definitions and provisions of Consob Regulation: transactions with related parties have been divided into transactions of greater importance, transactions of lesser importance, and exempted transactions, with different procedures to be followed based on the type and relevance of transactions.
Specifically, the Board of Directors reserves the right to approve transactions of greater importance, subject to the Audit and Risk Committee being in favour, having been involved in negotiations and having received complete and timely information. The Audit and Risk Committee expresses a reasoned, albeit not binding opinion on the interest the Company may have in a transaction and the expedience and substantial fairness of its terms.
The Board of Directors, having consulted the Audit and Risk Committee, has also identified Transactions of smaller amounts, which are excluded from the procedure, as well as other types of transactions, which, due to the nature of the revenue and/or cost, are deemed to be Regular Transactions as they were completed in market-equivalent or standard terms and therefore are excluded from the procedure even if they are not of lesser amounts.
This procedure attributes a major role to independent Directors, as members of the Audit and Risk Committee and the Compensation and Nomination Committee, in matters of remuneration. Also in terms of the duty of information to the public, Saipem’s procedure reflects the provisions of Consob Regulation in full.
A specific discipline was added for those transactions in which a Director of Statutory Auditor hold a vested interest, on their own or third party’s behalf; specifically, it details the checks and evaluations required in the preparatory and approval stages, as well as the reasons for the transactions involving a vested interest by a Director or a Statutory Auditor, notwithstanding the requirement of a reasoned opinion issued by the Audit and Risk Committee, when a transaction requires approval by the Board of Directors.
The new procedure defines timeframes, responsibilities and verification tools by the interested resources, in addition to the flows of information required for the correct application of the procedure.
Board Directors, Statutory Auditors and senior managers with strategic responsibilities declare every six months all transactions they may have entered into involving Saipem SpA and/or its subsidiaries, either directly or through a third party. They also declare potential significant relations for the purposes of the identification of related parties (for instance, close relatives).
Board Directors and Statutory Auditors declare, every six months or sooner in the event of changes, any potential interests they may hold towards the Company and the Group.
Amounts of transactions of a commercial, financial or other nature with related parties, a description of the most relevant types of transaction, their incidence on the balance sheet, income statement and financial flows are detailed in the consolidated and statutory financial statements of Saipem SpA.