The Board of Directors was appointed by the Ordinary Shareholders’ Meeting on May 4, 2017 and consists of nine members. Patrizia Grieco, Francesco Starace, Alfredo Antoniozzi, Alberto Bianchi, Paola Girdinio and Alberto Pera were drawn from the slate submitted by the shareholder Ministry of the Economy and Finance (at that time holding 23.59% of the Company’s share capital) and voted by the majority of the share capital represented at the Meeting (about 49.98% of the voting capital), while Cesare Calari, Anna Chiara Svelto and Angelo Taraborrelli were drawn from the slate submitted by a group of 21 institutional investors (at the time in the aggregate 1.88% of the Company’s share capital) and voted by the minority of the share capital represented at the Meeting (about 49.43% of the voting capital).
During 2018, the Board of Directors met 18 times, with each meeting lasting on average 2 hours and 30 minutes and with an average director attendance rate of 98.8%. The Board was constantly involved in issues related to governance, sustainability, the Code of Ethics and Model 231. The Board of Directors set up within the Board itself the following four committees:
- Nomination and Compensation Committee: with an appropriate preliminary investigation, this committee is responsible for supporting the Board of Directors, through proper inquiry, the assessments and decisions of the board on the size and composition of the Board itself, as well as the remuneration of the executive directors and of the executives with strategic responsibilities;
- an appropriate preliminary investigation, this committee has the task of supporting, through an adequate review process, the assessments and decisions of the Board of Directors regarding the Internal Control and Risk Management System and the approval of periodic financial reports;
- Corporate Governance and Sustainability Committee: this committee assists with preliminary functions, both proposing and consultative in nature, the Board of Directors on its assessments and decisions related to the corporate governance of the Company and the Group and to sustainability issues;
- Related Parties Committee: this committee has been assigned the essential task of issuing reasoned opinions on the interest of Enel – as well as of the companies that Enel controls, either directly or indirectly, and that may be involved in the transactions.
With regard to succession plans for executive directors, in September 2016, the Board of Directors, upon proposal of the Nomination and Compensation Committee, together with the Corporate Governance and Sustainability Committee, shared the contents of a specific “contingency plan” aimed at regulating the steps to be taken to ensure that the Company’s activities are regularly managed in the event of early cessation of the Chief Executive Officer before the expiry of the ordinary term of office (the so-called “crisis management” case).
In order to ensure an adequate appreciation of merit and an effective managerial continuity, the Enel Group has also adopted a system for the management of development plans aimed at fostering the identification and differentiation of the profiles for successions in the managerial positions.
In January 2018, the Board of Directors, upon proposal of the Corporate Governance and Sustainability Committee and of the Nomination and Compensation Committee, in implementation of the provisions of the Italian Consolidated Financial Act, approved a Diversity Policy that describes the optimal features of the composition of the Board itself, in order for it to exercise its functions in the most effective way, taking decisions with the concrete contribution of several qualified points of view capable of examining the issues under discussion from different perspectives. In January 2018, the Board of Statutory Auditors also approved a specific Diversity Policy that describes the optimal characteristics of the Board itself.
At the end of 2018 financial year and during the first two months of 2019, the Board of Directors carried out, with the assistance of a specialized consultancy firm in this area, an evaluation of the size, composition, and functioning of the board itself and its committees (board review), in compliance with the most advanced corporate governance practices followed abroad that have been adopted under the Corporate Governance Code. As part of this board review, specific aspects were analyzed concerning the Board’s handling and management of sustainability.
The board review was carried out according to the “peer-to-peer review” method, i.e. by assessing not only the functioning of the body as a whole, but also the style and content of the contribution provided by each director.
The Board of Statutory Auditors also carried out – at the end of 2018 and during the first two months of 2019 – a self-assessment of the size, composition and functioning of the Board itself.
This best practice was adopted for the first time, even in the absence of a specific recommendation in the Corporate Governance Code, and following the “peer-to-peer review” procedure.
The Company also organized a specific induction program to give directors adequate knowledge of the Group’s business activities, its dynamics and evolution, market trends and the legal framework; Statutory Auditors also took part in this program. Initiatives in 2018 concerned, among others, analysis of the 2018-2020 Sustainability Plan, strategies adopted in the Enel Group targeting innovation, and the organization and activities of the Enel X Global Business Line, which is active in developing low-carbon services and products. Further details on the corporate governance system are included in the Corporate Governance and Ownership Structure for 2018, available on the Company’s website (www.enel.com).
In view of the end of its term of office, the outgoing Board of Directors has given shareholders guidance on the managerial and professional profiles, whose presence in the new Board of Directors is deemed appropriate, in compliance with the recommendations of the Corporate Governance Code. The guidelines, published in 2017 (the year when the current Board was appointed), requires, among others, the Chairman to have a proper background on corporate governance, having shown a remarkable sensitivity on governance and sustainability in previous positions. Moreover, the other seven non-executive directors should have diverse, complementary skills and experience on specific fields, such as corporate governance and/or sustainability and/or digital innovation and/or technology and research. The complete guidelines in question, updated by the outgoing Board of Directors on March 2, 2017, is available on the website www.enel.com.
Similar guidelines were recently approved for the first time by the Board of Statutory Auditors, in view of the approaching end of its term of office, eventhough no specific recommendation in this regard is given in the Corporate Governance Code. As part of these guidelines, reference was made to theboard review conducted by the Board of Statutory Auditors which stressed the importance of auditors having experience in large multinationals, as well as expertise and experience in financial reportingand/or Internal Control and Risk Management System and/or sustainability and/or digitalization. The complete guidelines, approved by the outgoing Board of Statutory Auditors on March 29, 2019, is available on the Company’s website (www.enel.com).