banca mediolanum s.p.a. report bis of the cfa … in replacement of maurizio carfagna; elena biffi...
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BANCA MEDIOLANUM S.P.A.
REPORT ON CORPORATE GOVERNANCE AND CORPORATE STRUCTURE pursuant to art. 123-bis of the CFA
FY 2015
Version approved by the Board of Directors on February 18, 2016
WWW.BANCAMEDIOLANUM.IT
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TABLE OF CONTENTS GLOSSARY ISSUER’S PROFILE 1. CORPORATE GOVERNANCE SYSTEM Introduction and information on corporate structures
Proxies issued pursuant to art. 2443 of the Civil Code
Governance Structure
pg. 2 pg. 11 pg. 12 pg. 12
pg. 16
pg. 17
2. ADHESION TO THE CORPORATE GOVERNANCE CODE
pg. 48
3. ANNUAL REPORT OF THE OFFICES OF DIRECTORS UNDER PRINCIPLE 1.C.2. OF THE CORPORATE GOVERNANCE CODE OF LISTED COMPANIES
pg. 95
ANNEXES pg. 98
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GLOSSARY
Code/Corporate Governance Code : the Corporate Governance Code of listed companies approved in the amended version in July 2015 by the Committee for Corporate Governance and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria. The Company - as will be explained in the report - will adapt to the amended provisions of the latest version of the Code within the time provided by the same. All circumstances will be outlined that - even consistent with industry regulations applicable - have led to early adoption of the different provisions. Civil Code/ :.c.c the Italian Civil Code. Board : the Issuer’s Board of Directors. Issuer: the issuer of securities to which the Report refers. Financial Year: the company financial year to which the Report refers. Consob Issuer Regulation : the Regulations issued by CONSOB with resolution no. 11971 of 1999 (and subsequent amendments) on the matter of issuers. Consob Market Regulation : the Regulations issued by CONSOB with resolution no. 16191 of 2007 (and subsequent amendments) on the matter of markets. Consob Related Parties Regulation : the Regulation issued by Consob with resolution no. 17221 of March 12, 2010 (and subsequent amendments) on the matter of transactions with related parties. Report: the corporate governance and corporate structure report that companies are required to draw up pursuant to article 123-bis of the CFA. Consolidated Finance Act/CFA: Legislative Decree February 24, 1998, no. 58.
Banca Mediolanum S.p.A. has prepared this report, which aims to illustrate the characteristics of
its corporate governance organization.
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Having adopted the Corporate Governance Code – available on the website www.borsaitalia.it
under Italian Stock Exchange/Publications – issued by the Corporate Governance Committee of
the Italian Stock Exchange, the Company has also outlined in this report the state of compliance of
the corporate governance system with the recommendations of the Code, according to the “comply
or explain” principle .
The Code was adopted during the listing of Banca Mediolanum S.p.A. following the merger by
incorporation of the parent company Mediolanum S.p.A. and the Company adopted the necessary
decisions in order to adapt the corporate governance system to the recommendations contained in
the Corporate Governance Code currently in force.
Mediolanum S.p.A. was the former parent company listed on the Electronic Stock Exchange
(MTA) organized and managed by Borsa Italian S.p.A. and index component FTSI MIB. It also
adhered to the Code as will be outlined below.
On May 25, 2015, the Boards of Directors of Mediolanum S.p.A. and Banca Mediolanum S.p.A.
approved the merger plan concerning the merger by incorporation of Mediolanum into Banca
Mediolanum pursuant to articles 2501-ter et seq. and the Civil Code to be submitted to the
respective General Meetings.
On September 29, 2015, the Extraordinary Meetings of Mediolanum S.p.A. and Banca
Mediolanum S.p.A. approved the Merger Plan.
On December 11, 2015, the merger deed was stipulated, with effect from the start date of trading
of the Issuer’s shares on the MTA (the “Effectiveness Date of the Merger”), which occurred on
December 30, 2015.
The above merger (the “Merger”) arises in the context of the rationalization of the Mediolanum
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Banking Group structure consequent to the assumption of the role of parent company of the group
by the merged company Mediolanum S.p.A. with effect from April 16, 2014.
The choice of the incorporation of Mediolanum S.p.A. into Banca Mediolanum S.p.A. was
operated since it proved more efficient and cost-effective than the incorporation of the Bank into
Mediolanum S.p.A., which, by its nature, has a very wide range of relationships with third parties
and a substantial workforce.
Incorporation by Banca Mediolanum S.p.A. therefore allowed to preserve the continuity of the
identification elements of the same, and to pursue the objective of creating an organizational
simplification and rationalization of the Mediolanum Financial Conglomerate, shortening the
investment chain and increasing the efficiency and profitability thereof.
The Merger of Mediolanum S.p.A. into Banca Mediolanum S.p.A. became effective December 30,
2015 - with accounting and tax effects relegated to the first day of the year - and at said date the
corporate bodies of Mediolanum S.p.A. ceased and the legal relationships belonging to it were
transferred to the merging company Banca Mediolanum S.p.A..
Until said date, Mediolanum S.p.A., a company listed on the MTA organized and managed by the
Italian Stock Exchange, adhered to the application principles and criteria contained in the
Corporate Governance Code.
It is recalled that the corporate purpose of Mediolanum S.p.A. was the exercise of financial assets
not with respect to the public, and was the parent company of the Mediolanum Financial
Conglomerate as per coordination arrangements between the control bodies (Bank of Italy, Consob
and IVASS) for the purposes of supplementary supervision and from July 29, 2014 - with effect
from April 16, 2014 - had also assumed the title of parent company of the Mediolanum Banking
Group.
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Mediolanum S.p.A. had some proxies for share capital increases pursuant to art. 2443 Civil Code,
for the stock option plans it promoted and contained in art. 6 of the By-laws. These proxies were
recalled - for the remainder - in the By-laws of the merging company Banca Mediolanum S.p.A. in
art. 6 of the By-laws.
The company was characterized by a traditional governance structure, composed of the General
Meeting, the Board of Directors, the Board of Statutory Auditors and the Independent Auditors,
which were entrusted with the statutory audit function.
In 2015, the Mediolanum S.p.A. Board of Directors, composed of 15 members of which 6
independent pursuant to the CFA and “Code”, met 14 times (average duration per meeting: 1 hour
52 minutes).
The Mediolanum S.p.A. Board of Directors, up to the effectiveness of the Merger and the
consequent termination of the company, was composed as follows:
Carlo Secchi – Chairman (without proxies) – (majority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since July 2012;
Alfredo Messina – Vice Chairman Vicarious – (majority list) Executive, in office since
December 1995;
Massimo Antonio Doris – Vice Chairman – (majority list) Executive, in office since
February 1996;
Ennio Doris – Chief Executive Officer – (majority list) Executive, in office since
December 1995;
Luigi Berlusconi – Director – (majority list) Non-Executive, in office since
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April 2007;
Annalisa Sara Doris – Director – Non-Executive, in office since March 26,
2015 in replacement of Maurizio Carfagna;
Elena Biffi – Director – (majority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since April 2014;
Pasquale Cannatelli – Director – (majority list) Non-Executive, in office since
April 2004;
Roberto Maviglia – Director – (minority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since April 2014;
Edoardo Lombardi – Director – (majority list) Executive (Vice Chairman
Banca Mediolanum S.p.A.), in office since
February 1996;
Mario Molteni – Director – (majority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since April 2001;
Danilo Pellegrino – Director – (majority list) Non-Executive, in office
since April 2008;
Angelo Renoldi – Director – (majority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since April 2001;
Anna Scarfone – Director – (majority list) Non-Executive, in office
since April 2014;
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Maria Alessandra Zunino de Pignier – (majority list) Independent pursuant to
Corporate Governance Code and pursuant to
art. 147-ter CFA, in office since March 2012.
It is recalled that with regard to the independent qualification of Mario Molteni and Angelo
Renoldi, the Board had reaffirmed, in view of the prevalence of substance over form, as already
previously affirmed and had therefore unanimously agreed on the fact that said qualification was
also with reference to application criterion 3.C.1. e) and that is the persistence in office for more
than nine years in the last twelve. It had thus found the presence among its members of six
independent directors pursuant to the CFA and “Code” with respect to the fifteen total appointed
by the General Meeting, which made the Board of Directors in line with the new provisions of the
Corporate Governance Code which provides for Issuers belonging to the FTSE-Mib index that at
least a third, also by default, of the Board of Directors be made up of Independent Directors.
In accordance with the Code, Mediolanum S.p.A. had set up both the “Control and Risk
Committee” (7 meetings in 2015) and the “Appointments and Remuneration Committee” (4
meetings in 2015) with the tasks provided under the Code; both carried out said tasks until
termination of the company by incorporation into Banca Mediolanum S.p.A..
Also, the Independent Directors met 2 times in 2015 to address issues usually attributed to them
for Self-evaluation of the Board of Directors and support to the Board for the drafting of the
“Report on corporate governance and corporate structure”.
Regarding the Control System, Mediolanum S.p.A. had identified the Vice Chairman Vicarious
Alfredo Messina as Director “in charge of the Internal Control and Risk Management System”
with the tasks provided for in the Code on the matter and had appointed Massimo Rotondi - on the
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proposal of the Vice Chairman Vicarious following the opinion of the members of the Control and
Risk Committee and the Board of Auditors - Internal Audit Manager, assigning the tasks required
by the Code.
Moreover, since 2005, Mediolanum S.p.A. had strengthened the control and risk management
model, by outsourcing the “Compliance & Risk Control” unit then divided into two distinct
second-level control functions: “Compliance” and “Risk Management”.
Upon completion of the Internal Control System, Mediolanum S.p.A. had also established the
Supervisory Board pursuant to Legislative Decree 231/2001, which was attributed the task of
overseeing the effectiveness, compliance and updating of the “Organization, Management and
Control Models” under art. 6 of Legislative Decree 231/2001 (Administrative Responsibility of
Entities) duly adopted by the company.
For all numerical data on participation and the frequency of meetings of the governing bodies,
please refer to the following table:
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STRUCTURE OF THE BOARD OF DIRECTORS AND COMMI TTEES OF MEDIOLANUM S.p.A.
Board of Directors
Control and
Risks Committee
Appointments and
Remuneration Committee
Any Executive
Committee
Office Members
Year of birth
Date of first
appointment* In office since
In office up to
List **
Exec. Non Exec.
Indep. Code
Indep. CFA
(*) (*) (**) (*) (**) (*) (**)
Chairman Carlo Secchi
04/02/1944
31/07/2012 29.04.2014
30/12/2015
M X X X 13/14 92.86%
Vice Chairman Vicarious
Alfredo Messina •
08/09/1935
28/12/1995 29.04.2014
30/12/2015 M X
11/14 78.57%
Vice Chairman Massimo Antonio
Doris
09/06/1967
19/02/1996 29.04.2014
30/12/2015 M
X 13/14
92.86%
Chief Executive Officer
Ennio Doris
03/07/1940
28/12/1995 29.04.2014
30/12/2015 M
X 12/14
85.71%
Director Luigi Berlusconi
27/09/1988
19/04/2007 29.04.2014
30/12/2015 M
X 2/14 14.29%
Director Elena Biffi
27/01/1966
29/04/2014
29.04.2014 30/12/2015
M X X X 14/14
100% 4/4
100% M
Director Pasquale Cannatelli
08/09/1947
27/04/2004 29.04.2014
30/12/2015 M
X 10/14 71.43%
Director Annalisa Sara Doris
07/05/1970
26/03/2015
26.03.2015 30/12/2015
N.A. X 9/10
90.00%
Director Edoardo Lombardi
19/02/1936
19/02/1996
29.04.2014 30/12/2015
M X 11/14
78.57%
Director
Roberto Maviglia
17/06/1960
29/04/2014
9.04.2014
30/12/2015
m X X X 14/14
100%
Director Mario Molteni
18/09/1958
12/04/2001 29.04.2014
30/12/2015 M
X X X 10/14 71.43%
7/7 100%
M 4/4 100%
M
Director Danilo Pellegrino
18/09/1957
22/04/2008
29.04.2014
30/12/2015
M X 8/14 57.14%
Director Angelo Renoldi
07/08/1949
12/04/2001 29.04.2014
30/12/2015 M
X X X 10/14 71.43%
7/7 100%
P 4/4 100%
P
Director Anna Scarfone
10/07/1974
29/04/2014 29.04.2014
30/12/2015 M
X 13/14 92.86%
7/7 100%
M
Director Maria Alessandra Zunino de Pignier
01/05/1952
01/03/2012
29.04.2014 30/12/2015
M X X X 13/14
92.86%
No. of meetings held during the financial year of reference: BOD: 14 CCR: 7 CNR: 4 Indicate the quorum required for the submission of lists by minority shareholders for the election of one or more members (pursuant to article 147-ter CFA): 1% Consob Resolution no. 18775 of 29/1/2014
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NOTES The symbols listed below shall be indicated in the “Office” column: • This symbol indicates the Director in charge of the internal audit and risk management system. This symbol indicates the main party responsible for the management of the issuer (Chief Executive Officer or CEO). ° This symbol indicates the Lead Independent Director (LID). * Date of first appointment of each director refers to the date on which the director was appointed for the first time (ever) in the Board of Directors of the issuer. ** This column indicates the list from which each director was taken (“M”: majority list; “m” minority list; “BoD”: list submitted by the BoD). *** This column indicates the number of offices of director or statutory auditor held by the party concerned in other companies listed on regulated markets, including foreign markets, in financial, banking, insurance or large companies. In the Report on corporate governance, the offices are indicated in full. (*). This column indicates the attendance of directors at meetings of the Board and Committees (indicate the number of meetings attended compared to total number of meetings that could be attended, ex. 6/8, 8/8 etc.). (**). This column shows the qualification of director within the Committee: “P”: chairperson; “M”: member. (1) Only one list of candidates was filed for the appointment of the Board of Directors.
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ISSUER’S PROFILE
The purpose of Banca Mediolanum S.p.A. is the collection of savings and the provision of credit
in its various forms. It may carry out, in compliance with applicable regulations, all banking and
financial transactions and services, including the exercise of stock brokerage activities, as well as
any other instrumental operation and in any case related to the achievement of the corporate
purpose.
Banca Mediolanum is organized according to the “traditional” administration and control model
under articles 2380-bis et seq. of the Civil Code, with the General Meeting, the Board of
Directors with administrative functions and a Board of Auditors with administration control
functions.
This model, based on the in-depth assessment, has been considered the most suitable to ensure
efficient management and effective controls, keeping in mind also the costs linked to the adoption
and operation of the system chosen.
The Company, following the reverse merger and the consequent listing resumed, as from
December 30, 2015 - the effective date of the merger - the title of parent company of the
Mediolanum Banking Group registered in the Register of Banking Groups, already covered until
2014, assuming at the same time also the title of parent company of the Mediolanum Financial
Conglomerate mainly in banking activities.
The Issuer, in its capacity as Parent Company of the Mediolanum Banking Group, pursuant to
article 61, paragraph 4, of Legislative Decree September 1, 1993 no. 385, issues, in exercising its
management and coordination provisions to other members of the Group to comply with the
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instructions given by the Bank of Italy in the interest of the stability of the Group.
1. CORPORATE GOVERNANCE SYSTEM
Introduction and information on corporate structures (pursuant to article 123-bis,
paragraph 1 of the CFA)
The fully subscribed and paid-up share capital of the company as at December 31, 2015 was Euro
600,000,000.00, divided into 738,401,857 ordinary shares without par value. There are no shares
of a class other than the one mentioned.
Following the incorporation of the parent company for every 1 (one) ordinary share of
Mediolanum S.p.A. (with a nominal value of Euro 0.10), 1 (one) ordinary share of Banca
Mediolanum S.p.A. was assigned in exchange with no indication of the par value.
Considering that, as a result of the merger, Banca Mediolanum S.p.A. took over the current
shareholding of Mediolanum S.p.A., below is the situation regarding the shareholders, directly or
indirectly, of more than 2% of the subscribed share capital of Banca Mediolanum S.p.A.,
represented by shares with voting rights, according to the results of the shareholders’ register,
with communications received and other information available:
(data as at February 18, 2016) NO. SHARES %
SILVIO BERLUSCONI INDIRECT. THROUGH:
- FININVEST S.p.A. (OWNERSHIP)
221,828,000 30.04
ENNIO DORIS
- DIRECTLY IN OWNERSHIP 23,563,070 3.19
- INDIRECTLY THROUGH:
FIN.PROG.ITALIA S.A.P.A. di E. Doris & C. 195,289,557 26.45
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TOTAL 218,852,627 29.64
LINA TOMBOLATO
- DIRECTLY IN OWNERSHIP
- INDIRECTLY THROUGH:
T-INVEST S.r.l.
24,307,595
25,394,701
3.29
3.44
TOTAL 49,702,296 6.73
T. ROWE PRICE ASSOCIATES INC. 22,410,496 3.03
Between the company Fin. Proj. Italia S.a.p.a. di Ennio Doris & C. and Fininvest Finanziaria
d’Investimento S.p.A., a block and voting shareholders’ agreement was stipulated concerning at
least 51% of Mediolanum S.p.A. shares (incorporated by Banca Mediolanum S.p.A. with effect
from December 30, 2015), conferred by the signatories equally. The Shareholders’ Agreement
was recently renewed - for three years - on September 14, 2013.
Following the loss of the requirements of integrity of Silvio Berlusconi, by provision of October
7, 2014, the Bank of Italy, in agreement with IVASS, ordered the measures provided for in
articles 24 and 25 of the Consolidated Banking Act, including the suspension of voting rights for
the shareholding held by Fininvest S.p.A. in excess of 9.9% of Mediolanum’s capital and the
divestment of this portion. The provision states that the portion exceeding 9.9% must be
conferred in a trust to be set up within three months of communication of the provision (i.e., by
January 9, 2015) and that the trustee shall in turn transfer it within thirty months of the
establishment of the trust.
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As a result of this measure, with a press release dated October 10, 2014, Fininvest S.p.A.
(hereinafter “Fininvest”) acknowledged the absence of effectiveness of the Mediolanum
Shareholders’ Agreement (the “Agreement”) signed on September 14, 2013 with Fin. Proj. Italia
S.a.p.a. di Ennio Doris & C. (hereinafter “Fin.prog.”).
With subsequent press release on October 29, 2014, Fininvest informed to have appointed its
CEO to agree with Fin.prog. the formalization of the early and consensual termination of the
Agreement.
During the General Meeting of Mediolanum S.p.A. on September 29, 2015, it was noted that this
was currently non-productive of effects. The Issuer is not aware of the formalization of the
termination of the Agreement.
The provision of the Supervisory Authority was the subject of appeal to the TAR (Regional
Administrative Court) of Lazio by Silvio Berlusconi. The appeal was rejected by the
Administrative Court with sentence filed on June 5, 2015. Said rejection sentence was appealed
to the State Council on July 8, 2015. On August 27, 2015, the Council set January 14, 2016 to
discuss the appeal on the merits.
On January 8, 2015, the trust was set up and Sirefid S.p.A. was selected as trustee, a company
wholly owned by Intesa Sanpaolo S.p.A. On April 23, 2015, the Bank of Italy, in agreement with
IVASS, authorized the trustee to purchase the shareholding of Fininvest Mediolanum exceeding
9.9%. By letter dated November 6, 2015, the Bank of Italy ordered Fininvest to transfer this
investment to the trustee by December 6, 2015.
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Because of this measure, with a request to the State Council on November 18, 2015, Silvio
Berlusconi requested precautionary suspension of the measure of the Bank of Italy, in agreement
with IVASS, on October 7, 2014, pending the final decision on the legality of the same.
By order of December 4, 2015, the State Council suspended the decision of November 6, 2015 by
means of which the Bank of Italy ordered Fininvest to transfer the shareholding in Mediolanum
exceeding 9.9% by December 6, 2015. No transfer took place, to the knowledge of Banca
Mediolanum.
It is also noted that by deed dated July 23, 2015, the Bank of Italy ruled that the obligation to
dispose of the shareholding of Fininvest in Mediolanum exceeding 9.9% must be considered as
referring, once the Merger has been implemented, to the corresponding shareholding of Fininvest
in the Issuer. This decision was challenged by Silvio Berlusconi on November 18, 2015 with an
extraordinary appeal to the President of the Republic.
The outcome of the proceedings concerning the decision of the Bank of Italy, in agreement with
IVASS of October 7, 2014 and that of the Bank of Italy of July 23, 2015 could have effects on
the Issuer’s corporate structure after the merger. If the measure of the Bank of Italy, in agreement
with IVASS, was recognized as official by the judicial authorities, the suspension would be
confirmed of the voting rights linked to the shareholding in Banca Mediolanum held by Fininvest
exceeding 9.9% and the obligation to transfer it to third parties. It is not possible to predict
whether the transfer will be executed if at the date of the ruling of the State Council the last
proceedings are still pending - as it is reasonable to believe - as brought by Silvio Berlusconi
before the President of the Republic for the annulment of the decision dated 23 July 2015, with
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which the Bank of Italy announced that, following the Merger, the divestiture obligation of
Fininvest will concern the shareholding in Banca Mediolanum exceeding 9.9%.
If, however, the Council of State annulled the decision of the Bank of Italy, in agreement with
IVASS of October 7, 2014, Fininvest would resume full availability of their rights related to its
entire shareholding in the Issuer and, taking into account the content of Agreement, according to
the Issuer, it is reasonable to assume that the same shall resume effectiveness and therefore
involve the shares of the Issuer after the Merger.
Proxies issued pursuant to art. 2443 of the Civil Code and authorization to purchase
treasury shares
As regards the proxies for share capital increases pursuant to art. 2443 of the Civil Code, please
refer to art. 6 of the By-laws that Banca Mediolanum S.p.A. assumed as a result of the Merger
and available on the website of the Italian Stock Exchange and on the website
www.bancamediolanum.it in the Corporate Governance section under Company corporate
governance documents. Such proxies derive from the previous stock option plans promoted by
the merged company Mediolanum S.p.A.
General Meeting authorizations to purchase and sell treasury shares were not issued for the year
2015.
The forthcoming General Meeting will be called, inter alia, to resolve on the authorization for the
purchase and disposal of treasury shares in accordance with the combined provisions of articles
2357 and 2357-ter of the Civil Code, and article 132 of Legislative Decree no. 58/1998 Such
authorization - strictly related to the new performance share plans to be proposed to the General
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Meeting of April 5 - was subject to proper request to the Bank of Italy in accordance with
Circular 285 of December 17, 2013 and articles 77 and 78 of EU Regulation 575/2013 (so-called
CRR).
Governance Structure
It is assumed first that the Issuer and its subsidiaries have not stipulated nor are part of significant
agreements that take effect, are modified or terminate following change of control of the
company.
Like the merged company Mediolanum S.p.A., Banca Mediolanum S.p.A. is also characterized
by a traditional governance structure, composed of the General Meeting, the Board of Directors,
the Board of Statutory Auditors and the Independent Auditors, which is entrusted with the
statutory audit function.
For the composition of the corporate bodies as at December 31, 2015, reference is made to the
following points.
The independent auditors Deloitte & Touche S.p.A. - the appointment of which was conferred by
the General Meeting on April 20, 2011 and subsequently integrated by the same on September
29, 2015 as a result of the reverse merger and the resulting listing - is currently conducting the
task for the statutory audit of accounts in accordance with law, including the audit of the annual
and consolidated financial statements, as well as the limited audit of the interim financial report.
The expiration of the current appointment is expected with the approval of the financial
statements for the year ending December 31, 2019.
Governance Statutory Provisions
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Banca Mediolanum has adapted its corporate governance system to the law applicable to
companies with ordinary shares admitted to trading on a regulated market.
The current By-laws of the Issuer Banca Mediolanum S.p.A. - entered into force from the
effective date of the Merger by incorporation of Mediolanum S.p.A. (effective December 30,
2015) - in fact incorporate the provisions of the Consolidated Finance Act and banking
regulations, as well as the principles contained in the Corporate Governance Code for listed
companies.
The new text of the By-laws, annexed to the reverse merger project was approved by the General
Meeting on September 29, 2015 and subsequently integrated by the Board of Directors on
November 23, 2015 and authorized, most recently, by the Bank of Italy with provision of
December 16, 2015.
In particular, the main provisions of the By-laws in order to adapt the governance of the Bank
with the status of a listed issuer were adopted to (i) implement the provisions of Legislative
Decree no. 27/2010 implementing Directive 2007/36/EC and laying down the discipline for the
exercise of certain rights of shareholders of listed companies as well as the corrective decree of
Legislative Decree no. 91/2012; (ii) provide, in compliance with the provisions of art. 147-ter of
the CFA, the so-called “list vote” mechanism for the appointment of the members of the Board of
Directors; (iii) provide, in compliance with the provisions of art. 148 of the CFA, the so-called
“list vote” mechanism for the appointment of members of the Board of Auditors; (iv) provide for
the apportionment of the Board of Directors and Board of Statutory Auditors to be elected to be
carried out according to a criterion that ensures gender balance, in accordance with the
requirements of articles 147-ter, paragraph 1-ter, and 148, paragraph 1-bis of the CFA; (v)
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provide, in compliance with the provisions of art. 154-bis of the CFA, the appointment of a
Manager responsible for corporate financial reporting and the fulfillment of the tasks required by
art. 154-bis of the CFA.
- General Meeting
The General Meeting is regulated in its operation and as regards the rights of shareholders and
the manner of their exercise by law - primary and secondary - as outlined in the By-laws in
articles 9) to 16).
It is noted in particular - with regard to articles 9) to 16) - that:
- pursuant to article 9):
“1. The General Meeting shall be held at the registered office or elsewhere, as long as in
Italy.
2. The General Meeting is convened by a notice published on the website of the Company
under the terms of the primary and secondary legislation in force pro tempore.
The convocation notice must indicate the date, time and place of the meeting and the list of
matters to be discussed and other information required by the provisions of primary and
secondary legislation in force pro tempore.
3. If provided in the convocation notice, the exercise of the right to attend and vote may take
place electronically, in the manner provided by the regulations of primary and secondary
legislation in force pro tempore.
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4. The foregoing is without prejudice to the right of shareholders to request, pursuant to the
law, the convocation and/or additions to the agenda of the General Meeting and to submit
resolution proposals.”
- pursuant to art. 11):
“The right to attend the General Meeting and exercise the right to vote is certified by
communication to the Company by the intermediary, on the basis of their accounting records at
the end of the accounting day of the seventh trading day preceding the date set for the General
Meeting on first or second call. All crediting or debiting of the accounts subsequent to said date,
have no relevance for the right to exercise the right to vote at the General Meeting.
The communication must reach the Company by the end of the third business trading day
preceding the date fixed for the General Meeting on first or single call or by another deadline
required by regulatory provisions from time to time in force.
The foregoing is without prejudice to the entitlement to intervene at the General Meeting and
exercise the right to vote if the communication reached the Company after the deadlines
indicated in this article, as long as by the beginning of the meeting.”
- pursuant to art. 12):
“1. Those entitled to attend the General Meeting may be represented by written proxy, in
accordance with law.
The proxy may also be conferred with electronic document signed electronically in accordance
with article 135-novies, paragraph 6, of Legislative Decree no. 58/1998 and related
implementing provisions.
21
Electronic notification of the proxy may be carried out as specified in the convocation notice, by
using the appropriate section of the Company’s website or by sending the document to the
certified e-mail of the Company.
2. The Board of Directors may designate for each General Meeting, with mention in the
related convocation notice, a subject to which shareholders may confer, in the manner provided
by law and regulatory provisions, by the end of the second business trading day prior to the date
fixed for the General Meeting, also in call subsequent to the first, a proxy with voting instructions
on all or some of the proposals on the agenda. The proxy shall be valid only for the proposals in
relation to which voting instructions were conferred.
3. Shareholders may ask questions on the agenda even before the Meeting. Details on the
exercise of this right are contained in the convocation notice also with reference to the
Company’s website.
The Ordinary General Meeting is responsible for the competences required by applicable law.
Lastly, it is recalled that the Company - as further outlined below (Par. “Relations with
Shareholders” page. 87) - adopted by resolution of November 23, 2015 a “General Meeting
Regulation”, which became effective from the start of trading of Banca Mediolanum shares on
the MTA organized and managed by the Italian Stock Exchange and available on the website
www.bancamediolanum.it in the Corporate Governance section under Company corporate
governance documents.
In 2015, the Company held 6 General Meetings that had become necessary both for adjustments
to new industry regulations on remuneration and closely related to the Merger and more
precisely:
22
- on January 29, 2015 (the Bank’s remuneration policies - integrations),
- on March 19, 2015 (approval of the financial statements as at December 31, 2014,
renewal of the corporate bodies, and in extraordinary session, amendments to the By-
laws),
- on May 20, 2015 (Approval of the remuneration policies reached by the previous parent
company),
- on September 23, 2015 (determination of the remuneration to be granted in case of early
termination of the employment contract or early termination of office),
- on September 29, 2015 (Extraordinary Part: 1. Approval of the merger of Mediolanum
S.p.A. into Banca Mediolanum S.p.A. and the consequent adoption of a new By-laws of
Banca Mediolanum after the merger, and the splitting of the shares and capital increases
based on the merger; 2. Approval of the project for admission to listing on the Electronic
Stock Exchange organized and managed by Borsa Italiana S.p.A. (Italian Stock
Exchange), of the ordinary shares of the company resulting from the merger of
Mediolanum S.p.A. into Banca Mediolanum S.p.A. Ordinary Part: integration of the
appointment for the statutory audit),
- on November 23, 2015 (approval of the General Meeting Regulation).
- The Board of Directors
The current Board of Directors of Banca Mediolanum S.p.A. was appointed by the General
Meeting on March 19, 2015 on the basis of the statutory provisions then in force and shall be in
23
office, according to the shareholders’ resolution, for three years and thus until the date of the
General Meeting convened to approve the financial statements for the year ending December 31,
2017.
The statutory norms that regulate the appointment and replacement of the Directors are contained
in art. 17 of the By-laws and outlined below:
- Article 17)
1. The Company is managed by a Board of Directors consisting of seven to fifteen members,
who must meet the requirements of primary and secondary legislation in force pro tempore, as
well as the codes of conduct drafted by companies managing regulated markets or by trade
associations to which the Company adheres (hereinafter also the “Codes of Conduct”), and may
be reappointed. Of these, a number corresponding to at least the minimum required by the
primary and secondary legislation in force pro tempore shall be in possession of the
independence requirements prescribed herein (hereinafter also the “ Independent Directors” ).
2. The General Meeting, prior to their appointment, shall determine the number of Board
members and the term of office within the limits established by the law.
3. The Company’s directors shall be appointed by the General Meeting on the basis of lists,
in which no more than fifteen candidates shall be indicated, each associated to a progressive
number.
A candidate may appear on only one list under penalty of ineligibility.
Shareholders having the right to vote who, alone or together with other shareholders, represent
at least the percentage of share capital set by the National Commission for Companies and Stock
Exchange are entitled to submit lists.
24
The ownership of the percentage of share capital is determined with regard to the shares
registered in favor of the shareholders on the day when the list is filed at the Company, with
reference to the share capital subscribed at that date.
The related declaration can be communicated to the Company also after the filing of the list,
provided it is received by the deadline for publication of the lists by the Company.
The Company allows shareholders who intend to submit lists to proceed with filing through at
least one means of remote communication, in the manner which shall be disclosed in the
convocation notice of the General Meeting and which allows the identification of shareholders
who shall proceed with filing.
The shareholding portion required for the submission of lists of candidates for the election of the
Board of Directors shall be indicated in the convocation notice of the meeting called to approve
the appointment of said body.
4. A shareholder may not submit or vote for more than one list, even through a third party
or through trust companies. Shareholders belonging to the same group - intended as the parent
company, subsidiaries and companies under joint control - and shareholders who are parties to a
shareholders’ agreement pursuant to article 122 of Legislative Decree no. 58/1998 regarding
issuer’s shares may not submit or vote on more than one list, even through a third party or trust
companies.
5. For the purposes of compliance with the minimum number of Independent Directors
referred to in paragraph 1 of this article, each list shall identify a minimum number of
candidates, calculated on the basis of the total number of candidates therein, who satisfy the
independence requirements provided by primary and secondary legislation in force pro tempore.
25
In order to ensure gender balance in accordance with primary and secondary legislation in force
pro tempore, each list containing a number of candidates equal to or greater than three shall
have the presence of candidates of both genders, so that at least one third belongs to the less
represented gender, rounded up in the event of a fractional number of candidates. In the first
application, the portion reserved for the less represented gender is equal to at least one-fifth,
rounded up in the event of a fractional number.
6. Lists are filed at the Company within the twenty-fifth day before the date of the meeting called
on first or second call to resolve on the appointment of the members of the Board of Directors
and made available to the public at the registered office, on the website and other manner
prescribed by the National Commission for Companies and the Stock Exchange with regulation
at least twenty-one days prior to the Meeting.
The lists contain:
a) information regarding the identity of the shareholders who submitted the lists, indicating
the percentage of shares held;
b) a declaration by shareholders other than those holding, even jointly, a controlling or
relative majority shareholding, certifying the absence or existence of any relation with the latter,
in accordance with the provisions of article 147-ter of Legislative Decree no. 58/1998 and article
144-quinquies, first paragraph, Consob Resolution no. 11971/1999 (hereinafter also the
“ Issuers’ Regulation” );
c) exhaustive information on the personal and professional characteristics of the candidates,
a statement by the candidates attesting that they meet statutory requirements and accept the
appointment and regarding any possession of the independence requirements provided by article
26
148, paragraph 3 of Legislative Decree no. 58/1998 and possibly any additional requirements of
the primary and secondary legislation in force pro tempore, and the Codes of Conduct.
The lists presented without compliance with the foregoing provisions shall not be submitted for
voting.
7. The Chairperson of the General Meeting, before opening the vote, shall refer to any
declarations referred to in letter b) above, and require Meeting participants who have not filed
or participated in filing of lists to declare any relations as defined above.
If an individual who is connected to one or more reference shareholders has voted for a minority
list, the existence of said relation shall only become relevant if the vote was crucial for the
election of the director.
8. After the vote, the votes obtained by the lists are divided by whole numbers from one to the
number of directors to be elected, regardless of lists that did not achieve a percentage of votes
equal to at least half of as required for submission thereof.
The resulting quotients are attributed to the candidates of each list, according to the order
envisaged therein.
Therefore, the quotients attributed to the candidates of the various lists are in a single list in
decreasing order. The candidates elected, up to the number of directors set by the General
Meeting, are those who have obtained the highest quotients, without prejudice to the fact that the
director appointed shall be the candidate at the top of the second list that obtained the highest
number of votes and that is not connected in any way, even indirectly, with the shareholders who
submitted or voted for the list with the most votes.
Therefore, if said candidate has not obtained the quotient necessary to be elected, the candidate
27
who obtained the lowest quotient from the list that obtained the most votes shall not be deemed
appointed and the board will be completed with the appointment of the candidate at the top of the
second list that obtained the most votes.
9. The candidate at the top of the list that obtained the most votes shall be elected as Chairperson
of the Board of Directors.
10. If to complete the entire Board of Directors several candidates have obtained the same
quotient, the candidate elected shall be from the list that has not yet elected a director or that has
elected the fewest directors.
If none of these lists has elected a director or they have all elected the same number of directors,
within these lists, the candidate elected shall be from the list that obtained the most votes.
In case of equal number of list votes and equal quotient, there shall be a new vote by the General
Meeting, and the candidate who obtains the simple majority of votes shall be elected.
If proceeding as such, within the new Board of Directors at least the minimum number of
Independent Directors required by the primary and secondary legislation in force pro tempore is
not elected, the procedure will be as follows: candidates who would be elected last based on the
progressive quotient and taken from the first list that obtained the most votes, are replaced by
candidates immediately following, which obtained the lower progressive quotients, and identified
in the same list as Independent Directors.
If following the vote and operations above the composition of the Board of Directors does not
comply with primary and secondary legislation in force pro tempore regarding the gender
balance, the candidate of the most represented gender elected last on the basis of the progressive
quotient and taken from the first list that obtained the most votes, is replaced by the first
28
candidate of the less represented gender that obtained the lower progressive quotient and
indicated in the same list, providing compliance with the minimum number of independent
directors required by the provisions in force pro tempore. If this were not the case, the replaced
candidate of the most represented gender would be from time to time the subject elected for
penultimate, third last and so on, based on the progressive quotient also taken from the first list
that obtained the most votes.
If, doing so, the result requested is not ensured, substitution shall take place by General Meeting
resolution decided by the relative majority, upon the presentation of the candidates that belong to
the less represented gender.
11. If only one list has been submitted, the General Meeting shall vote on it and, if it obtains
the relative majority of votes, without counting abstentions, the candidates listed in progressive
order up to the number set by the General Meeting shall be elected.
The candidate at the top of the list shall be elected Chairperson of the Board of Directors.
If proceeding as such, in the presence of a new Board of Directors the provisions currently in
force are not complied with as regards Independent Directors and/or gender balance, the
procedure will be mutatis mutandis as described above in paragraph 10 of this article.
12. In the absence of lists, and if through the voting mechanism by list the number of
candidates elected is less than the number established by the General Meeting, the Board of
Directors shall respectively be appointed or integrated by the Meeting with the majorities
required by law.
13. In the event of termination of office, for any reason, of one or more directors, those
remaining in office shall replace them by co-option in accordance with and for the effects of art.
29
2386 of the Civil Code, subject to the requirement to comply with the minimum number of
Independent Directors and the provisions of primary and secondary legislation in force pro
tempore, as well as the Codes of Conduct, also with reference to the gender balance.
The meeting appointment of directors to replace directors resigned from office, also as a result of
co-option of the same, is freely performed with the legal majority, without prejudice to the
obligation to respect the minimum number of Independent Directors and the provisions of the
primary and secondary legislation in force pro tempore with regard to gender balance.
14. The directors indicated in the respective list as Independent Directors are applied the
obligation to immediately inform the Board of Directors of the loss of the related requirements,
and the consequent termination, pursuant to the law.
The Ordinary General Meeting of Banca Mediolanum of March 19, 2015 confirmed as Chairman
Ennio Doris (formerly CEO of Mediolanum S.p.A.) - non-executive - to which the following
tasks and powers have been conferred:
• general representation of the Bank towards third parties;
• promote the effective functioning of the Bank’s governance system:
o verifying the implementation of the resolutions of the General Meeting, the Board of
Directors and the provisions and guidelines of the Chief Executive Officer;
o coordinating the activities of the corporate bodies also in order to ensure a balance of
powers with respect to the attributions of the CEO and other Executive Directors;
o overseeing the progress of corporate affairs and compliance thereof with the corporate
strategic development guidelines of the Bank;
• be the interlocutor of the internal control bodies and internal committees; in this regard, it
30
has the power to convene, independently or at the request of other directors, special meetings
of the independent directors alone to discuss issues deemed of interest regarding the
operation of the Board of Directors or company management;
• ensure that the information and documents relevant for taking decisions within the
authority of the Board are made available to its members in an appropriate manner and
timing;
• oversee relations with public and private institutional bodies, shareholders, and external
relations of the Bank;
• promote and coordinate the Bank’s communication strategies and oversee its image with
the public and relations with the press or other media;
• adopt, on the proposal of the CEO, any measures having urgency in the interest of the
Bank and for which it is impossible to convene the Board of Directors in due time, to
which it shall, however, be required to report at the next meeting.
In 2015, in the exercise of its legal and statutory powers in force, the Banca Mediolanum S.p.A.
Board of Directors confirmed:
- CEO Massimo Antonio Doris (formerly Vice Chairman of Mediolanum S.p.A.);
- Vice Chairmen Edoardo Lombardi (formerly Director of Mediolanum S.p.A.) and Giovanni
Pirovano – respectively non-executive and executive – the first of which with vicarious functions
of the Chairman.
It is pointed out that Ennio Doris (Chairman of the Board of Directors) and Edoardo Lombardi
(Vice Chairman) have been qualified as non-executive directors as the powers conferred to them
- as outlined below - meet the requirements of Circular no. 285 of December 17, 2013 of the
31
Bank of Italy, Part I, Title IV, Chapter I, Section V, paragraph 2. These powers do not entail, not
even de facto, management functions.
The CEO, Massimo Antonio Doris, under the By-laws - in addition to the general representation
of the Bank - has been conferred by the aforementioned Board of Directors the supervision and
accountability of operations, production activities and services offered by the Bank, as well as the
following powers:
- supervises the ordinary management of the company in the context of directives established by
the Board of Directors, ensuring that the operation of the same complies with the laws and
regulations in force;
- executes the resolution of the Board of Directors;
- ensures the application of the directives issued implementing supervisory regulations and codes
of conduct adopted by the company, as part of the guidelines provided by the Board of Directors;
- develops and proposes the strategies and operational plans for the periodic budget and business
development projects, to be submitted to the Board of Directors;
- ensures the implementation of the approved operational plans;
- proposes and implements, within the guidelines established by the Board of Directors, the
criteria and forms of the organization structure of the company;
- ensures the application of the rules to be followed by the various areas of the Bank in carrying
out the coordination and control activities of the corresponding functions of the subsidiaries;
- represents the Bank in all General Meetings, both ordinary and extraordinary, of any company,
consortium, association, in which it is a shareholder, exercising the right to vote and any other
corporate law entitled in these proceedings, issuing proxies to employees or third parties pursuant
32
to and for the effects of art. 2372 of the Civil Code and any other statutory norm or law on the
matter;
- proposes the establishment of advisory or coordination committees, in order to provide
indications for the initiatives of interest of the Bank and the banking group and/or for the study of
particularly important subjects, without prejudice to the final decision of the Board of Directors;
- grants overdrafts within the limits of the powers established by the Board, with the exclusion of
the entities covered by the provisions of art. 136 of the CBA;
- elaborates and defines the contractual and economic conditions, assets and liabilities of the
various services and products offered by the Bank and the Group, reporting to the Board of
Directors;
- assumes, promotes, allocates to new positions, suspends, dismisses the Bank’s employees,
including executives, establishing all related conditions, also economic, excluding the
appointment and termination of control function managers;
- stipulates, with all the appropriate clauses, modifies and terminates property leasing agreements,
cooperation agreements, trade and exchange contracts of tangible assets, contracts for supplies
and services, trade agreements, financial lease agreements for vehicles and other means of
transportation, up to the amount or value per contract of Euro 3,000,000.00 (three million) and
for the maximum duration of up to 6 years; without prejudice to the rules governing transactions
with related parties as well as the exclusive competence of the Board in the cases provided for by
art. 136 of the CBA;
- authorizes transactions in financial instruments with the Bank of Italy and with Italian and
foreign institutional counterparties, within the limits of the powers established by the Board of
33
Directors;
- participates in placement consortia undertaking the maximum guarantee of Euro 5,000,000.00
(five million) for each placement;
- represent the Bank in any bankruptcy proceedings;
- makes administrative requests and appeals before any public authority in any field and matter,
also fiscal, with the right to accept and/or define taxable income;
- promotes actions before any judicial and administrative authorities, both in terms of knowledge
and execution; opposes legal disputes; appoints and dismisses attorneys, conferring any
consequent power, including the right to settle;
- issues garnishee’s statements;
- allows reductions, cancellations and renunciations of voluntary and judicial mortgages,
registered in favor of the Bank with exemption of competent property registrars from all liability
in this regard, with the power to fulfill all the claims and duties required;
- renounces executive acts, cancels privileges transcripts in general, as well as subrogation in
favor of third parties for loans fully repaid or settled;
- acts, opposes and renounces judgment acts, before any judicial and administrative authorities, at
any stage and degree and in any location, and thus both in terms of full knowledge and as a
precautionary or urgent measure and execution;
- registers judicial mortgages and transcribes seizures and foreclosures; acquires voluntary
mortgages and real and personal guarantee and renounces them; exercises the right to vote as a
pledgee;
- acts and opposes in litigations for appeals and revocations of claims and judgments of
34
opposition and revocation in bankruptcy proceedings;
- reaches settlement agreements, and grants payment moratoriums and extensions for both the
main debtors and joint debtors in any capacity;
- ascertains losses and makes agreements and transactions that still affect the debt in the income
statement, directly or indirectly, up to Euro 1,000,000.00 (one million).
In urgent cases, the CEO may make proposals to the Chairman that exceed the limits of its
powers; the Chairman, acting under the powers conferred, will evaluate the adoption of the
related emergency measures.
The CEO may also attribute, within the limits of the powers conferred, special proxies for single
acts or categories of acts to Bank personnel or third parties, supervising the acts performed by the
individual agents.
The Vice Chairman, Edoardo Lombardi, under the By-laws - in addition to the general
representation of the Bank - was assigned by the Board of Directors of March 19, 2015, the
following attributions:
- exercises, under the By-laws, the vicarious functions of the Chairman;
- supports the Chairman and CEO in promoting the effective functioning of the governance
system of the Bank and its subsidiaries, with particular reference to the organization and
operation of the company Bankhaus August Lenz & Co. AG;
- verifies the correct execution, by the Company Bankhaus August Lenz & Co. AG, of the
resolutions of the General Meeting, the Board of Directors and the provisions and guidelines of
the Chief Executive Officer;
- proposes to the Board of Directors of the Bank the appointment/dismissal and remuneration of
35
the members of the bodies with strategic supervision and management function of the company
Bankhaus August Lenz & Co. AG in compliance with the remuneration and incentive policies
approved by the parent company;
- promotes the circulation of information in favor of the Board of Directors and Chief Executive
Officer, respectively, for own competences, with reference to the affairs of the company
Bankhaus August Lenz & Co. AG and related compliance with the company strategic
development guidelines set by the parent company;
- deals with relations of the same Company Bankhaus August Lenz & Co. AG with local private
and public institutional organisms;
- promotes the communication strategies of the Company Bankhaus August Lenz & Co. AG in
accordance with the guidelines and as established by the parent company.
The Vice Chairman, Giovanni Pirovano - in addition to the general representation of the Bank -
was conferred by the Board of Directors of March 19, 2015, the following duties and powers:
- represents the Bank in relations with the Supervisory Authorities and other institutional bodies
and administrative entities;
- implements the decisions of the Board of Directors regarding the duties with the
aforementioned institutions;
- represents the Bank in all the meetings, both ordinary and extraordinary, of any company,
consortium, association, in which it is a shareholder, exercising the right to vote and any other
corporate law entitled in these proceedings, issuing proxies and related instructions to employees
or third parties pursuant to and for the effects of art. 2372 of the Civil Code and any other
statutory norm or law on the matter.
36
In 2014, the Board also appointed as General Manager Gianluca Bosisio conferring the following
powers:
- supervise the ordinary management of the company in the context of directives
established by the CEO, ensuring that the operation of the same complies with the laws
and regulations in force;
- execute the resolution of the Board of Directors;
- sign requests, statements and communications to the Chambers of Commerce, Bank of
Italy, Consob, the Italian Stock Exchange, Ministries and other public authorities, and any
other public or private office regarding the fulfillments of the Bank by laws, regulations,
circulars and supervisory instructions;
- represent the Bank in all General Meetings, both ordinary and extraordinary, of any
company, consortium, association, in which it is a shareholder, exercising the right to vote
and any other corporate law entitled in these proceedings, issuing proxies to employees or
third parties pursuant to and for the effects of art. 2372 of the Civil Code and any other
statutory norm or law on the matter;
- grant overdrafts within the limits of the powers established by the Board, with the
exclusion of the entities covered by the provisions of art. 136 of the CBA; grant special
active or passive conditions to individual customers, within the guidelines established by
the competent bodies;
- define the contractual and economic conditions, assets and liabilities of the various
services and products offered by the Bank and the Group;
- stipulate, with all the appropriate clauses, modify and terminate property leasing
37
agreements, cooperation agreements, trade and exchange contracts of tangible assets,
contracts for supplies and services, trade agreements, financial lease agreements for
vehicles and other means of transportation, up to the amount or value per contract of Euro
2,000,000.00 (two million) and for the maximum duration of up to 6 years; without
prejudice to the rules governing transactions with related parties as well as the exclusive
competence of the Board in the cases provided for by art. 136 of the CBA;
- have all the necessary actions for maintenance, adaptation and restructuring of real estate
property and other properties leased to third parties for functional purposes, up to the
amount per contract of Euro 1,500,000.00 (one million five hundred thousand);
- authorize spending uses without limits of amount, within the appropriations already
approved by the competent bodies, without prejudice to the limits set out in the preceding
points: authorize the transfer from one expenditure item to another in amounts not
exceeding 10% of each appropriation;
- authorize transactions in financial instruments with the Bank of Italy and with Italian and
foreign institutional counterparties, within the limits of the powers established by the
Board of Directors;
- participate in placement consortia undertaking the maximum guarantee of Euro
3,000,000.00 (three million) for each placement;
- stipulate, modify and terminate, with all the appropriate clauses, insurance contracts of
any kind and postal and bank account contracts, including ancillary and related services;
- collect payments and values due to the Bank, issuing a receipt upon settlement and
release;
38
- collect documents and envelopes containing values, money and telegraphic orders and
anything else directly to the Bank, at any public and private office and especially at the
Administration of Post offices, issuing releases and receipts exonerating the offices from
any responsibility;
- perform all operations at the Public Debt, the Inland Revenue and any other entity,
obtaining the titles, amounts and values, issuing a receipt exonerating the offices from any
responsibility;
- issue bank and postal checks, within the limits of the sums available at drawees or within
the limits of credit facilities, endorse and cash checks, money orders and bills; carry out
endorsements and receipts relating to releases, contract transfers and settlement of
securities;
- represent the Bank in any bankruptcy proceedings;
- make administrative requests and appeals before any public authority in any field and
matter, also fiscal, with the right to accept and/or define taxable income;
- promote actions before any judicial and administrative authorities, both in terms of
knowledge and execution; oppose legal disputes; appoint and dismiss attorneys,
conferring any consequent power, including the right to settle;
- issue garnishee’s statements;
- allow reductions, cancellations and renunciations of voluntary and judicial mortgages,
registered in favor of the Bank with exemption of competent property registrars from all
liability in this regard, with the power to fulfill all the claims and duties required;
- renounce executive acts, cancels privileges transcripts in general, as well as subrogation
39
in favor of third parties for loans fully repaid or settled;
- act, oppose and renounce judgment acts, before any judicial and administrative
authorities, at any stage and degree and in any location, and thus both in terms of full
knowledge and as a precautionary or urgent measure and execution;
- register judicial mortgages and transcribe seizures and foreclosures; acquire voluntary
mortgages and real and personal guarantee and renounce them; exercise the right to vote
as a pledgee;
- act and oppose in litigations for appeals and revocations of claims and judgments of
opposition and revocation in bankruptcy proceedings;
- reach settlement agreements, and grant payment moratoriums and extensions for both the
main debtors and joint debtors in any capacity;
- ascertain losses and make agreements and transactions that still affect the debt in the
income statement, directly or indirectly, up to Euro 500,000.00 (five hundred thousand).
The General Manager may also attribute, within the limits of the powers conferred, special
proxies for single acts or categories of acts to Bank personnel or third parties, supervising the acts
performed by the individual agents.
Delegated activities, as well as the general operating performance and its outlook (also referred to
subsidiaries), major economic, financial and capital transactions in which directors have an
interest, on own account or of third parties and those governed by Consob Resolution 17221 on
transactions with related parties and art. 53 of the Consolidated Banking Act in terms of
Associates, constantly form the subject of reporting presented to the Board and Board of
Auditors, through a system of periodic reports, at least quarterly as per the statutory provision in
40
force (art. 20).
The distribution of assignments realized is addressed, specifically, to allow the Board of
Directors to focus on the objective of creating value for shareholders.
In accordance with the regulations of the sector and with a view to creating value, the Board
reserved itself the following tasks (art. 23 of the By-laws):
1. The Board of Directors shall be entitled to all powers for the ordinary and extraordinary
management of the Company, and shall be empowered to carry out all acts deemed appropriate
for the achievement and implementation of the company purpose, to the exclusion only of those
specifically reserved by law to the General Meeting.
2. The Board of Directors has exclusive responsibility for, in addition to as provided by
primary and secondary legislation in force pro tempore:
- definition of the overall governance structure and the approval of the guidelines of the
organizational structure of the bank;
- approval of the accounting and reporting systems;
- supervision of the process of public information and communication of the bank;
- ensuring effective dialectic discussion with the management function and the managers of the
main company functions and verifying over time the choices and decisions adopted by the latter;
- determination of the general management guidelines, including decisions regarding the
strategic lines and operations and business and financial plans;
- approval and amendments of main internal regulations;
- appointment and dismissal of the Managing Director;
- appointment and dismissal of the Heads of the functions of Internal Audit, Compliance and Risk
41
Control;
- acquisition and disposal of equity investments modifying the composition of the group;
- establishment of committees or commissions with consultancy or coordination functions,
including the Risk Committee, the Appointments Committee and the Remuneration Committee,
whose operation shall be governed by special Board regulations;
- determination of criteria for the coordination and management of the banking group
companies, as well as determination of criteria for execution of the instructions of the Bank of
Italy.
3. Except as provided in article 15.2 of these By-laws, the Board of Directors is responsible
for the adoption of resolutions concerning:
− the merger in the cases provided for in article 2505 of the Civil Code, within the limits of law;
− the establishment or closing of secondary offices, and the establishment, transfer and closing of
branches and agencies;
− the indication of which directors may represent the Company;
− reduction of capital in the event of withdrawal of a shareholder;
− adaptations of the by-laws to regulatory provisions;
− the issue of non-convertible bonds in accordance with the primary and secondary legislation in
force pro tempore.
The main legislative and regulatory amendments are made known and explained to the Board by
the Legal & Compliance function and the Corporate Affairs Division, which will collaborate with
the Chairman in order to help provide Board members with increasingly adequate knowledge of
the business sector.
42
On July 21 and November 23, 2015, the Directors and Auditors of Banca Mediolanum S.p.A.
participated in two Board Induction sessions targeted to explore certain issues relating to
governance.
An exhaustive discussion of each item on the agenda during the board meeting is ensured,
supported, in principle, by both the presence of the function managers in order to provide
appropriate information on the agenda items, and the prior sending of appropriate documentation
to Directors and Auditors.
The Issuer - for adhesion to the Code and in line with as done previously by the merged company
Mediolanum S.p.A. - continued to consider crucial for proper examination and board discussion -
unless precluded by confidentiality issues - the prior sending of any documentation available to
support the meetings with notice usually not less than 48 hours with respect to the Board
meeting.
The Independent Directors of the Issuer have acknowledged compliance with said provision for
the year 2015.
The Chairman of the Board of Directors, also at the request of one or more Directors, may ask the
executives of the company and those of the group companies that it heads, and the managers of
the competent company functions depending on the matter, to attend board meetings to provide
useful information on agenda items.
The Board of Directors of Banca Mediolanum has defined the following general criteria to
express its orientation on the maximum number of Director and Auditor positions held by its
members in companies that involve significant commitments (listed companies, banks, insurance,
financial and large companies) and that also take into account participation in Board Committees:
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I) an executive director shall not hold:
i) the office of executive director of another listed company, Italian or foreign, or a
finance, bank or insurance company;
ii) the office of non-executive director or auditor (or member of another control body) in
more than five of the aforementioned companies;
II) a non-executive director, in addition to the office held at the Company, shall not hold:
i) the office of executive director in more than three of the aforementioned companies and
the office of non-executive director or auditor (or member of another control body) in
more than five of the same companies;
or
ii) the office of non-executive director or auditor (or member of another control body) in
more than eight of the aforementioned companies.
Any multiple positions held within the same group of companies - and thus linked to each other
by having in common the shareholder or shareholders of reference and/or under common control
- shall be considered as a single position.
For non-executive Directors who are also members of one or both of the company’s Board
Committees, the limits described above need to be curtailed, respectively, of a 50% portion of the
office or an entire portion of office.
The Board of Directors reserves the right to make a different assessment, which will be duly
disclosed in the annual report on corporate governance.
On this point, it is emphasized that it is waiting for the legislation implementing the provisions of
“Legislative Decree May 12, 2015, no. 72. Implementation of Directive 2013/36/EU (Directive
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CRD IV), amending Directive 2002/87/EC and repealing Directives 2006/48/EC and
2006/49/EC, as regards access to the activity of credit entities institutions and the prudential
supervision of credit entities and investment firms. Amendments to legislative decree September
1, 1993 no. 385 and Legislative Decree February 24, 1998, no. 58”, which will entail, among
other things, specific provisions regarding the prohibition of accumulation of offices in order to
ensure that the company executive has enough time to dedicate to the office assigned.
Simultaneously with the periodic self-assessment of the Board of Directors, each Director was
asked to report on compliance or otherwise of said limit to the accumulation of offices also in
accordance with the provisions of the Corporate Governance Project of Banca Mediolanum
S.p.A..
With express reference to the year 2015, all the Banca Mediolanum Directors declared to comply
with the above limit.
Internal Dealing
The Board of Directors of Banca Mediolanum S.p.A. - pursuant to art. 114, 7th paragraph of the
CFA - approved the “Regulation for trade transactions carried out by relevant persons and
persons closely associated with them - INTERNAL DEALING” - available on the Company
website.
Said Regulation, approved on September 23, 2015 and effective from the date of commencement
of trading of the ordinary shares of the Company on the MTA, in line with the regulatory
provisions (described in summary in the annex to the same Regulation) regulates the purchase
and sale transactions of the shares of the Issuer and of financial instruments connected to them,
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which in the year, amount to Euro 5,000.00, and which are conducted by so-called “Key
Personnel” as defined by art. 152-sexies of the Consob Issuers’ Regulations (Consob Resolution
no. 11971/99) directly or through third-parties or trustees, as well as persons closely associated
with the above key parties. After each communication, transactions are not communicated whose
total amount does not reach a value of an additional Euro five thousand by the end of the year.
In addition to the key personnel identified by law (Directors, Auditors, General Manager of the
Company and persons closely related to them), the Company considered that the legislation is
also applicable to the Financial Reporting Manager pro tempore.
The Regulation also produces consequences only for the subsidiaries that integrate the case
provided for in article 152-sexies, paragraph 1, lett. c3) of the Issuers’ Regulation.
The Board of Directors of the parent company Banca Mediolanum S.p.A. verifies once a year,
during the Board approval of the draft financial statements, if among the book values of the
investments in subsidiaries (directly or indirectly), there is a book value representing more than
fifty per cent of the listed issuer’s assets as per the last approved financial statements.
If said verification is positive, Banca Mediolanum S.p.A. will provide timely information to its
subsidiary on the existence of the parameters referred to above, provided that the General
Meeting of Banca Mediolanum S.p.A. has approved the corresponding annual financial
statements and with effect from the date of approval.
As a result, the Subsidiary will be required to identify the key personnel for the regulation of the
‘‘internal dealing”.
As provided by the current regulation, the Parties mentioned above and required to provide
notifications may delegate the Corporate Affairs Division of the company, to proceed with the
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required notifications in the manner and within the terms provided by art. 152-octies of the
Issuers’ Regulation.
The relevant purchase and sale transactions for the purpose of Internal Dealing are published on
the Company’s website - within the trading day following their communication - and
communicated to Consob, the market management company and the public.
Circulation of Confidential and Privileged Information
In application of article 115-bis of the Consolidated Finance Act, a Register was set up of persons
who have access to privileged information (i.e. information that has not been made public,
relating directly to Banca Mediolanum S.p.A. or its subsidiaries that could, if disclosed, have a
significant effect on the prices of its financial instruments).
According to the application procedures set out in article 152-bis and following of the Consob
Issuers’ Regulation, each Group company - a subsidiary of Banca Mediolanum S.p.A. - set up, in
continuity with the previous, its Register of persons who, because of their working or
professional activity or because of their duties, have access to the information referred to in
article 114, paragraph 1 (privileged information defined in art. 181 CFA) delegating to Banca
Mediolanum S.p.A., the keeping of the same.
The Register is managed according to a specific adopted procedure.
The procedural arrangements for managing the information defined - including keeping the
Register - are contained in the “Manual for the circulation and monitoring of confidential and
privileged information”, approved on September 23, 2015, which was disseminated to all
subsidiaries of the Group and which is posted on the Company’s website
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(www.bancamediolanum.it) in the Corporate Governance section under Other corporate
documents.
The procedure contained in the aforementioned manual became effective from the date of filing
with the Italian Stock Exchange of application for admission to trading of the Company’s
ordinary shares on the MTA organized and managed by Borsa Italiana S.p.A.
The Persons who are registered in the Registers are, by law, informed about it and the legal
consequences that this entails, also with reference to the regulatory extract published on the
company website.
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2. ADHESION TO THE CORPORATE GOVERNANCE CODE
On September 23, 2015, Banca Mediolanum S.p.A. approved its adhesion to the Corporate
Governance Code of listed companies - available on the website www.borsaitalia.it - taking all
necessary decisions in order to adapt its corporate governance system to the recommendations in
the Code in force.
The Company also provided that, for transactions that have a significant strategic, economic,
equity or financial importance for Banca Mediolanum S.p.A. subsidiaries shall submit the
transaction to the Board of Directors of the parent company Banca Mediolanum S.p.A.
Board of Directors
The Board of Directors is the body responsible for company management. In this context, the
Banca Mediolanum S.p.A. Board of Directors acts as the body responsible for strategic
supervision and it is assigned the guidance functions of the management of the company, with the
task of defining the guidelines of the Internal Control System, verifying that it is consistent with
the strategic guidelines and risk appetite established and is able to manage the evolution of
business risks and the interaction between them.
In the collegial exercise of the strategic supervision function, the Corporate Governance Project
expressly provides that the Board of Directors, in addition to the competences reserved under art.
23 of the By-laws (see above pg. 40):
• Determines and approves the guidelines and policies regarding Group corporate governance.
• Resolves on the adaptations of the By-laws to imperative regulatory provisions.
• Approves, with the favorable opinion of the control body, the corporate governance project and
49
subsequent revisions thereof, every time there are significant organizational changes.
• Approves the procedure for ongoing updating of the governance and control aspects required
under the corporate governance project.
• Resolves on the conferment of the representation of the Company to the Directors.
• Appoints and dismisses the Managing Director, determining the remuneration.
• Resolves on the appointment and dismissal of the Chairperson, the two Vice Chairpersons, the
Secretary and the Chief Executive Officer (articles 18 and 24 of the By-laws).
• Resolves, after consulting with the Board of Auditors, on the allocation or determination of
remuneration for Directors with particular offices, depending on whether the General Meeting
has included said remuneration in the overall amount for the remuneration of Directors (art. 24 of
the By-laws).
• Decides on the establishment of committees or commissions with consultancy, coordination and
decision-making functions.
• Determines the criteria for the coordination and management of Group companies and for the
execution of the instructions issued by the Bank of Italy in the exercise of the power granted to
the Parent Company to impart instructions to Group members.
• Approves and issues, through the approval of appropriate regulations, the provisions to Group
companies for the execution of the instructions imparted by the Bank of Italy in the interest of
Group stability.
• Verifies compliance by the Group companies with the instructions imparted.
• Establishes, depending on the composition, structure and changes in the Group, which
Subsidiaries are of strategic importance.
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• Defines the main internal regulations with regard to the overall organizational structure.
• Determines the general management guidelines, including decisions regarding the strategic lines
and operations and business and financial plans.
• Determines and approves the guidelines and policies regarding:
o employees of the Bank and contract workers not bound to the Company by an employment
relationship (qualitative and quantitative composition of the workforce, policies for selection,
hiring, training, advancement, etc.);
o business processes;
o information systems (strategies, controls, application architecture, data quality, information
security management, use of external resources, etc.).
• Periodically assesses the adequacy of the organizational, administrative and accounting
structure of the Bank and the Companies of the Banking Group, with particular reference to the
internal control system and management of conflicts of interest.
• Ensures continuously that the tasks and responsibilities are allocated clearly and appropriately,
with particular reference to delegation mechanisms; also provides instruments for the verification
of the exercise of powers delegated.
• Approves the organizational and internal control structures aimed at ensuring the correctness,
veracity and validity of the data included in financial reports, Supervisory reports and summary
tables under the regulations on disclosure to the public (“Third Pillar”).
• Determines and approves the general management guidelines.
• Approves the guidelines of the strategic plan and the operating budgets of the Bank and the
Group and verifies their proper implementation.
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• Approves the equity plan including the capitalization targets of the Bank and the Group and
verifies implementation and respect through the ICAAP.
• Resolves on the opening or closing of secondary offices and the transfer of the registered office
within Italy.
• Decides on the establishment, transfer and closing of branches and agencies.
• Determines and approves the guidelines and policies regarding:
Group development (in compliance with the targets within the guidelines of the strategic
and multi-year equity plan and the operating budgets of the Company and the Group);
conditions to practice for active and passive operations;
management of the introduction of new products, new services and new activities;
marketing and commercial policies.
• Defines and approves the criteria for identifying the Significant Operations to be submitted to
the prior examination of the risk control functions.
• Approves the company policy of outsourcing of business functions.
• Ensures that the guidelines of the strategic plan, the RAF, the ICAAP, the Budget and the ICS
are consistent, taking into account the evolution of the internal and external conditions in which
the Bank operates.
The Board of Directors consists of 11 members appointed by the General Meeting on March 19,
2015 in accordance with the statutory provisions then in force and shall be in office until the
General Meeting called to approve the financial statements at December 31, 2017.
As a result of the above resolutions, the communications of the parties concerned and
verifications of the requirements carried out by the Company’s directors at the Board meeting of
52
March 19, 2015, which was held immediately after the meeting which appointed them, the Board
is currently composed as follows:
1. Ennio Doris - Chairman (without proxies) - Non-Executive
2. Edoardo Lombardi - Vice Chairman - Non-Executive
3. Giovanni Pirovano - Vice Chairman - Executive
4. Massimo Antonio Doris - CEO - Executive
5. Bruno Bianchi - Director - Independent pursuant to the Corporate Governance Code and
art.147-ter CFA
6. Luigi Del Fabbro - Director - Executive
7. Annalisa Sara Doris - Director - Non-Executive
8. Paolo Gualtieri - Director - Independent pursuant to the Corporate Governance Code and
art.147-ter CFA
9. Angelo Renoldi - Director - Independent pursuant to the Corporate Governance Code and
art.147-ter CFA
10. Antonio Maria Penna - Director - Non-Executive
11. Carlos Javier Tusquets Trias de Bes – Non-Executive
In 2015, 15 meetings of the Board of Directors were held (average duration: 2 hours 38 minutes).
In 2016, 12 meetings of the Board of Directors are currently planned, of which 2 already held,
respectively on January 21 and February 18.
On September 23, 2015, on the basis of information provided by the Directors already declared
independent under the previously applicable By-laws, the Board of Directors evaluated the same
also as independent pursuant to art. 148, paragraph 3, of the CFA, as referred to in art. 147-ter,
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paragraph 4, of the Consolidated Finance Act, and pursuant to art. 3 of the Corporate Governance
Code.
With reference to the qualification of Mr. Gualtieri and Mr. Renoldi as independent pursuant to
the Corporate Governance Code, it is emphasized that the Board of Directors reaffirmed, in view
of the prevalence of substance over form, as already previously affirmed also by the parent
company, and therefore unanimously agreed on the fact that said qualification is also with
reference to application criterion 3.C.1. e), that is the persistence in office for more than nine
years in the last twelve.
In fact, the Board verified and considered the permanence of the ethical qualities of the
individuals in question and recognized professional qualities that have always allowed them to
maintain and exercise the complete autonomy and independence of judgment - as also, among
other things, stated by the same in the self-certification submitted - and considered the existence
of the independence requirement under the Code, also in view of the presence in the office for
more than nine years in the last twelve.
In line with the intent of the merged company Mediolanum S.p.A., the Issuer’s Board of
Directors determined as Euro 200,000.00 per year the amount above which the economic
relationships are defined relevant and confirmed the second family degree as a relevant level the
definition of close family members.
Lastly, the Board of Directors found that the presence among its members of three independent
directors pursuant to the CFA and “Code” with respect to the eleven total appointed by the
General Meeting, makes the Board of Directors in line with the provisions of the Corporate
Governance Code, which provides for Issuers belonging to the FTSE-Mib index that at least a
54
third, also by default, of the Board of Directors be made up of Independent Directors.
The Board of Statutory Auditors verified the correct application of the ascertainment criteria and
procedures adopted by the Board to evaluate the independence of its members and shall give
account in its report. The independent directors meet collegially in meetings of independent
directors alone, to assess and monitor the governance of the Company submitting to the Board of
Directors any changes or additions to the Corporate Governance system deemed appropriate, and
assist the Board of Directors in preparing the annual “Corporate Governance Report” for the
purpose of disclosure to shareholders and to the market.
At the meeting on January 21, 2016, the Independent Directors decided not to proceed with the
appointment of a Lead Independent Director and this decision was disclosed at the first Board
meeting.
In 2015, the Independent Directors met 3 times (average duration: 48 minutes), to discuss and to
support the Board as regards the following topics:
- transactions with associates
- suitability of the procedures that Banca Mediolanum S.p.A. intends to adopt in order to
preserve the integrity of the decision-making processes in transactions with related parties as
described in the document entitled “Group Regulations for the management of transactions
with Related Parties of Banca Mediolanum and Associates of the Mediolanum Banking
Group”.
In 2016, the Independent Directors met two times for the assessments referred to in application
criterion 2.C.3. of the Corporate Governance Code for listed companies (Lead Independent
Director) and for the examination of this draft Report on Corporate Governance and Corporate
55
Structure for the year 2015.
Banca Mediolanum S.p.A., in compliance with current legislation, has provided, on an annual
basis, a structured self-assessment process of the bodies with strategic supervision and
management functions.
This process is governed by the “Regulations of the Self-Assessment process of the Board of
Directors of Banca Mediolanum”, which the Bank adopted by resolution of December 17, 2014,
and which includes the following phases:
1) Preparation of self-assessment questionnaires;
2) Completion of self-assessment questionnaires;
3) Processing of the results of the self-assessment questionnaires;
4) Preparation of the self-assessment document;
5) Examination of the results of the self-assessment process by the Board of Directors and
identification of any weaknesses;
6) Definition of any corrective measures;
7) Verification of the implementation of corrective measures.
The analyzes carried out are formalized in the self-assessment document that outlines:
• methodology and individual phases of which the process is composed;
• parties involved;
• results obtained and conclusions.
The document mentioned above is approved by the Board of Directors and submitted, where
required, to the Bank of Italy.
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The self-assessment process usually begins in December of each year, with the activities required
to prepare the assessment questionnaire, and concludes, as a rule, with the first board meeting of
the following year. At said meeting, the Board of Directors expresses its opinion on the adequacy
of the process and, as a result of the analysis of potential weaknesses emerged, defines the
corrective measures for which adoption is required by the Bank.
In 2015 and January 2016, the Board of Directors carried out the self-assessment of the Board by
means of a questionnaire submitted to all Directors and the General Manager, as member of the
body with management function.
After examination of the responses received - at the Board meeting of January 21, 2016 - the
Board, while agreeing on the impact that the configuration of the Bank resulting from the Merger
of Mediolanum S.p.A. into the Bank will have in the considerations to be carried out for the next
self-assessment, unanimously agreed to express even for the year 2015 an appropriate level of
satisfaction regarding the size, composition and functioning of the Board.
The Board of Directors identified as the most significant transactions those in article 23 of the
By-laws, reserved by the latter for the exclusive competence of the Board.
With regard to transactions with related parties and associates, the Board of Directors by
resolution of September 23, 2015 adopted, following a unanimous vote in favor of the
Independent Directors in office, the “Group Regulations for the management of transactions with
related parties of Banca Mediolanum and Associates of the Mediolanum Banking Group”
pursuant to Consob Resolution no. 17221 of 12/03/2010 regarding Related Parties and Bank of
Italy Circular 263 of December 27, 2006, with effect from the Listing Date of the shares of Banca
57
Mediolanum.
The procedure aims to regulate significant transactions (i) with associates of the Mediolanum
Banking Group and (ii) realized by the Company, also through subsidiary companies pursuant to
art. 2359 of the Civil Code or however subject to management and coordination activities with
related parties of Banca Mediolanum to ensure the substantial and procedural correctness of the
same, as well as the correct disclosure to the market.
This document contains definitional and procedural criteria and rules harmonized for transactions
with Related Parties and those with associates. In particular:
• the quantitative limits for the definition of minor ordinary transactions, of minor and major
significance, are normally set by application of the rules established by the Bank of Italy as they
are more stringent than those issued by Consob;
• the operational process, especially with regard to the preliminary assessment and approval
phase, is organized following the rule that is more rigorous between that established by the Bank
of Italy and that established by Consob to regulate the same aspect;
• the scope of the exemptions applicable to intercompany transactions was extended to all the
companies of the Banking Group, as a result of the merger on the control, such as in particular,
the Group’s asset management companies;
• the types of transactions subject to the two regulations and those excluded have been identified;
• the prudential limits related to own funds, however, continue to apply only to transactions with
Related Parties of the Banking Group and the disclosure to be made regarding the transaction is
different depending on whether involving a transaction with Related Party with Associate.
The Banca Mediolanum S.p.A. Board of Directors set up the Appointments Committee and the
58
Remuneration Committee and implemented the functions of the Risk Committee in accordance
with applicable sector discipline (Supervisory Provisions of the Bank of Italy) and as provided
for listed companies.
- Appointments Committee
The Issuer’s Board of Directors of September 23, 2015, resolved, with effect from the date of
commencement of trading of the Ordinary Shares of the Company on the MTA, the constitution
of the Appointments Committee.
The Committee is composed as follows:
- Angelo Renoldi (independent pursuant to CFA and pursuant to “Code”) – Chairman of the
Committee
- Bruno Bianchi (independent pursuant to the CFA and “Code”);
- Annalisa Sara Doris (non-executive).
The Appointments Committee has the power to provide proposals, consultancy and instructions,
expressed in the formulation of proposals, recommendations and opinions with the aim of
allowing the Board of Directors to adopt its own decisions with greater knowledge of facts; in
particular:
• submits opinions to the Board of Directors regarding the size and composition of the same and
makes recommendations on the professional figures whose presence on the Board of Directors is
deemed appropriate and on the topics set out in articles 1.C.3 (maximum number of offices in
listed companies for directors and auditors) and 1.C.4 (exceptions to the prohibition of
competition set out in art. 2390 Civil Code approved by the General Meeting) of the Corporate
Governance Code;
59
• proposes to the Board of Directors candidates for the office of Director in cases of co-option, if
necessary to replace Independent Directors;
• with reference to the need to ensure an appropriate degree of diversification in the collective
composition of the Board of Directors - without prejudice to the obligations under the discipline
of listed banks - sets an objective in terms of the less represented gender quota and prepares a
plan to increase this quota up to the target set;
• supports the Board of Directors in the self-assessment process of bodies, according to the
provisions of Circular 285 (Part I, Tit. IV, Ch. 1, Sect. VI);
• checks the conditions provided for by art. 26 CBA;
• defines succession plans in executive leadership positions required by Circular 285 (Part I, Tit.
IV, Ch. 1, Sect. IV).
In carrying out its duties, the Appointments Committee takes into account the objective to avoid
that the decision-making processes of the Board of Directors are dominated by a single entity or
group of entities that may be detrimental to the Bank.
The Appointments Committee shall annually present its budget and, in an emergency, may
request the support of Executive Directors for related expenses.
The Appointments Committee has access to all information and company units necessary to carry
out its assignment, and the opportunity of hiring external consultants, if necessary
Lastly, it is noted that the meetings of each Committee may be attended by non-members,
including other members of the Board or Company structure, at the invitation of the Committee,
with reference to individual items on the agenda.
The Appointments Committee met in 2016 for assessments regarding application criterion 1.C.1.
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lett. g) of the Corporate Governance Code for listed companies (so-called self-assessment).
The Committee, during the meeting held January 14, 2016, presented to the Board for the year
2016 a budget of Euro 50,000, which was approved by the Board of Directors during the meeting
held January 21, 2016.
In the current year, the Committee will have to deal with - among other things - the Succession
Plan supporting the Board of Directors for the appropriate resolutions.
- Remuneration Committee
The Issuer’s Board of Directors of September 23, 2015, resolved, with effect from the date of
commencement of trading of the Ordinary Shares of the Company on the MTA, the constitution
of the Remuneration Committee.
The Committee is composed as follows:
- Angelo Renoldi (independent pursuant to CFA and pursuant to “Code”) – Chairman of the
Committee
- Paolo Gualtieri (independent pursuant to CFA and pursuant to “Code”);
- Antonio Maria Penna (non-executive)
all in possession of adequate knowledge and experience in financial and accounting matters
and/or remuneration policies.
The Remuneration Committee has the power to provide proposals, consultancy and instructions,
expressed in the formulation of proposals, recommendations and opinions with the aim of
allowing the Board of Directors to adopt its own decisions with greater knowledge of facts; in
particular, it:
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• has the task of proposing remuneration for personnel whose remuneration and incentive
systems are determined by the Board of Directors, including directors and key management
as well as establishing the performance objectives related to the variable component of said
remuneration;
• has advisory tasks regarding determination of the criteria for the remuneration of all key
personnel;
• periodically assesses the adequacy, overall consistency and actual application of the
remuneration policy and submits to the Board of Directors proposals in regard and directly
supervises, in close collaboration with the Board of Auditors, the correct application of the
rules on the remuneration of those responsible for internal control functions;
• drafts the documentation to be submitted to the Board of Directors for its decisions;
• collaborates with other committees within the Board of Directors and in particular with the
Risk Committee;
• ensures the involvement of all competent company functions in the process of preparing
and monitoring remuneration and incentive policies and practices;
• provides an opinion, making use of the information received by the competent company
functions, on the achievement of performance objectives which are linked to the incentive
plans and on the ascertainment of other conditions for the payment of remuneration;
• provides appropriate feedback on the activities carried out to the corporate bodies,
including the General Meeting.
It is also appropriate that the Risk Manager take part in the meetings of the Remuneration
Committee in particular to ensure that the incentive systems are properly adjusted to take account
62
of all the risks assumed by the bank, according to methods consistent with those that the Bank
adopts for risk management.
The meetings of the Remuneration Committee are not attended by any Directors if proposals are
formulated to the Board of Directors regarding their remuneration.
The Remuneration Committee shall annually present its budget and, in an emergency, may
request the support of Executive Directors for related expenses.
The Committee, during the meeting held February 16, 2016, presented to the Board for the year
2016, a budget of Euro 50,000, which was approved by the Board of Directors during the
meeting held February 18, 2016.
The Remuneration Committee has access to all information and company units necessary to carry
out its assignment, and the opportunity of hiring external consultants, if necessary.
Lastly, it is noted that the meetings of each Committee may be attended by non-members,
including other members of the Board or Company structure, at the invitation of the Committee,
with reference to individual items on the agenda.
Directors ’ Remuneration
The Shareholders Meeting of Banca Mediolanum S.p.A. on May 20, 2015, having examined the
report prepared by the then parent and bank holding company Mediolanum S.p.A. and approved
by the General Meeting of the latter on March 26, 2015 - in accordance with supervisory
provisions for banks concerning remuneration and incentive policies and practices, Bank of Italy
Circular no. 285 of December 17, 2013, 7th update of November 18, 2014, as well as in
accordance with the provisions of the Issuers’ Regulations (“IR”) and the Consolidated Finance
63
Act (“CFA”) - approved the document on the Group’s remuneration policies.
In detail, the document in question defines a group remuneration policy that is in line with the
characteristics of the latter and all its components.
Subsequently, the General Meeting of Banca Mediolanum - according to current Supervisory
Provisions of the Bank of Italy (Circular no. 285, 7th update of November 18, 2014) - on
September 23, 2015, also approved the criteria for determining the remuneration to be granted in
case of early termination of the employment contract or early termination of office, including the
limits set for said remuneration in terms of annuities of the fixed remuneration and the maximum
amount deriving from their application.
As for the Group’s remuneration policy for the year 2015, the merged parent company
Mediolanum S.p.A. updated the remuneration policies and initiated the review of the Group
incentive systems with the aim of promptly achieving the structure required by regulations
recently issued also in consideration of organizational changes within the Group and in light of
the provisions of the transitional regulation laid down by the supervisory provisions for banks.
The main amendments introduced, or being introduced, in the new 2015 remuneration policies
are summarized as follows:
• definition of the new scope of “key personnel” in accordance with the requirements of the Bank
of Italy and the new criteria of the European Banking Authority (EBA) published in the EU
Official Journal on June 6, 2014;
• revision of the principles relating to the deferral and strengthening systems of retention criteria;
• initiation of the overall review of the remuneration systems for the sales network;
• initiation of procedures to amend the By-laws in relation to the powers of the General Meeting,
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with regard to severance payments and variable remuneration limits.
With reference to the process for identifying key personnel, with the adjustment to the current
regulatory framework, Mediolanum S.p.A. defined, starting 2015, a new process for identifying
key personnel. The process involves all employees, directors of the Group, including overseas
offices and the Sales Network.
From the analysis conducted, with reference to the different categories of persons, a higher total
number of persons was identified with respect to the previously identified persons.
The next update of the Group Remuneration Policies will be made available following approval
of the aforementioned report for 2015 by the General Meeting of Banca Mediolanum S.p.A.
called to approve the 2015 financial statements.
This report is published on the Company’s website (www.bancamediolanum.it in the Corporate
section under General Meeting).
Control System
Below is a description of the current control system in force that is completed by Annex 1) to this
report and concerning the “Main characteristics of the risk management and internal control
systems in relation to the financial reporting process” prepared pursuant to art. 123-bis,
paragraph 2, lett. b), CFA.
The internal Control System is organized according to different levels that involve:
• line controls (so-called “ first-level controls”): aimed at ensuring the correct conduct of
transactions. Said controls are carried out by the operating structures (ex. hierarchical, systematic
and random), also through dedicated units exclusively for control tasks that report to the
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managers of the operating structures (or executed as part of back office) and, when possible, are
incorporated in IT procedures. According to this configuration, the operating structures are the
first responsible for the risk management process. In daily operations, these structures are in fact
required to identify, measure or assess, monitor, mitigate and report the risks arising from
ordinary company activities in accordance with the risk management process. In addition, these
structures must respect the operating limits assigned to them consistent with the risk objectives
and procedures which make up the risk management process;
• controls on risks and compliance (so-called “second-level controls” ): aimed at ensuring
compliance with the operating limits assigned to the various functions, the correct
implementation of the risk management process and compliance of business operations according
with norms, including self-regulation. As required by law, the functions responsible for the
second-level controls are separate from production functions. Specifically, said functions are:
o Risk Management;
o Legal & Compliance;
• internal audit (so-called “third-level controls”): aimed at identifying, at set deadlines
depending on the nature and intensity of the risks, violations of procedures and regulations, and
to periodically assess the completeness, adequacy, functionality (in terms of efficiency and
effectiveness) and reliability of the Internal Control System and information systems (ICT audit).
The assumption of a complete and functional internal control system is the existence of an
adequate business organization to ensure the sound and prudent management of banks and
compliance with their applicable provisions. In particular, the following general organization
principles are provided:
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• decision-making processes and the assignment of functions to personnel are formalized and
allow the unambiguous identification of duties and responsibilities and are appropriate to prevent
conflicts of interest. In this context, the necessary separation between operational and control
functions must be ensured;
• the human resources management policies and procedures ensure that personnel is provided
with the skills and professionalism necessary for the exercise of the responsibilities attributed;
• the risk management process is effectively integrated. The following are considered integration
parameters, provided by way of example and not limited to: the dissemination of a common
language in risk management at all levels of the bank; the adoption of detection and measurement
methods and tools consistent with each other (ex., a single taxonomy of processes and a single
risk map); the definition of risk reporting models, in order to facilitate the understanding and
proper assessment, even in an integrated logic; the identification of formalized moments of
coordination for the planning of respective activities; the provision of information flows on an
ongoing basis between the various functions in relation to the results of monitoring activities
pertaining to them; sharing in the identification of remedial actions;
• assessment processes and methodologies, also for accounting purposes, of company activities
are reliable and integrated with the risk management process. To this end: the definition and
validation of the assessment methods are entrusted to different units; the assessment
methodologies are robust, tested under stress scenarios and do not over-rely on a single source of
information; the valuation of a financial instrument is entrusted to an independent unit with
respect to the one negotiating said instrument;
• operating and control procedures minimize the risks of fraud or employee dishonesty; prevent
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or, where it is not possible, mitigate potential conflicts of interest; prevent the involvement, even
unconsciously, in money laundering, usury or terrorist financing;
• business continuity levels are guaranteed, adequate and comply with the provisions of the
supervisory provisions in force.
On September 23, 2015, the Board of Directors of the Company decided, with effect from the
date of the start of trading of the Shares on the MTA, to appoint Luigi Del Fabbro as Director
Responsible for the Internal Control and Risk Management System as required by the
Corporate Governance Code.
The Appointed Director, assisting the Chief Executive Officer:
• identifies the main company risks, taking into account the characteristics of the activities
performed by the issuer and its subsidiaries and periodically submits them to the Board of
Directors;
• initiate the guidelines defined by the Board of Directors, managing the planning,
implementation and management of the Internal Control and Risk Management System and
continuously verifying the overall suitability, efficacy and efficiency;
• deals with the adaptation of said system to the dynamics of operating conditions and the
legislative and regulatory context;
• can request the Internal Audit function to perform verifications on specific areas of
operation and compliance with internal rules and procedures in the execution of company
operations, with simultaneous notification to the Chairman of the Board of Directors, the
Chairman of the Risk Committee and the Chairman of the Board of Statutory Auditors;
• timely reports to the Risk Committee (or to the Board of Directors in cases of urgency) on
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issues and concerns raised in the course of its business or of which it became aware so that the
Committee (or the Board) can take appropriate action.
With reference to the Internal Audit Function Manager in accordance with art. 7 of the
Corporate Governance Code, the Board of Directors, upon proposal of the Risk Committee
members, after consulting with the Director Responsible for the Internal Control and Risk
Management System and the Board of Auditors - in the meeting of September 23, 2015 and
effective as of the beginning of trading of the Company’s Shares on the MTA - confirmed
Massimo Rotondi, already the Internal Audit Manager of Mediolanum S.p.A..
The Internal Audit Manager, in addition to the functions assigned under the sectoral legislation
applicable to banks, is assigned the following tasks in accordance with the Corporate Governance
Code:
• assist the Director Responsible for the Internal Control and Risk Management System in
identifying the main business risks for consideration by the Board of Directors, and in
implementing the guidelines of the Board of Directors regarding the Internal Control and
Risk Management System through the planning, implementation, management and
monitoring of said system;
• verify, both on an ongoing basis and in relation to specific requirements and in
accordance with the international standards, the performance and suitability of the Internal
Control and Risk Management System, using an audit plan approved by the Board of
Directors and based on a structured process of analysis of the main risks that are
consequently ordered according to priority;
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• prepare periodic reports containing adequate information regarding its activities, ways in
which risk management is conducted, as well as compliance with the plans defined for
their reduction. The periodic reports contain an assessment of the suitability of the
Internal Control and Risk Management System;
• prepare timely reports on events of major importance;
• submit these reports to the Chairpersons of the Board of Statutory Auditors, the Risk
Committee and the Board of Directors as well as the Director in charge of the Internal
Control and Risk Management System;
• verify, as part of the audit plan, the reliability of information systems including
accounting systems.
The Internal Audit Manager is not responsible for any operational area and has direct access to all
the information needed to carry out his duties; for the main functions, he will report to the Board
of Directors, the Risk Committee and the Board of Auditors.
As part of the Internal Control System, a significant role is assumed by the Legal & Compliance
and Risk Management Functions, which are assigned, each for profiles of their responsibility, the
responsibility of monitoring exposure to financial and credit risks, as well as assessing the
impacts of operational, legal and reputational risks, constantly controlling the capital adequacy in
relation to the activities carried out.
Moreover, the Legal & Compliance Function oversees the evolution of the legal and regulatory
framework governing the activities of the sector and assesses the impacts thereof on business
operations in order to ensure compliance, overseeing the execution of the adequacy verifications
of the oversight defined for the prevention of the risk of non-compliance with regulations.
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Also as part of the second level controls, at the Legal & Compliance Function an equally
important role is covered by the Network Inspectorate function in the specific activity of
controlling operational risks and risks of non-compliance of the Sales Network. The Legal &
Compliance Function also oversees the anti-money laundering and anti-terrorism legislation.
The Legal & Compliance Function provides its services also in outsourcing on behalf of other
Italian companies of the Group.
Specific Risk Management Functions are also present at the main subsidiaries (Mediolanum
Gestione Fondi, Mediolanum International Funds) in order to ensure greater proximity to the
business, maintaining at the parent company a role of guidance and coordination.
- Legal & Compliance Function
The Legal & Compliance Function oversees the management of non-compliance risks, according
to a risk-based approach, with regard to all corporate activities, using, for oversight of certain
regulatory areas for which there are forms of specialized oversight, specialist units specifically
identified in the Group’s Compliance Policy, which are attributed certain stages of the
compliance process.
In addition to overseeing the regulatory framework, the Function is responsible for specialist
consulting, regulatory alert and gap analysis, verification of adequacy of company structures and
processes with respect to the existing regulatory framework and identification of actions to
mitigate non-compliance risks.
At the Legal & Compliance Function, the Network Inspectorate Function and the Anti-Money
Laundering Office also operate.
Taking into account the business model of the Bank, particular attention is given to the control
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activities of the operations of the Network of Financial Advisors, of which the Bank avails itself.
Control of the activities of the Sales Network is, in fact, a fundamental element of the Internal
Control System, which is carried out in particular by the Network Inspectorate Function, present
since the establishment of the Bank.
This Function carries out its verification activities on the operations of the sales network. These
activities are carried out either by using appropriate analytical tools remotely, or through on-site
verifications and inspections at the Sales Network, in order to prevent possible misappropriations
and any prejudicial cases. The Network Inspectorate Function recognizes and assesses, through
special internally developed indicators and shared with the Internal Audit, Legal & Compliance
and Risk Management Functions, potential operational, legal and reputational risks arising from
the operations of the Sales Network, reporting any potentially misconduct and promoting
disciplinary actions from formal warning up to proposed revocation of office.
As part of its activities, the Network Inspectorate Function avails itself of the collaboration of the
Litigation and Credit Recovery Division with particular reference to the management of disputes
with customers relating to cases of infidelity and for the execution of legal actions (ex.
submission of complaints, claims, etc.). This also includes a synergy arising from the systematic
exchange of information (particularly in the management of litigation) useful to detect ex ante
any anomalies in the operations of the Sales Network.
Finally, the Anti-Money Laundering Office carries out functional activities aimed at monitoring
continuously or per event the situation of compliance with external regulations, providing an
assessment of the state of compliance on the basis of the analyzes and checks carried out, also by
means of remote monitoring techniques, and information flows received from other Corporate
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Functions.
- Risk Management Function
The Risk Management Function (alternatively risk control function) is responsible for the
implementation of governance policies and the risk management system and collaborates in the
definition and implementation of the RAF, ensuring, in the exercise of the control function, an
integrated view of the various riskiness of the Corporate Bodies.
To this end, the Risk Management Function of Banca Mediolanum:
� is involved in the definition of the RAF, risk governance policies and the various phases that
make up the risk process as well as in setting operational limits upon assumption of various types
of risk;
� verifies the adequacy of the RAF;
� continuously verifies the adequacy of the risk management process and operational limits;
� defines common assessment metrics of operational risks consistent with the RAF, in
coordination with the regulatory compliance function, the ICT function and the business
continuity function;
� defines the methods of assessment and control of reputational risk, in coordination with the
regulatory compliance function and the most exposed business functions;
� assists the corporate bodies in the assessment of strategic risk monitoring the significant
variables;
� ensures consistency of the risk measurement and control systems with the assessment
processes and methodologies of business activities, in coordination with the company structures
concerned;
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� develops and applies indicators to highlight situations of anomaly and inefficiency of risk
measurement and control systems;
� analyses the risks of new products and services and those deriving from the entry into new
operating and market segments;
� provides preventive advice on the consistency of the RAF of the most significant transactions
possibly acquiring, depending on the nature of the transaction, the opinion of other functions
involved in the risk management process;
� constantly monitors the actual risk assumed by the bank and its consistency with risk
objectives and compliance with the operating limits assigned to the operating structures in
relation to the assumption of various types of risk;
� verifies the correct conduct of the performance monitoring on individual credit exposures;
� verifies the adequacy and effectiveness of measures taken to remedy any deficiencies in the
risk management process.
Internal Audit Function
The Internal Audit Function aims, on the one hand, to monitor, from the perspective of third-level
monitoring, also with on-site verifications, the regular performance of operations and evolution
of risks and, on the other hand, to assess the completeness, adequacy, functionality and reliability
of the organizational structure and other components of the internal control system, bringing to
the attention of the corporate bodies possible improvements, with particular reference to the RAF,
the risk management process and measurement and control tools. Based on the results of its
controls, it makes recommendations to the corporate bodies.
In this context, the Function:
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• annually submits to the corporate bodies an audit plan, with details of the planned monitoring
activities, considering the risks of the various activities and business structures; the plan contains
a specific section on the audit activities of the information system (ICT auditing);
• assesses the completeness, adequacy, functionality, reliability of the various components of the
internal control system, the risk management and other company processes, also having regard to
the ability to identify errors and irregularities. In this context, it assesses the risk control and
regulatory compliance company functions; the scheme and processes related to the RAF and the
risk management process;
• also verifies:
o regularity of various business activities, and the effectiveness of internal operating and
control procedures including those outsourced, and the evolution of risks;
o monitoring of compliance with the standards of the activities of all company levels;
o respect, in the various operating sectors, of the limits set by the approval mechanisms and
the full and correct use of the information available in the various activities;
o the adequacy and proper functioning of processes and methodologies for assessing
company activities and in particular financial instruments;
o the adequacy, overall reliability and security of the information system (ICT audit);
o the removal of anomalies detected in operations and in the functioning of controls
(“follow-up” activities);
o the business continuity plan;
• periodically reports to the corporate bodies on the completeness, adequacy, functionality and
reliability of the internal control system. Also promptly informs the same of any violations or
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significant deficiency.
Finally, it is stated that, in respect of mutual independence and respective roles, the company
control functions work together and with other functions (ex., legal, organization, safety function)
in order to develop their own methodologies and control activities in a manner consistent with
business strategies and operations. In this regard, specific information flows are provided
between company control functions on the results of the respective activities carried out.
Risk Committee
On September 23, 2015, the Issuer’s Board of Directors resolved, with effect from the date of
commencement of trading of the Ordinary Shares of the Company on the MTA, the
implementation of the functions attributed to the Risk Committee - already in the Bank as the
Internal Control and Risk Committee - in accordance with as stated in point 7.C.2 of the
Corporate Governance Code and in Bank of Italy Circular no. 285/2013 (Part I, Tit. IV, Ch. 1,
Sect. IV).
The Risk Committee is understood, from the above regulations, as a moment of synthesis and
coordination of functions involved in the risk control and management system, with particular
regard to all instrumental activities needed for the Board of Directors to reach a correct and
effective determination of the RAF (“risk appetite framework”) and risk management policies.
The Risk Committee, in particular, performs functions supporting the Board of Directors:
• in the definition and adoption of the strategic guidelines and risk management
policies. As part of the RAF, the committee performs the assessments and
proposals necessary so that the Board of Directors, as required by Circular 285,
Part I, Tit. IV, Ch. 3, can define and approve the risk objectives (“Risk appetite”),
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and tolerance threshold (“Risk tolerance”); the Committee also expresses opinions
on specific aspects regarding identification of the main business risks;
• in the verification of the correct implementation of the strategies, risk management
policies and RAF; and
• in the definition of policies and processes for the assessment of company
activities, including verification that the price and conditions of transactions with
customers are consistent with the business model and strategies concerning risks;
• identifies and proposes, with the contribution of the Appointments Committee, the
managers of the corporate control functions to be appointed;
• verifies that the company control functions conform properly to the indications
and guidelines of the Board of Directors and assist the latter in drafting the
coordination document required by Bank of Italy Circular no. 285/2013, Part I,
Tit. IV, Ch. 3;
• evaluates the correct use of accounting standards for the preparation of the annual
and consolidated financial statements and, in the case of groups, their consistency
for the purpose of preparing the consolidated financial statements; to that end, it
coordinates with the Financial Reporting Manager, with the Statutory Auditor and
the Board of Auditors;
• monitors the independence, adequacy, effectiveness and efficiency of the Internal
Audit function;
• examines in advance the programs of activities (including the audit plan) and
annual reports of company control functions addressed to the Board of Directors,
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and periodic reports relating to the evaluation of the Internal Control and Risk
Management System and those of particular importance prepared by the Internal
Audit function;
• expresses assessments and submits opinions to the Board of Directors on
compliance with the principles according to which the internal control system and
the company organization should be standardized and the requirements that must
be respected by the company control functions, bringing to the attention of the
same any point of weakness and resulting corrective actions to be promoted; to
this end, it evaluates the proposals of the body with the management function;
• contributes, through assessments and opinions, to the definition of the company’s
policy of outsourcing company control functions;
• can request that the Internal Audit function carry out checks on specific
operational areas giving immediate notice to the Chairperson of the Board of
Statutory Auditors;
• supports, with adequate investigations, evaluations and decisions of the Board of
Directors relating to the management of risks arising out of prejudicial acts, which
the Board of Directors has become aware of;
• without prejudice to the responsibilities of the Remuneration Committee,
ascertains that the incentives underlying the remuneration and incentive system of
the Bank are consistent with the RAF;
• exchanges with Board of Auditors all information of mutual interest and, where
appropriate, coordinate to perform respective tasks;
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• also identifies all additional information flows that must be addressed to it in terms
of risk (subject, format, frequency, etc.) and must have access to relevant business
information;
• reports to the Board of Auditors at least twice a year, on the occasion of the
approval of annual and interim financial reports, on the activities carried out and
on the adequacy of the Internal Control and Risk Management System.
The Risk Committee uses external experts and - where necessary - converses directly with
the internal audit, risk control and regulatory compliance functions, and at least one
member of the Board of Statutory Auditors takes part in its work.
The Risk Committee, in the performance of its functions, coordinates with the Board of
Auditors.
Annually, the Risk Committee shall present its annual budget and, in an emergency, may be
assisted by Executive Directors for related expenses.
The Committee, during the meeting held January 20, 2016, presented to the Board for the year
2016 a budget of Euro 50,000, which was approved by the Board of Directors during the meeting
held January 21, 2016.
The Risk Committee also has access to all information and company units necessary to carry out
its assignment, and the opportunity of hiring external consultants, if necessary.
The Committee is composed as follows:
- Bruno Bianchi (independent pursuant to CFA and pursuant to “Code”) – Chairman of the
Committee;
- Paolo Gualtieri (independent pursuant to CFA and pursuant to “Code”);
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- Antonio Maria Penna (non-executive);
all experts in accounting and finance.
In compliance with the Corporate Governance Code for listed companies, the Committee consists
in the totality of non-executive Directors and majority of Independent Directors and
Chairmanship is entrusted to an independent member.
The Risk Committee (formerly the Internal Control and Risk Committee) met 9 times in 2015
(average duration: 1 hour 43 minutes).
Currently, 11 meetings are scheduled for 2016.
Persons identified under the Regulation on transactions with related parties (adopted by
Consob with resolution no. 17221 of March 12, 2010 and subsequently amended by resolution
no. 17389 of June 23, 2010) and Circular no. 263 of the Bank of Italy of December 27, 2006
and subsequent updates.
Under article 4, paragraph 3 of Consob Regulation no. 17221 of March 12, 2010 as amended by
resolution no. 17389 of June 23, 2010 and the provisions of Bank of Italy Circular no. 263 of
December 27, 2006, 9th update of December 12, 2011, Title V, Chapter 5, some of the
resolutions on related parties are subject to a prior “favorable opinion of a committee, also
specially formed, composed exclusively of independent directors” and it is therefore essential to
identify said directors.
Considering the provisions in question and the provisions of the procedures adopted by the
Company by the Board of Directors of September 23, 2015, the Independent Directors:
- Paolo Gualtieri;
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- Bruno Bianchi;
- Angelo Renoldi;
have the task of expressing, if necessary, the prior opinion referred to in the above legislation.
Head of Corporate Financial Reporting
On September 23, 2015, the Board of Directors of the Company approved, with effect from the
date of the start of trading of the Shares on the MTA, in compliance with the provisions of art.
154-bis of the Consolidated Finance Act, the appointment of Luigi Del Fabbro - after verification
of the existence of the inherent requirements and the favorable opinion of the Board of Statutory
Auditors - as the Financial Reporting Manager conferring the necessary powers.
Mr. Del Fabbro has held the same post in the merged company Mediolanum S.p.A. and this
confirmation expresses continuity in the management of important areas of activity with respect
to the market and the Group’s stakeholders.
For the conduct of the role, the Financial Reporting Manager may act without mandate limits,
operating with full decision-making autonomy within the budget that he will prepare annually
and submit for approval to the Board of Directors, except in cases of urgency. All within the
context of existing procedures in the company, however without the latter constituting limitation
to the effectiveness of the delegation.
In an indicative and not exhaustive manner, the Financial Reporting Manager is conferred the
following rights and powers:
- the right to organize an adequate structure for quantity and professionalism of resources
as part of its activities;
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- the capability of independent spending, as part of the annual budget to be submitted for
approval by the Board of Directors, except in cases of urgency;
- the right to use the resources of information systems and management control as well as
the right to use the Internal Audit function for the purpose of verifying the adequacy of
the procedures and effective application of controls;
- the free access to all the information deemed relevant for the performance of his duties,
both within the company and within the other companies of the Mediolanum Group;
- participation in Board of Directors’ meetings with particular attention to the meetings that
deal with issues relevant to the activity of the Reporting Manager;
- the right to communicate with any administrative and control body of the Mediolanum
Group;
- the right to approve corporate procedures that have an impact on the formation of the
documents subject to certification, as well as direct participation in the planning of related
information systems.
Supervisory Body established pursuant to Legislative Decree 231/2001
As part of the overall Internal Control System, the Supervisory Body, pursuant to Legislative
Decree 231/2001 monitors the functioning and compliance of the organizational and management
models adopted at corporate level to prevent the offences included in the scope defined by
Legislative Decree 231/2001 and subsequent updates. It refers and reports to the Board of
Directors, the Risk Committee and the Board of Auditors on its activities and on the situation of
the Bank, with reference to the obligations set forth in Legislative Decree 231/2001.
Said Board of Auditors is composed of the following:
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- Angelo Renoldi (Independent Director pursuant to CFA and “Code”) with the qualification of
Chairman;
- Ettore Parlato Spadafora (Legal & Compliance Manager);
- Massimo Rotondi (Audit Manager);
- Roberto Brega (Compliance and Anti-Money Laundering Office Manager);
which were confirmed by the Board of Directors on March 19, 2015 as members of the
Supervisory Body until approval of the 2017 financial statements.
The Supervisory Body is entrusted with the task of supervising:
• the effective ability of the Models to prevent the commission of offences covered by the
Decree; in this respect, it must:
- conduct recognition of the business in order to update the mapping of “sensitive” areas of
activities as part of the business context, through:
� the analysis of the extension of offences envisaged by the Decree;
� verification of the change in company operations;
- verify the effective ability of the Models to prevent the commission of offences covered by
the Decree, through:
� evaluation of the adequacy of the Internal Control System for the prevention of offences;
� evaluation of the adequacy of the provisions contained in the code of ethics;
� evaluation of the adequacy of the disciplinary system defined with respect to employees,
managers, Directors and the Sales Network, contract workers, consultants and other external
parties;
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- verify the adequacy of organizational solutions adopted for the implementation of the
Models, through the verification and regular monitoring of the organizational arrangements
laid down with respect to the areas/operations at risk identified in the Models;
• compliance with the requirements of the Models for the recipients, which involves the
verification of consistency between actual conduct and the Models defined; in this respect, it
must:
- promote, in coordination with the competent corporate functions, suitable initiatives for the
dissemination of knowledge and understanding of the Models, through:
� the preparation of a periodic training plan aimed at promoting awareness of the
principles contained in the code of ethics, differentiated according to the role and responsibilities
of the recipients;
� the dissemination and verification in the corporate context of knowledge and
understanding of the Models;
� the dissemination of knowledge of the code of ethics on the part of the Sales Network,
contract workers and external professionals;
- - define and update the list of information that must be submitted or made available to the
Body;
- - define the methods of submission and management of information flows to the Body;
- - carry out period checks on operation in “sensitive” areas of activity;
- - conduct internal investigations to ascertain alleged violations of the requirements of the
Models both of initiative and following reports;
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• updating of the Models, where there is a need to adapt in response to changing business
conditions. In this regard, however, it should be noted that the Body is responsible for making
proposals for adaptation to the Corporate Bodies able to ensure their concrete implementation and
monitor the follow-up, in order to verify the implementation and effective functionality of the
proposed solutions. In this regard, the Body must:
- - on the basis of the findings from the audit and control activities, periodically express an
opinion on the adequacy of the Models with respect to the requirements of the Decree and
reference principles, as well as on the operation of the same;
- - periodically submit to the Administrative Body proposals for adaptation of the Models to
the desired situation and the actions necessary for the concrete implementation of the
organizational, management and control Models desired (completion of procedures, adoption
of standard contractual clauses, etc.);
- - periodically verify the implementation and actual functionality of the solutions/corrective
actions proposed.
The Supervisory Body met 7 times in 2015.
Coordination between the parties involved in the Internal Control and Risk Management
System
On September 23, 2015, the Board of Directors approved, inter alia, the adoption of the
document entitled “Guidelines of Group Coordination between Bodies and Control Functions”
prepared in implementation of the supervisory provisions of the 11th update of Circular no. 285
of the Bank of Italy, which describes the procedures for coordination and collaboration adopted
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by Banca Mediolanum and by the Banking Group, in the exercise of the tasks that ensure the
proper functioning of the Internal Control System.
Shareholder relations
On September 23, 2015, the Board of Directors appointed, with effect from the start of trading of
the ordinary shares on the MTA organized and managed by Borsa Italiana S.p.A., Alessandra
Lanzone as Investor Relator, who held the same post in the merged company Mediolanum S.p.A.
This confirmation expresses continuity in the management of important areas of activity with
respect to the market and the Group’s stakeholders. As previously done, the Investor Relations
Function is responsible, among other things, for maintaining relations with institutional investors;
it contributes to fulfill the communication obligations to the market, in the presence of privileged
information, in full compliance with current legislation.
The management of relationships with all shareholders other than institutional ones, in particular
with regard to corporate information, is delegated to the Corporate Affairs Division.
With reference to the management of the General Meetings, the action of the Board of Directors
responds to the goal of maximizing member participation and facilitating the exercise of
shareholders’ rights also encouraging the use of the General Meetings to provide shareholders
with information on the company.
A special section of the Company’s website (www.bancamediolanum.it) was set up – which, it is
recalled, is now the subject of primary and secondary regulatory provisions – in continuous
implementation, easily identifiable and accessible, which provides relevant corporate
information.
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In special sections, relevant corporate documents are also published such as the Company By-
laws, the press releases already published and the Corporate Governance Report.
Dividend Policy
Banca Mediolanum intends to continue the dividend distribution policy applied hitherto by
Mediolanum S.p.A., which provides, in steadily positive economic trend, the interim distribution
of part of the same during the year.
Board of Auditors
The Issuer’s Board of Statutory Auditors - appointed by the General Meeting of March 19, 2015,
according to the statutory provisions then in force, whose mandate expires with the General
Meeting approving the financial statements ended December 31, 2017 - is composed as follows:
- Mauri Arnaldo - Chairman of the Board of Auditors
- Angeli Adriano Alberto - Regular Auditor
- Giuliani Marco - Regular Auditor
- Meneghel Francesca - Alternate Auditor
- Orrù Gianluca - Alternate Auditor
The statutory norms that regulate the appointment and replacement of the Directors are contained
in art. 27 of the By-laws and outlined below:
- article 27)
1. The ordinary General Meeting shall elect the Board of Auditors, consisting of three
regulator auditors and three alternate auditors, who shall hold office for three years and expire
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at the General Meeting called to approve the financial statements for the third year of the term of
office and may be reappointed.
All auditors must be registered with the Register of statutory auditors and auditing firms
established under law and have performed the statutory auditing of accounts for a period not less
than three years.
The auditors must also possess the requirements of the provisions of law and regulations in force
and the Board of Directors shall ascertain their validity.
Statutory Auditors shall be responsible for all the tasks and powers provided by the primary and
secondary legislation in force pro tempore, including the obligation to promptly inform the Bank
of Italy and Consob of all acts or facts it may acquire in the exercise of its duties that may
constitute an irregularity in the management of the banks or a violation of the rules governing
banking activities.
For these purposes, the auditors, even individually, can proceed to inspection acts or formal
requests to any office of the Company on any matters concerning the Company’s business.
2. Auditors are appointed on the basis of lists submitted by shareholders, with the procedure
provided below. Each list shall consist of two sections: one for candidates for the office of
Statutory Auditor and the other for candidates for the office of Alternate Auditor. In these lists,
candidates are listed in progressive number. Each candidate may appear on only one list under
penalty of ineligibility.
Each list must indicate at least one regular auditor and one alternate auditor. In order to ensure
gender balance in accordance with primary and secondary legislation in force pro tempore, each
list containing a total number of candidates equal to or greater than three shall provide for the
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presence of candidates of both genders, so that at least one candidate for the office of regular
Auditor and one for the office of alternate auditor belongs to the less represented gender.
3. Shareholders having the right to vote who, alone or together with other shareholders,
represent at least the percentage of share capital set by the National Commission for Companies
and Stock Exchange are entitled to submit lists.
The ownership of the percentage of share capital is determined with regard to the shares
registered in favor of the shareholders on the day when the list is filed at the Company, with
reference to the share capital subscribed at that date.
The related declaration can be communicated also after the filing of the list provided the
Company receives it by the deadline for publication of the lists by the Company.
The Company allows shareholders who intend to submit lists to proceed with filing through at
least one means of remote communication, in the manner which shall be disclosed in the
convocation notice of the General Meeting and which allows the identification of shareholders
who shall proceed with filing.
The shareholding portion required for the submission of lists of candidates for the election of the
Board of Auditors shall be indicated in the convocation notice of the meeting called to approve
the appointment of said body.
A shareholder may not submit or vote for more than one list, even through a third party or
through trust companies. Shareholders belonging to the same group - intended as the parent
company, subsidiaries and companies under joint control - and shareholders who are parties to a
shareholders’ agreement pursuant to article 122 of Legislative Decree no. 58/1998 regarding
issuer’s shares may not submit or vote on more than one list, even through a third party or trust
89
companies.
4. Lists are filed at the Company within the twenty-fifth day before the date of the meeting called
on first or second call to resolve on the appointment of the members of the Board of Auditors and
made available to the public at the registered office, on the website and other manner prescribed
by the National Commission for Companies and the Stock Exchange with regulation at least
twenty-one days prior to the Meeting.
The lists contain:
a) information regarding the identity of the shareholders who submitted the lists, indicating
the percentage of shares held;
b) a declaration by shareholders other than those holding, even jointly, a controlling or
relative majority shareholding, certifying the absence or existence of any connection with the
latter, in accordance with the provisions of article 148 of Legislative Decree no. 58/1998 and
article 144-quinquies, first paragraph, Consob Resolution no. 11971/1999 (hereinafter also the
“Issuers’ Regulation”);
c) exhaustive information on the personal and professional characteristics of the candidates,
a statement by the candidates attesting that they meet statutory requirements and as provided in
these By-laws and accept the appointment.
Those who hold administration and control offices in excess of the limits established by the
primary and secondary legislation in force pro tempore may not be elected as auditors.
5. If at the date of expiry of the term of twenty-five days before the date set for the Meeting on
first or second call to resolve on the appointment of auditors, only one list has been submitted, or
only lists submitted by shareholders associated under article 144-quinquies Issuers’ Regulation,
90
lists may be submitted until the third day following said date. In this case, the threshold referred
to in paragraph 3 above is reduced by half.
6. The lists presented without compliance with the foregoing provisions shall not be submitted for
voting.
7. The Chairperson of the General Meeting, before opening the vote, shall refer to any
declarations referred to in letter b) above, and require Meeting participants who have not filed
or participated in filing of lists to declare any relations as defined above.
If an individual who is connected to one or more reference shareholders has voted for a minority
list, the existence of said relation shall only become relevant if the vote was crucial for the
election of the auditor.
8. The auditors shall be elected as follows:
a) two Regular Auditors and two Alternate Auditors shall be selected, in the progressive
order in which they are indicated in the sections of the list, from the list that obtained the most
votes;
b) a regular auditor and an alternate auditor are chosen, based on the progressive order in
which they appear in the list sections, from the second list that obtained the most votes at the
Meeting and that, pursuant to the first and secondary legislation in force pro tempore, is not
associated, even indirectly, with the shareholders who submitted or voted on the list that obtained
the most votes.
If several lists have obtained the same number of votes, a new vote is held between these lists and
the candidates are elected from the list that will obtain a simple majority of votes.
If following the vote and operations above the composition of the Board of Auditors for matters
91
relating to regular auditors does not comply with the primary and secondary legislation in force
pro tempore concerning gender balance, there will be the necessary replacements, according to
the progressive order in which candidates are listed in the list that obtained the most votes.
9. The Chairperson of the Board of Auditors shall be the candidate at the top of the section
of the candidates for the office of regular auditor of the list referred to in letter b) of the
preceding paragraph.
10. If only one list has been submitted, the General Meeting shall vote on it; if the list obtains
the majority required by article 2368 et seq. of the Civil Code, the three candidates indicated in
progressive order in the related section shall be elected as statutory auditors and the three
candidates indicated in progressive order in the related section as alternate members; the
Chairperson of the Board of Auditors shall be the person indicated at the top of the section of
candidates for the office of auditor in the list submitted.
11. In the absence of lists, and if through the voting mechanism by list the number of
candidates elected is less than the number established by these Articles of Association, the Board
of Auditors shall respectively be appointed or integrated by the Meeting with the majorities
required by law and in compliance with the provisions from time to time applicable regarding
gender balance.
12. In case of replacement of an auditor, an alternate auditor shall take over belonging to the
same list as the outgoing auditor, provided compliance with the provisions applicable from time
to time with regard to gender balance; if this is not the case, there will be, in order, a shift of
people from the same list and, alternatively, to any additional lists on the basis of votes received.
When the General Meeting is required to appoint regular and/or alternate auditors in order to
92
complete the number of the members of the Board of Auditors it shall proceed, in compliance
with the provisions applicable from time to time regarding gender balance, as follows: if auditors
elected in the majority list need replacing, the appointment shall take place by a simple majority
vote without any list constraints; if, on the other hand, minority auditors are to be replaced, the
General Meeting replaces them with a simple majority vote, choosing them from the candidates
indicated in the same list as that in which the replaced candidate was listed, or from the minority
list that has obtained the second largest number of votes.
In the absence of candidates of minority lists and if the provisions from time to time applicable
regarding gender balance are not complied with, the appointment shall be by voting one or more
lists, made up of a number of candidates not exceeding those to be elected, presented before the
General Meeting in compliance with the provisions contained in this article for appointment of
the Board of Auditors, provided that no lists may be submitted (and if submitted will be void) by
reference shareholders and members connected to them, as defined by the current laws and
regulations. The candidates included in the list that received the most votes shall be elected.
In the absence of lists submitted in observance of the above and in compliance with the
provisions applicable from time to time with regard to gender balance, the appointment shall be
by relative majority vote without list constraints.
13. In all cases of substitution of the Chairperson, the incoming Auditor shall also take the
office of Chairperson of the Board of Auditors.
14. The General Meeting shall determine the remuneration of the auditors, plus
reimbursement of expenses incurred in carrying out their duties.
15. The powers and duties of auditors are those established by primary and secondary
93
legislation in force pro tempore.
16. The meetings of the Board of Auditors may also be held by means of telecommunication,
provided that all participants can be identified and such identification is recorded in the minutes
and are able to follow the discussion and intervene in real time on the matters addressed,
exchanging documentation if required; in this case, the meeting of the Board of Auditors is
considered held at the place where the chairperson of the meeting is.
Lastly, it is noted that on September 23, 2015, the Board of Directors confirmed the application
also to the members of the Board of Auditors of the independence criteria laid down for Directors
by the Corporate Governance Code of listed companies pursuant to art. 3. The Board of Directors
- in that meeting - reported the existence of said requirements as a result of the examination of the
disclosure statements made by members of the Board of Auditors.
Also in this case - as was done for two Directors - the Board, with a view to the prevalence of
substance over form, accepted the existence of the independence requirement for the Auditors
Arnaldo Mauri and Adriano Angeli despite application criterion 3.C. 1. e) of the Code, according
to which the persistence in office for more than nine years during the past twelve could be reason
for impediment to the recognition of the independent director qualification.
For the offices held by the regular members of the Board of Auditors pursuant to article 148-bis
CFA, please refer to the table annexed to this report.
In 2015, the Board of Auditors met 11 times.
Changes after the closure of the financial year of reference
94
Taking into account as outlined in the introduction regarding the situation of the Mediolanum
shareholders’ agreement, there were no changes in the Corporate Governance structure with
effect from the closing of 2015.
95
3. ANNUAL REPORT OF THE OFFICES OF DIRECTORS UNDER PRINCIPLE 1.C.2.
OF THE CORPORATE GOVERNANCE CODE OF LISTED COMPANIE S
On February 18, 2016, the Board of Directors verified, as required by the Corporate Governance
Code, the offices of Director and Auditor currently held by the directors in other companies
outside the Mediolanum Group, listed on regulated markets, in financial, banking, insurance or
large companies.
More precisely:
DORIS ENNIO – Chairman
Does not hold relevant offices in companies outside the group
LOMBARDI EDOARDO – Vice Chairman
Chairman of the Board of Directors of:
− Banca Esperia S.p.A.
Member of the Board of Directors of:
− Fedrigoni S.p.A.
− Istituto Europeo di Oncologia S.r.l.
PIROVANO GIOVANNI – Vice Chairman
Vice Chairman of the Board of Directors of:
− Cedacri S.p.A.
DORIS MASSIMO ANTONIO – CEO
Does not hold relevant offices in companies outside the group
DORIS ANNALISA SARA – Director
Does not hold relevant offices in companies outside the group
96
BIANCHI BRUNO – Director
Does not hold relevant offices in companies outside the group
DEL FABBRO LUIGI – Director
Member of the Board of Directors of:
− Banca Esperia S.p.A.
GUALTIERI PAOLO – Director
Extraordinary commissioner of:
− Additional social security and pension funds for the personnel of Istituto Bancario Italiano
Liquidator commissioner of:
− Giorgio Vincent SIM S.p.A.
Chairman of the Supervisory Committee of:
− Eagle SIM S.p.A.
RENOLDI ANGELO – Director
Chairman of the Board of Statutory Auditors of:
− Europrogramme Fiduciaria S.p.A.
Member of the Board of Directors of:
− Arnoldo Mondadori Editore S.p.A.
PENNA ANTONIO MARIA – Director
Does not hold relevant offices in companies outside the group
TUSQUETS TRIAS DE BES CARLOS JAVIER – Director
Chairman of the Board of Directors of:
97
− Trea Capital Partners S.V. S.A.
− Am Trea Capital SGIIC S.A.
Member of the Board of Directors of:
− Renta Corporaciòn Real Estate S.A.
− Irestal International Aps
Basiglio - Milano 3, February 18, 2016
for the Board of Directors
The Chairman
Ennio Doris
98
ANNEX 1:
Annex 1: Paragraph on “Main characteristics of the risk management and internal control
systems in relation to the financial reporting process” pursuant to art. 123-bis, paragraph 2,
lett. b), CFA
Banca Mediolanum’s Internal Control System (hereinafter ICS) is defined as the set of rules,
procedures and organizational structures aimed at allowing, through an adequate process of
identification, measurement, management and monitoring of major risks, sound management of
the company, correct and consistent with the objectives set.
An effective ICS helps to ensure the protection of corporate assets, the efficiency and
effectiveness of business operations, the reliability of financial reporting and compliance with
laws and regulations.
The control environment is the element of corporate culture that determines the sensitivity level
of the direction and management towards audit requirements. It forms the basis for all other
components of the ICS.
Factors that influence the control environment are: the integrity, ethical values and competence of
personnel, philosophy and management style of management, methods of delegation of
responsibilities, organization and professional development and commitment and the ability to
address and guide the Board of Directors.
99
The various companies within the Mediolanum Group operate a comprehensive, effective
Internal Control System in their operating structures in accordance with applicable regulations
and the business they conduct.
A key role is played by the Risk Committee of Banca Mediolanum S.p.A. as the opportunity for
discussion and analysis for the development of an overview of the various risks associated with
the various types of business and sharing of actions taken against the risks identified.
Banca Mediolanum S.p.A., Mediolanum Gestione Fondi SGR P.A., Mediolanum Fiduciaria
S.p.A., Mediolanum Comunicazione S.p.A., insurance companies Mediolanum Vita S.p.A. and
Mediolanum Assicurazioni S.p.A. and foreign subsidiaries, in order to encourage the
dissemination of values marked by the professional integrity and respect of laws and regulations,
also adopted a Code of Ethics that outlines the principles of conduct to be followed.
These Codes are complementary to the Corporate Governance Code of the members of the
administrative and control bodies, employees, agents and contract workers adopted respectively
by Banca Mediolanum S.p.A. and Mediolanum Gestione Fondi SGR P.A., the Group companies
qualified as “authorized intermediaries”. The Code of Ethics, and, where present, the Corporate
Governance Code also represent essential elements required by the Organization, Management
and Control Models pursuant to Legislative Decree 231/01, which the Mediolanum Group
companies have adopted.
As for the option of attributing to the Board of Statutory Auditors the duties of the Supervisory
Body of Banca Mediolanum established pursuant to Legislative Decree 231/01, the Board of
Directors, after careful consideration, decided not to change the current organization based on the
coexistence of the two Bodies. The underlying reasons for this choice lie mainly in the long-
100
established expertise gained by the members of the Supervisory Body, since its establishment in
2003, in the areas of application of Legislative Decree 231/01.
The Internal Control System of the Mediolanum Group consists of the set of rules, functions,
structures, resources, processes and procedures that aim to ensure, in full respect of sound and
prudent management, the achievement of the following aims:
• verification of the implementation of corporate strategies and policies;
• containment of risk within the limits set out in the reference framework for determining
the Group’s risk appetite (Risk Appetite Framework - RAF);
• safeguarding of the value of assets and protection against losses;
• effectiveness and efficiency of company processes;
• reliability and security of corporate information and IT procedures;
• prevention of the risk that the Group may be involved, even unintentionally, in illegal
activities (with particular reference to those related to anti-money laundering, usury and
the financing of terrorism);
• compliance of operations with the law and supervisory regulations, as well as policies,
regulations and internal procedures.
In particular, the Internal Control System in place within the Mediolanum Group plays a role of
central importance in the organization, as it:
• represents a key element of knowledge for corporate bodies, allowing them full awareness
of the current company situation;
• ensures effective management of business risks and their mutual interrelations;
• orients the changes of the strategic guidelines and company policies;
101
• allows adapting, in a consistent manner, the organizational context in which the Group
operates;
• oversees the functionality of management systems and compliance with obligations in
terms of prudential supervision;
• promotes the dissemination of a proper culture of risks, the law and corporate values.
In this context, the Mediolanum Group attributes strategic importance to the Internal Control
System, since it assumes a prominent position in the scale of corporate values, covering not only
the internal control functions, but by involving the entire organization in the development and
application of logical and systemic methods to identify, measure, communicate and manage risks.
Finally, it is noted that in evaluating the adhesion of the Internal Control System to the principles
defined by the Supervisory Authority and adopted by the Group as mentioned above, the
Mediolanum Group considers as elements at the basis of this assessment, the following
characteristics:
• completeness, the internal Control System must comply with laws and regulations;
• adequacy, the internal Control System must be coherent and articulated in proportion to
the characteristics of the Group/Companies concerned;
• functionality, the internal Control System must be applied and appropriate to the pursuit
of the overall sound and prudent management of the Group;
• reliability, the internal Control System must continuously be effective;
• integration, the Internal Control System must aim for the continuous search for
coordination mechanisms in order to provide governing bodies with comprehensive,
understandable and integrated information;
102
• dissemination of control activities to each operating segment and hierarchical level;
• cost-effectiveness, the Internal Control System must achieve an adequate and functional
trade-off between the overall cost of controlling and managing risks;
• evolution, the Internal Control System must aim for the constant search for mechanisms
for the continuous improvement of the structure thereof and its effectiveness and
efficiency;
• timeliness, the Internal Control System must ensure that anomalies are promptly brought
to the attention of appropriate levels of the company able to promptly activate the
appropriate corrective actions.
From a structural viewpoint, the internal Control System is organized according to different
levels that involve:
• line controls (so-called “first-level controls”): aimed at ensuring the correct conduct of
transactions. Said controls are carried out by the operating structures (ex. hierarchical,
systematic and random), also through dedicated units exclusively for control tasks that
report to the managers of the operating structures (or executed as part of back office) and,
when possible, are incorporated in IT procedures. According to this configuration, the
operating structures are the first responsible for the risk management process. In daily
operations, these structures are in fact required to identify, measure or assess, monitor,
mitigate and report the risks arising from ordinary company activities in accordance with
the risk management process. In addition, these structures must respect the operating
limits assigned to them consistent with the risk objectives and procedures which make up
the risk management process;
103
• controls on risks and compliance (so-called “second-level controls”): aimed at ensuring
compliance with the operating limits assigned to the various functions, the correct
implementation of the risk management process and compliance of business operations
according with norms, including self-regulation. As required by law, the functions
responsible for the second-level controls are separate from production functions.
Specifically, within the Mediolanum Group, these functions are:
• Risk Management;
• Compliance;
• anti-money laundering office;
• sales network inspection;
• internal audit (so-called “third-level controls”): aimed at identifying, at set deadlines
depending on the nature and intensity of the risks, violations of procedures and
regulations, and to periodically assess the completeness, adequacy, functionality (in terms
of efficiency and effectiveness) and reliability of the Internal Control System and
information systems (ICT audit).
A further control level consists of the Board of Auditors that i) within the meaning of the Civil
Code, monitors, inter alia, the adequacy of the organizational, administrative-accounting and
control structure, and, ii) in compliance with the provisions of Legislative Decree no. 39 of
January 27, 2010 now has - in the so-called public interest entities including listed companies -
supervisory tasks, relating to:
a) financial reporting process;
b) effectiveness of internal control, internal audit, if applicable, and risk management systems;
104
c) statutory audit of annual accounts and consolidated accounts;
d) the independence of the statutory auditor or independent auditors, particularly as regards the
provision of non-audit services to the entity subject to the statutory audit.
There are also the Independent Auditors, entrusted with the verification of the keeping of
accounts and compliance of the financial statements with the accounting records and their
compliance with the rules that govern them.
The Board of Directors plays a guiding role and periodically assesses the adequacy, efficiency
and effectiveness of the internal control system in relation to the complexity of the business.
Following the Merger of Mediolanum S.p.A. into Banca Mediolanum S.p.A. with effect starting
December 30, 2015, the latter appointed the Financial Reporting Manager, pursuant to the
provisions of art. 154-bis of the Consolidated Finance Act, as amended pursuant to Law
262/2005, of Legislative Decree no. 303/2006 and Legislative Decree 195/2007.
In order to allow the Financial Reporting Manager to certify consistency with accounting records
for all acts disseminated to the market, the adequacy and effective application of administrative-
accounting procedures adopted and the preparation of the financial statements, such as to provide
a true and correct representation of the financial and economic situation of the issuer and of the
consolidated companies, the Bank has adopted a specific Model, governed by the “Policy for the
management of the activities of the Financial Reporting Manager - L.262/2005” and developed
on the basis of as required by market best practice.
Specifically, management Model 262 implemented by Banca Mediolanum S.p.A. develops
through four distinct areas that repeat cyclically in the activity of updating and periodic
maintenance of the model:
105
Governance: assignment of roles, responsibilities and definition of the procedures and
information flows by means of which the various players involved interact.
Control environment: identification of regulations, disciplines, control mechanisms and general
governance rules of technologies and application developments.
Control model: definition of the pillars on which the monitoring activities of the Financial
Reporting Manager are based, in order to meet the requirements of art. 154-bis of the
Consolidated Finance Act.
Methodological framework: definition of the process through which, periodically, activities are
planned and the scope of intervention is defined (planning & scoping), verification of adequacy
and functioning is performed on the administrative-accounting processes identified and any
mitigation actions of the riskiness identified are defined.
In particular, the control model used by the Financial Reporting Manager, in order to meet the
requirements of art. 154-bis of the CFA (Law 262/2005), is based on the following pillars:
Assessment;
Testing;
Certification System.
The first pillar - Assessment: aims to annually verify, as part of the integrated risk assessment
organized by the Compliance Assessment & Controls Unit, of the Legal & Compliance Function,
the adequacy of the administrative-accounting oversights in terms of level of formalization of
processes and procedures, degree of automation of the same, training of dedicated personnel.
The second pillar - Testing: regards the verification to ascertain, independently, the effective
operation of the controls provided on administrative-accounting procedures.
106
This activity, organized by the Analysis and Control Unit Law 262/05 of the Administration and
Financial Statements Division, is planned annually (reviewed half-yearly) with the objective of
ascertaining the effectiveness of the controls associated with the administrative-accounting
processes performed by the various organizational units also through the re-execution of the
same.
The third pillar - Certification system: regards the attribution of specific ownership to the
managers of the administrative areas and business units concerned. This system has as its first
objective to ensure, through the certification of the managers concerned, that the procedures
defined as suitable to ensure compliance with the objectives identified by Law 262/2005 are met
on an ongoing basis and any events which would invalidate these expectations are reported and
brought to the attention of the Financial Reporting Manager in due time for settlement.
The detection of relevant processes of interest and the assessment of their adequacy is prodromal
to the certification system, which the various managers must periodically meet at the request of
the Compliance Assessment & Controls Unit.
As for the foreign companies that contribute significantly to the items of the Consolidated
Financial Statements of Banca Mediolanum S.p.A., the subsidiaries Banco Mediolanum S.A. and
Mediolanum International Fund Limited have been identified for the year 2015. For these
Companies, the respective Boards of Directors, at the request of the Financial Reporting
Manager, have identified a local representative to replicate, according to a criterion of
proportionality and taking account of local specifications, the activities envisaged by
management Model 262 overseeing the administrative-accounting processes. The foreign local
representatives, in addition to realizing the activities needed for the Financial Reporting Manager
107
to meet the regulatory requirements, have also provided the latter with adequate information
about the activities carried out by means of internal certification, made prior to the drafting of the
Annual Financial Report.
108
TABLE 1: INFORMATION ON CORPORATE STRUCTURES
STRUCTURE OF THE SHARE CAPITAL
No. shares
% with respect to share capital
Listed (indicate markets) / unlisted Rights and obligations
Ordinary shares
738,401,857 100% ITALY (MI)
Shares with limited voting right
Shares with no voting right
OTHER FINANCIAL INSTRUMENTS
(attributing the right to subscribe newly issued shares)
Not present
SIGNIFICANT SHAREHOLDINGS
Refer to the table on page 12
109
TABLE 2: STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES
Board of Directors
Internal Control
and Risks
Committee
Remun. Committee
Any Executive Committee
Office Members
Year of birth
Date of first
appointment* In office
since In office
up to List **
Exec. Non Exec.
Indep. Code
Indep. CFA
Number of other Offices
***
(*) (*) (**) (*) (**) (*) (**)
Chairman Ennio Doris
03/07/1940
20/11/1991
19.03.2015
Appr. FS 31/12/2017
N.A. X
0 14/15
93.33%
Vice Chairman Edoardo Lombardi
19/02/1936
04/07/1994 19.03.2015 Appr. FS
31/12/2017
N.A. X
3 12/15
80%
Vice Chairman Giovanni Pirovano
07/06/1951
25/11/1996
19.03.2015
Appr. FS 31/12/2017
N.A. X 1
14/15 93.33%
Chief Executive Officer
Massimo Antonio
Doris
09/06/1967
18/04/2008
19.03.2015
Appr. FS 31/12/2017
N.A. X
0
13/15 86.67%
Director Annalisa Sara Doris
07/05/1970
19/03/2015
19.03.2015
Appr. FS 31/12/2017
N.A. X
0
9/12 75.00%
Director Bianchi Bruno
04/02/1938
20/04/2009
19.03.2015
Appr. FS 31/12/2017
N.A. X X
X 0 14/15
99.33%
9/9 P 2/2
100% M
Director Luigi Del Fabbro •
26/09/1949
25/11/1996
19.03.2015 Appr. FS
31/12/2017
N.A. X 1
14/15 99.33%
Director Paolo Gualtieri
20/07/1961
11/04/2001
19.03.2015 Appr. FS
31/12/2017
N.A. X X
X 3
11/15 73.33%
6/9 M
2/2 100%
P
Director
Angelo Renoldi
07/08/1949
28/04/2003
19.03.2015 Appr. FS
31/12/2017
N.A. X X X 2 9/15
60.00%
2/2
100% M
Director Antonio Maria
Penna
06/02/1958
28/04/2014
19.03.2015 Appr. FS
31/12/2017
N.A. X
0
14/15 93.33%
9/9 M
Director Tusquets Trias de Bes Carlos Javier
23/01/1951
25/10/2000
19.03.2015 Appr. FS
31/12/2017
N.A. X 4 9/15
60.00%
No. of meetings held during the financial year of reference: BOD: 15 CCR: 9 CR: 2 Indicate the quorum required for the submission of lists by minority shareholders for the election of one or more members (pursuant to article 147-ter CFA): N.A.
110
NOTES The symbols listed below shall be indicated in the “Office” column: • This symbol indicates the Director in charge of the internal audit and risk management system. This symbol indicates the main party responsible for the management of the issuer (Chief Executive Officer or CEO). ° This symbol indicates the Lead Independent Director (LID). * Date of first appointment of each director refers to the date on which the director was appointed for the first time (ever) in the Board of Directors of the issuer. ** This column indicates the list from which each director was taken (“M”: majority list; “m” minority list; “BoD”: list submitted by the BoD). *** This column indicates the number of offices of director or statutory auditor held by the party concerned in other companies listed on regulated markets, including foreign markets, in financial, banking, insurance or large companies. In the Report on corporate governance, the offices are indicated in full. (*). This column indicates the attendance of directors at meetings of the Board and Committees (indicate the number of meetings attended compared to total number of meetings that could be attended, ex. 6/8, 8/8 etc.). (**). This column shows the qualification of director within the Committee: “P”: chairperson; “M”: member.
111
TABLE 3: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS BOARD OF STATUTORY AUDITORS
Office Members Year of birth
Date of first
appointment *
In office since
In office until
List **
Indep. Code
Participation in the meetings of the
Board of Auditors ***
No. other assignments ****
Chairman Arnaldo Mauri
18/12/1932
22/04/1997
19/03/2015 Appr. FS
31/12/2017
N.A.
x 90.91% 10/11
0
Regular Auditor Adriano Alberto Angeli
20/06/1948
19/12/1997
19/03/2015 Appr. FS
31/12/2017
N.A.
x 100% 11/11
5
Regular Auditor Marco Giuliani
18/06/1959
29/04/2014
19/03/2015
Appr. FS 31/12/2017
N.A.
x 81.82% 9/11
24
Alternate Auditor Francesca Meneghel
02/12/1961
20/04/2009
19/03/2015 Appr. FS
31/12/2017
N.A.
x //
13
Alternate Auditor Gianluca Orrù
31/01/1971
19/03/2015
19/03/2015 Appr. FS
31/12/2017
N.A.
x //
14
Number of meetings held during the financial year of reference: 11
Indicate the quorum required for the submission of lists by minority shareholders for the election of one or more members (pursuant to article 148 CFA): N.A.
NOTES * Date of first appointment of each auditor refers to the date on which the auditor was appointed for the first time (ever) in the Board of Auditors of the issuer. ** This column indicates the list from which each auditor was taken (“M”: majority list; “m” minority list). *** This column indicates the attendance of auditors at meetings of the Board of Auditors (indicate the number of meetings attended compared to total number of meetings that could be attended, ex. 6/8, 8/8 etc.). **** This column shows the number of director or auditor offices held by the person pursuant to art. 148-bis of the CFA and related implementing provisions contained in the Consob Issuer’s Regulation. The complete list of positions is published by Consob on its website under the terms of article 144-quinquiesdecies of the Consob Issuer Regulations.