corporate governance overview · 2018-06-11 · the corporate governance standards and best...

Corporate Governance Overview

2

Index

• Corporate Governance overview

• Focus on the 2017 / 2018 changes

• Shareholders structure

• Organizational and Governance structures

• Shareholders' Meetings

• Board of Directors

• Board of Directors composition

• Board of Directors - skills and expertise

• Board Committees

• Sustainability as integral part of the governance of ourGroup

• Remuneration of the non-executive Directors and of theBoard of Statutory Auditors members

• Remuneration of the Chief Executive Officer - the soleexecutive director sitting on the Board of Directors andemployee of the Company

• Board of Directors role

• Succession planning process

• Self-assessment process (on the Board of Directors and itsCommittees)

• Internal Controls System

• Related parties and associated parties

• Board of Statutory Auditors

• Disclaimer

3

Corporate Governance overview

Our corporate governance adheres to current rules and regulations as well as to therecommendations laid out in the Italian Corporate Governance Code, a soft law that identifiesthe corporate governance standards and best practices for Italian listed companies based onthe comply or explain principle, with disclosure of the reasons for failure to comply in theyearly corporate governance report

Our governance system is continuously monitored to assess the level and efficacy of ourgovernance efforts

the Articles of Association, the Regulations for the Shareholders' Meeting and the Corporate Bodies Regulations, providingthe framework for our governance

the Integrity Charter, stating ethical and deontological principles that the Group recognizes as its own and expects to beobserved by all those who work to achieve our objectives

the Code of Conduct, defining general rules of conduct, aiming to promote our compliance culture and commitment tosustainability

the Code of Ethics, adopted pursuant to Italian Legislative Decree no. 231/2001

the Group Compensation Policy, establishing an approach consistent with sustainable remuneration and its standardizedimplementation, with specific reference to the senior management

the Group Managerial Golden Rules, guidelines outlining our organizational model and establishing managerial andfunctional responsibilities for all key processes

Mai

nco

mp

on

ents

of

ou

rg

ove

rnan

ce

4

Focus on the 2017 / 2018 changes

Although the minimum & maximum range of directors

established in the Articles of Association has remained

unchanged, the number of UniCredit Directors steadily

decreased over the last years

Number of UniCredit Directors

As result of the review of our corporate governance system planned in the event of the renewal of the body with supervisory function in2018, the Board of Directors approved some actions to improve the Company governance and to align the same to the best nationaland international practices, including the reduction from 17 to 15 Directors and in the number of Vice Chairmen from 3 to 1 as wellas a maximum number of 3 mandates for the Board members

With the stepping down from their role as Vice Chairmen, Directors Mr. Palenzona and Mr. Cordero di Montezemolo (on March 1 andApril 20, 2017) the planned reduction of the number of Vice Chairmen for the 2018 year was de facto anticipated

In that regard:

in July 2017 the Board approved the process for identifying the candidates for the posts of member of the Board of Directors, includingthe Chairman and the Chief Executive Officer

the Shareholders’ Meeting on December 4, 2017, resolved upon some amendments to the Articles of Association in order to empoweralso the outgoing Board of Directors, in the event of its renewal, the faculty to file its own list of candidates as well as to increase fromone to two the number of Directors selected from the second list receiving the highest votes, without any connection with theshareholders who filed, or voted for, the first slate by number of votes.

in November 2017 the Board unanimously choose Mr. Fabrizio Saccomanni as candidate for the position of Chairman of the Board to beincluded in its own list of candidates and unanimously approved in February 2018 the submission of its own list for the a 2018-2020financial years

0 5 10 15 20 25

2009

2011

2012

2015

2018

23

20

19

17

15

5

SHARE CAPITAL

Ordinary shares 2,226,657,313

MAJOR SHAREHOLDERS (>3%)

Shareholders% of ordinaryshare capital (1)

2 Mubadala Investment Company PJSC 5.04%

Shareholders structure

COMPOSIZIONE GEOGRAFICA AL 31 DICEMBRE 2016

ULTERIORI INFORMAZIONI

Presence of Shareholders agreements NO

Presence of controlling Shareholders NO

(1) on share capital as at March 14, 2018

GEOGRAPHICAL BREAKDOWN

FURTHER INFORMATION

1 Capital Research and Management Company 5.07%

22.18%

77.82%Italy

Other countries

AS AT DECEMBER 31, 2017

AS AT MARCH 14, 2018

22.22%

77.78% Italy

Other countries

Organizational and Governance structures

AUDIT FIRM

BOARD OF STATUTORY AUDITORS

BOARD OF DIRECTORS

SHAREHOLDERS' MEETING

CEO

231SUPERVISORY

BODY

BOARD COMMITTEES

INTERNAL CONTROLS& RISKS COMMITTEE

CORPORATE GOVERNANCE,NOMINATION AND SUSTAINABILITY

COMMITTEEREMUNERATION COMMITTEE

RELATED-PARTIES AND EQUITYINVESTMENTS COMMITTEE

Group RiskManagement

Group Compliance

Group Risk & InternalControl Committee

Group CreditCommittee

Executive Management Committee

GENERAL MANAGERCHIEF OPERATING OFFICE

Internal Audit

Management functions

6

7

Shareholders' Meetings

SHAREHOLDERS

RIGHTSto ask for the call of a Shareholders'Meeting (shareholders who, even jointly,

represent 5% of the share capital)

to submit questions pertainingto items on the Agenda even prior to

Shareholders' Meeting. The Company shallprovide answers during the Meeting

itself at the latest

Ordinary session

financial statements approval, resolution on net profit allocation

appointment of the Directors and Statutory Auditors, granting of a mandate for the externalauditing to an audit firm, resolving on the connected fees

approval of the remuneration and incentive policies and practices

criteria to determine the compensation to be granted in the event of early termination ofemployment or early retirement from office

Vo

tin

gri

gh

ts

Extraordinary session

amendments to the Articles of Association

capital increases

mergers and de-mergers

appointment, replacement and powers of the official receivers/trustees in bankruptcy

Quorum for resolutions

with favorable vote of atleast 2/3 of the share capitalrepresented in the Meeting

Quorum for resolutions

absolute majority

[higher only for the approval ofa ratio of variable to fixedremuneration of employeeshigher than 1:1]

to be represented ina Shareholders' Meeting by proxy,

indicating the name of one or morepossible representative's substitutes. The

proxy may be granted also to theso-called Company-Designated

Proxy Holder

to ask for the integration ofthe Agenda and/or to submit further

resolution proposals on items already on theAgenda (shareholders who, even jointly,

represent at least 0.5%of the share capital)

to submit lists of candidatesfor the appointment of Director or

Statutory Auditor (holders of at least 0.5%of the share capital in the

form of ordinary shares withvoting rights)

Record date: 7 market trading days before the dateestablished for the Meeting

Each ordinary share gives theholder the right to cast onevote

AGM notice and Boardproposals – available at thelatest 30 days before theAGM date (40 days in case ofrenewal of the corporatebodies)

Analytical voting disclosure

Financial calendar availableat the latest by January 30th

8

CHAIRMAN

Cesare Bisoni

Deputy ViceChairman

Giuseppe Vita

Henryka Bochniarz

Lucrezia Reichlin

Clara C. Streit

Paola Vezzani

Alexander Wolfgring

Anthony Wyand

Elena Zambon

Mohamed Hamad Al Mehairi

Alessandro Caltagirone

Jean Pierre Mustier

Board of Directors

Sergio Balbinot

Vincenzo CalandraBuonaura

Luca Cordero diMontezemolo

Chief ExecutiveOfficer

Board of Directors

Secretary

Gianpaolo Alessandro

Martha D. Böckenfeld

Fabrizio Saccomanni

9

Board of Directors

Giuseppe Vita

Chairman

First appointment dateMay 2012

Independent as per TUF

Non-Executive

Attendance % 100

Born in Favara (Agrigento - Italy)on April 28, 1935

POSITIONS HELD IN OTHER COMPANIES*

• Chairman of the Supervisory Board

of Axel Springer SE

the Board approval

Role played by the Chairman• is responsible for ensuring that the system of corporate governance functions

effectively;• is an interlocutor for the Board of Statutory Auditors and the Board Committees;• while remaining neutral, the Chairman promotes dialogue among executive

and non-executive members, seeking the active participation of non-executivemembers in the Board’s proceedings so that the resolutions it reaches are theresult of adequate debate and an informed and aware contribution from all ofits members

Furthermore, he is a member of the specialist Board Committees onappointments, on risks and on remuneration: this practice represents a signal ofa sound and good governance, ensuring that the Chairman is appropriately andtimely informed on all the discussions concerning the topics that are submitted tothe Board approval

CHAIRMAN REPLACEMENT PROCEDURE

Where absent or impeded, the Chairman isreplaced by the Deputy Vice Chairman. Whereboth the Chairman and Deputy Vice Chairmanare absent or impeded, the meeting is chairedby the oldest Director

Vincenzo Calandra Buonaura

Born in Reggio Emilia (Italy)on August 21, 1946

None


Member of the Committees

• Corporate Governance, Nomination and Sustainability

• Internal Controls & Risks

* POSITIONS HELD BY THE DIRECTORS OF UNICREDIT IN OTHER COMPANIES LISTED ON REGULATED MARKETS (BOTH IN ITALY AND ABROAD), AS WELL AS IN FINANCIAL SERVICES COMPANIES, BANKS, INSURANCE

COMPANIES OR OTHER LARGE COMPANIES

Deputy Vice Chairman



Non-Executive

Attendance % 100

Member of the Committees

• Corporate Governance, Nomination andSustainability

• Remuneration• Internal Controls & Risks

Chief Executive Officer

First appointment dateJune 2016

Non Independent

Executive

Attendance % 100

Jean Pierre Mustier

Born in Chamaliéres (France)on January 18, 1961


Organizational Structure

Board of Directors

None

Director in charge of theinternal controls and risksmanagement system

10* POSITIONS HELD BY THE DIRECTORS OF UNICREDIT IN OTHER COMPANIES LISTED ON REGULATED MARKETS (BOTH IN ITALY AND ABROAD), AS WELL AS IN FINANCIAL SERVICES COMPANIES, BANKS, INSURANCE


GROUP RISKMANAGEMENT

GROUP IDENTITY& COMMUNICATIONS

GROUP COMPLIANCE

CHIEF OPERATINGOFFICE

COUNTRYCHAIRMANGERMANY

COUNTRYCHAIRMAN

AUSTRIA

CEEDIVISION

GROUP LEGAL

STRATEGY AND M&A

ITALY CIBDIVISION

ASSETGATHERING

OTHERMANAGERIALCOMMITTEES

CEOExecutive Management

Committee

GROUP INSTITUTIONAL& REGULATORY AFFAIR

GENERALMANAGER

GROUP HUMAN CAPITAL

GROUP LENDING OFFICE

Director

First appointment dateOctober 2015

Independent as perArticles of Association /Code and TUF

Non-Executive

Attendance % 86.67

Mohamed Hamad Al Mehairi

Born in Al Ain (UAE)on December 6, 1975

• Member of the supervisory body ofCompanies of the MIC Group

• Director of Al Hilal Bank

• Director of Emirates InvestmentAuthority

Director

First appointment dateJune 2016


Non-Executive

Attendance % 86.67

Sergio Balbinot

Born in Tarvisio (Udine, Italy)on September 8, 1958

• Member of the supervisory body ofCompanies of the Allianz Group

• Director of Borgo San Felice S.r.l.

Director



Non-Executive

Attendance % 93.33

Cesare Bisoni

Born in Caslino d'Erba (Como, Italy)on October 1, 1944


None

POSITIONS HELD IN OTHER COMPANIES* POSITIONS HELD IN OTHER COMPANIES*

Board of Directors

Director



Non-Executive

Attendance % 93.33

Henryka Bochniarz

Born in Swiebodzin (Poland)on October 29, 1947

• Member of the Supervisory Board of FCAPoland SA

• Member of the Supervisory Board ofOrange Polska SA


Member of the Committees• Internal Controls & Risks• Related-Parties and Equity

Investments (Chairman)

Director

First appointment dateSeptember 2016


Non-Executive

Attendance % 80

• Member of the supervisory body ofCompanies of the Generali HoldingLtd Group

• Chairman of the Supervisory Board ofScope Corporation AG

• Chairman of the Supervisory Board ofScope Ratings AG

• CEO of DFG – DeutscheFondsgesellschaft Invest S.E. (toresign within April 1, 2018, and takeon a non-executive role in the sameCompany)

Martha Dagmar Böckenfeld

Born in Lϋnen (Germany)on September 2, 1965


11 * POSITIONS HELD BY THE DIRECTORS OF UNICREDIT IN OTHER COMPANIES LISTED ON REGULATED MARKETS (BOTH IN ITALY AND ABROAD), AS WELL AS IN FINANCIAL SERVICES COMPANIES, BANKS,INSURANCE COMPANIES OR OTHER LARGE COMPANIES

Member of the Committee• Remuneration

Board of Directors

Director

First appointment dateApril 2009


Non-Executive

Attendance % 93.33

Lucrezia Reichlin

• Director of Eurobank Ergasias S.A.

• Director of AGEAS Insurance GroupSA/NV

• Director of Messaggerie ItalianeS.p.A.

• Chairwoman and Co-Founder of NowCasting Economics Limited

Born in Rome (Italy)on August 14, 1954


Director



Non-Executive

Attendance % 86.67

Alessandro Caltagirone

Born in Rome (Italy)on December 27, 1969

• Member of the supervisory body ofCompanies of the FGC Group

• Director of ACEA S.p.A.


Luca Cordero di Montezemolo

Born in Bologna (Italy)on August 31, 1947

Member of the Committee• Corporate Governance,

Nomination and Sustainability(Chairman)

Director



Non-Executive

Attendance % 100


• Chairman of Alitalia-Compagnia AereaItaliana S.p.A.

• Chairman of Nuovo TrasportoViaggiatori S.p.A.

• Director of Coesia S.p.A.

• Director of Renova Management AG

Clara C. Streit

Born in Syracuse - NY (USA)on December 18, 1968


• Director of Jerónimo Martins SGPS S.A.

• Member of the Supervisory Board of

NN Group NV

• Member of the Supervisory Board ofVonovia SE

• Director of Vontobel Holding AG

Director



Non-Executive

Attendance % 80

12 * POSITIONS HELD BY THE DIRECTORS OF UNICREDIT IN OTHER COMPANIES LISTED ON REGULATED MARKETS (BOTH IN ITALY AND ABROAD), AS WELL AS IN FINANCIAL SERVICES COMPANIES, BANKS,INSURANCE COMPANIES OR OTHER LARGE COMPANIES

Fabrizio Saccomanni

Born in Rome (Italy)on November 22, 1942

Member of the Committees• Corporate Governance, Nomination

and Sustainability• Internal Controls & Risks

Director

First appointment dateNovember 2017


Non-Executive

Attendance % 100


None

Member of the Committees• Internal Controls & Risks• Related Parties and Equity

investments

Member of the Committees• Corporate Governance,

Nomination and Sustainability• Remuneration (Chairman)

Member of the Committees• Corporate Governance,

Nomination and Sustainability• Internal Controls & Risks

Elena Zambon

Born in Vicenza (Italy)on October 15, 1964

Member of the Committee• Corporate Governance,

Nomination and Sustainability

Director



Non-Executive

Attendance % 80

Director



Non-Executive

Attendance % 100

Alexander Wolfgring

Born in Vienna (Austria)on September 17, 1962

Member of the Committees• Internal Controls & Risks

(Chairman)• Remuneration

• Member of the supervisory body ofCompanies of the AVZ Group


* POSITIONS HELD BY THE DIRECTORS OF UNICREDIT IN OTHER COMPANIES LISTED ON REGULATED MARKETS (BOTH IN ITALY AND ABROAD), AS WELL AS IN FINANCIAL SERVICES COMPANIES, BANKS, INSURANCE


13

Board of Directors

Director

First appointment dateJanuary 1999


Non-Executive

Attendance % 93.33

Anthony Wyand

Born in Crowborough (England)on November 24, 1943

Member of the Committees• Internal Controls & Risks• Remuneration

• Director of Société Foncière LyonnaiseSA

• Chairman of Cybèle AssetManagement


• Member of the supervisory body ofCompanies of the Zambon Group

• Director of Ferrari N.V.


Director



Non-Executive

Attendance % 100

Paola Vezzani

Born in Pescara (Italy)on January 15, 1962


None

Member of the Committees• Internal Controls & Risks• Related-Parties and Equity

Investments

Balance of executive and non-executive Directors

1 CEO executive 16 non-executive

Geographical mix (%)

Board of Directors composition

Board Composition Board meeting attendance

average attendance

The Board of Directors held 15 meetings in the 2017 year

The latest independent Directors meeting, with none of theother Directors in attendance, was held in April 2017

Executive Non-executive Independent

6%

94%

71%

Board independence

12 as per Articles of Association 16 as per TUF

and Corporate Governance Code

Length of tenure 5,2 years

92%

14

Age Breakdown

59 %

41 %Italy

Other countries(Austria, France, Germany,England, Poland, United ArabEmirates, United States ofAmerica)

Gender balance

76%

88%

88%

47%

76%

82%

53%

59%

Banking

Managerial/entrepreneurship experience

Financial and accounting

Audit, compliance, legal

Banking and financial regulatory

International experience

Global dynamics knowledge

Global socio-political knowledge

Directors skills and expertise

The skills and expertise show an optimal balance in the Boardof Directors composition

Banking and financial skills and expertise are well represented

14 Board of Directors members have international experience

Board of Directors - skills and expertise

Qualitative-quantitative composition

The composition of the Board in office quantitatively andqualitatively corresponds to the theoretical profile approved bythe Board itself

Also in light of the information given by the persons concerned,the requirements concerning professional experience, integrityand independence, gender balance and the maximum numberof directorships that directors may hold, as per the desiredlevels indicated by the Board in the profile approved on March2015 recalling the provisions of the CRD IV Directive, wereaccounted for

All of the areas of competence were represented on theBoard and, more specifically, all of the Directors had at least 2of the required areas of competence; on average, the Directorshad 6 areas of competence

The positions held by the Board members in other companieslisted on regulated markets (both in Italy and abroad), as wellas in financial services companies, banks, insurance companiesor other large companies, is reported in the CorporateGovernance Report

15

Board Committees

Corporate Governance, Nomination and Sustainability

CHAIRMAN MEMBERS

Luca Cordero diMontezemolo

Independent


Fabrizio Saccomanni

Independent

Clara C. Streit

Independent

AlessandroCaltagirone

Independent

Giuseppe Vita Elena Zambon

Independent

Remuneration

CHAIRMAN MEMBERS

AlessandroCaltagirone

Independent

HenrykaBochniarz

Independent

Giuseppe Vita

AlexanderWolfring

Independent

Anthony Wyand

Meetings attendance

average attendance

Independent

71 %

92 %

Non-executive

100 %

average attendance

Independent

60 %

97 %

Non-executive

100 %

16

Meetings attendance

All members are non-executive and the majority of themindependent according to the Corporate Governance Code and

the Articles of AssociationThe Chairman is chosen among the independent directors

Where the Board has a director elected by a minority, this Directorshall sit on at least one committee

All members are non-executive and the majority of themindependent according to the Corporate Governance Code and

the Articles of AssociationThe Chairman is chosen among the independent directors

Where the Board has a director elected by a minority, this Directorshall sit on at least one committee

CHAIRMAN MEMBERS

Giuseppe Vita

AlexanderWolfring

Independent

Anthony Wyand

Internal Controls & Risks

Board Committees

CHAIRMAN MEMBERS

Cesare Bisoni

Independent

Lucrezia Reichlin

Independent

Related-Parties and Equity Investments

Paola Vezzani

Independent

Paola Vezzani

Independent

Clara C. Streit

Independent

Cesare Bisoni

Independent


average attendance

67 %

91 %

100 %

100 %

95 %

100 %

17

Meetings attendance

Independent

Non-executive

average attendance

Independent

Non-executive

Meetings attendance

Fabrizio Saccomanni

Independent

Lucrezia Reichlin

Independent

All members are non-executive and the majority of them independentaccording to the Corporate Governance Code and the Articles of Association

The Chairman is chosen among the independent directorsWhere the Board has a director elected by a minority, this Director shall sit

on at least one committee

All members independent according to theCorporate Governance Code

• At the end of 2016, we strengthened our corporate governancesystem by assigning responsibility for overseeing sustainability issuesto the Corporate Governance, HR and Nomination Committee, whichwas subsequently renamed the Corporate Governance, Nomination andSustainability Committee

• The Corporate Governance, Nomination and Sustainability Committeeexamines in advance the yearly Integrated Report to be submitted forapproval to the Board of Directors, makes proposals with regard to theGroup environmental and social strategy, annual objectives andtargets to reach, monitoring over time that they have beenimplemented, supervises the sustainability evolution also in the light ofthe international guidelines and principles on the subject, monitoringthe Group position

• The Group Environmental and Social Council (GESC) proposes theGroup Environmental and Social Strategy, annual objectives as wellas the related activities to Executive Management Committee and tothe CEO for approval. Furthermore the GESC oversees theimplementation of the UniCredit environmental and social initiativesand commitments. The Head of Group Identity & Communications(Group I&C) chairs the GESC

• The Group Sustainability unit, part of the Group I&C department, acts asthe GESC’s secretariat and is responsible for supporting the work ofsenior management to develop strategies that integratesustainability considerations into the value creation process andgenerate long-term benefits for all stakeholders. The unit is alsocharged with monitoring key performance indicators andcommunicating the UniCredit sustainability approach and results toexternal audiences

18

Our sustainability governance

Sustainability as integral part of the governance of our Group

ChairmanBoard of Directors

CORPORATEGOVERNANCE,

NOMINATION ANDSUSTAINABILITY

COMMITTEE

CEOExecutive Management Committee (EMC)

Group Environmental and Social Council (GESC)Chairman: Head of Group Identity and CommunicationsSecretariat: Group SustainabilityParticipants: Members of Group Risk Management, COO Area, GroupHuman Capital, Group Compliance, CIB division, countries representatives,

etc.

Group Sustainability• Guides the ESG (Environmental, social and governance) reputational risk

prevention process for the environmental and social trend and riskscouting

• Coordinates GESC and competent functions discussions• Drafts the annual Integrated Report, which discloses the Group’s

sustainability performance to the public• Dialogues with SRI (Sustainable Responsible Investors) and specialized

rating agencies, analysts

19

Remuneration of the non-executive Directors and of the Board ofStatutory Auditors members

■ The remuneration of the non-executive Directors and of the Board of StatutoryAuditors members of UniCredit is

represented only by a fixed component

determined on the basis of the importance of the position and the timerequired for the performance of the tasks assigned

■ The compensation paid to non-Executive Directors and Statutory Auditors is not linkedto the economic results achieved by UniCredit and they do not take part in anyincentive plans based on stock options or, generally, based on financial instruments

For any further information reference is made to the 2018 Group Compensation Policy available on UniCredit website, in the section dedicated to 2018 Shareholders’ Meeting

20

Remuneration of the Chief Executive Officer, the sole executive Directorsitting on the Board of Directors and employee of the Company

For any further information reference is made to the 2018 Group Compensation Policy available on UniCredit website, in the section dedicated to 2018 Shareholders’ Meeting

FIX

EDR

EMU

NER

ATI

ON

VA

RIA

BLE

REM

UN

ERA

TIO

N

In compliance with applicable regulations, the adoption of a maximum ratio between variable and fixed remuneration of 2:1 has notchanged - for the personnel belonging to the business functions, as resolved by the Annual General Meeting on May 13, 2014, andconfirmed in the following AGMs

Base salary is appropriate in the specific market for the business in which an individual works and for the talents, skills andcompetencies that the individual brings to the group. The relevance of fixed compensation weight is sufficient to reward the activityrendered even if the variable part of the remuneration package were not paid due to non-achievement of performance goals.

As per the request by the CEO Jean Pierre Mustier to the Board of Directors in 2016, to set the right tone from the top, as well as tofully align his interests with all stakeholders, specific conditions are applied to his remuneration effective January 1, 2107.

In particular, his fixed remuneration was reduced by 40%. With reference to 2017, the Chief Executive Officer therefore received atotal fixed remuneration of € 1.2 m, including director’s remuneration.

For the whole time horizon of the Strategic Plan Transform 2019, the variable remuneration for the Group Chief Executive Officer iscovered by the 2017-2019 Long Term Incentive Plan, tied to Strategic Plan targets and overall aligned to the Risk AppetiteFramework.

The actual evaluation of the overall LTI Plan, including the appraisal of performance targets, will be carried out at the end of thethree years performance period (i.e. at the end of 2019 on end-of-Plan targets).

21

Board of Directors role

The Board of Directors is responsiblefor

Together with its subsidiaries, a wide range of banking, financialand related activities are offered on a global scale in Italy,

Germany, Austria, Poland and several other Central and EasternEuropean countries

• the resolutions concerning the general guidelines and theadoption and amendment of business, strategic and financialplans for the Company as well as the periodic monitoring oftheir implementation

• approving the UniCredit organisational structure and corporategovernance, in order to ensure a clear separation of duties andfunctions as well as the conflict of interest prevention

• examining and approving transactions of significant strategic,economic, equity-related and financial relevance performed bythe Company

• defining, adopting and amending general guidelines formanaging the Group development policies prior to draftingstrategic, business and financial multi-year plans and operatingbudgets for the Company and the Group

• periodically reviewing said guidelines in relation todevelopments in corporate operations and the externalenvironment and supervising their proper implementation

• approving the corporate structure and governancemodels/guidelines of the Group

• examining and approving transactions of significant strategic,economic, equity-related and financial relevance performed bythe companies belonging to the Group

UniCredit is a companywith shares listed on

the Italian, German andPolish regulated

markets

As Holding Company of abanking Group, UniCredit carries

out organic policy, governance and controlfunctions in addition to banking activities

vis-à-vis its subsidiary banking andfinancial instruments companies

The Group Credit Committee and CEO areassigned the authorities concerning execution

of credit activities withinthe limits and specifications set

forth by the Board

22

Succession planning process

The Executive Development Plan:

embraces all Group Executives in an annual performance appraisal anddevelopment process with both Local and Group Top Management involvement

is strictly linked with the UniCredit Competency Model, which is based on Our FiveFundamentals

ensures the Group sustainability by focusing on succession planning

provides basis for creating individual development paths

In the last edition (2017), ca. 4,300 executives were involved: their appraisals andsuccession plans were discussed and validated by the Group’s Top Managementthrough dedicated EDP sessions

Executive Development Plan (EDP) is the process currently in place aimed atenhancing the quality of our Succession Pipeline for our Group Sustainability

The EDP sessions allow meaningful people discussion and calibration wherebusiness needs are the drivers of the process

The outcome of the Process,including possible successors for the Top Executive

positions, are submitted to theCorporate Governance, Nomination and

Sustainability Committee and to theBoard of Directors

Succession plans that result from the EDPsessions are the basis for the evaluation of

possible candidates in case of newappointments, eg. if an anticipated or

unforeseen replacement of Executives isneeded

Self-assessment process(on the Board of Directors and its Committees)

self – assessmentprocess

in compliance with the provisions contained in the Bank of ItalySupervisory Regulations on banks’ corporate governance, and alsopursuant to the provisions of the Italian Corporate Governance Code forlisted companies

undertaken by the Board at least annually

focused on the adequacy of the Board and its Committees in terms ofcomposition and functioning, tangibly measured in specific theme-basedareas, with special reference to those relevant to healthy and prudentmanagement

The process is undertaken with the assistance of an external consultant chosen, taking into account his/her skill, the professional experience acquired by him/her in corporategovernance, and the need to be neutral, objective and independent in judgment – the hallmarks of the self-assessment process

Overall, the Board has made significant progress on most of the actions agreed upon at the end of the 2016 Board review. The Board environment and internal dynamics havecontinued to improve; in 2017, compared to previous years, the Board focused more on core business topics that required discussions and decisions at Board level.

Among the relevant aspects that clearly emerged from the 2017 Board review: the Board succeeded in approving important changes of the governance rules; the Chairman has been instrumental in building consensus across the Board, especially on decisions that have affected the future Board composition; the CEO has continued to drive the execution of the Transform 2019 Strategic Plan and demonstrated receptiveness to constructive challenge and strengthened the level of

trust with Board members; the commitment requested of Board members continued to be very significant; Board members’ participation has been high.

In view of the outcome of the self-assessment and of the results of the examination stage, the following areas of improvement were selected: further optimization of the Board agenda and of the allocation of the necessary time to the examination and discussion of key business priorities; review of the Board and Committee calendar and schedule of meetings to optimize Board members’ physical presence; strengthening the Committees’ role to better assist the Board, including the improvement of the information and documental flows to the Board; further development and review of the induction plan for Directors to ensure new board members gain an in depth understanding of UniCredit’s business and of the

relevant regulatory framework; improvement in the organization of off-site meetings with an annual agenda shared upfront and with higher clarity on content and expected output.

1 examination(questionnairesand individual

interviews)

2 assessment of theoutcome of the

process

3 drawing up of theprocess outcome

summary

23

Internal Controls System

Comprises regulations, functions, structures, resources, processes andprocedures in order to ensure that the following aims are achieved:

the implementation of corporate strategies and policies is verified

the risk is within the boundaries set by the bank (Risk AppetiteFramework)

the assets value is protected and losses are covered

Internal Controls System : key element of the overall corporate governance system

Board of Directors defines the internal controls system and risk management guidelines,ensuring that the Group's main risks are identified, measured, managed and monitoredadequately

Internal Controls & Risks Committee supports the Board in its assessment and decision-making activities relating to the internal controls and risks management system

Board of Statutory Auditors oversees the completeness, adequacy, functioning andreliability of the internal controls system

CEO that is supported in managing and overseeing the internal controls system by the GroupRisk & Internal Control Committee, a managerial committee chaired by the CEO himself

Organization of the Internal Controls System based on:

corporate processes are effective and efficient

bank information and IT procedures are safe and reliable

the risk of the bank being involved, even unintentionally, in unlawfulactivities (particularly those related to money laundering andterrorism financing) is prevented

operations conform to law, supervisory regulations, policies,regulations and internal procedures

control bodies and functions; information flows and coordination procedures; GroupGovernance mechanisms

Three-level control functions

24

25

Related parties and associated parties

Global Policy for the management of transactions with persons in conflict of interest

(CONSOB related-parties transactions and Banca d'Italia associated parties transactions)

resolves on the UniCredit Transactions of Greater Relevance and of LesserRelevance with a significant amount, except for the Transactions fallingwithin the competence of the Shareholders’ Meeting

issues opinions on the subsidiaries’ Transactions of Greater Relevance andof Lesser Relevance with a significant amount

receives periodic information flows on the transactions of UniCredit and ofthe Subsidiaries

Board of Directors Role

is involved during the negotiations and the preliminary activities ofUniCredit’s and the subsidiaries’ Transactions of Greater Relevance and ofLesser Relevance with a significant amount, through the receipt of an ad hocinformation flow

issues opinions on the transactions of UniCredit and of the subsidiaries, withregards to the interest in finalizing the transactions as well as on theconvenience and the substantive correctness of the relevant conditions

Related-Parties and Equity Investments Committee Role

Persons in potential conflict ofinterest according to the

applicable laws

at least one of the “relevance ratios”,applicable according to the transactionspecificity, higher than 5%

the transaction value is between € 1 billion and theamount for the "greater relevance transactions"threshold

Transactions of

Greater Relevance

Transactions of Lesser Relevance

with a significant amount

26

CHAIRMAN *

Permanent Auditor

Benedetta Navarra

UniCredit Boardof Statutory

AuditorsGuido Paolucci

Angelo RoccoBonissoni

Permanent AuditorPermanent Auditor

Permanent Auditor*Pierpaolo Singer

Board of Statutory Auditors

The corporate body is, inter alia, in charge of supervising

compliance with laws, regulations and the Articles of Association

the adequacy of the Company's organizational, managerial and accounting structureas well as of the overall functionality of the internal controls system

financial disclosures process, the external auditing of the individual and consolidatedfinancial statements and the independence of the external audit firm

compliance with the provisions contained in the Legislative Decree no. 254/2016 onthe disclosure of non-financial information

Board meeting attendance

partecipazione media 2015 93%

* AUDITOR APPOINTED FROM THE SLATE VOTED BY THE MINORITY SHAREHOLDERS

Board Independence

All as per Corporate Governance Code and TUF

average attendance

Antonella Bientinesi

Gender balanceAge Breakdown

27

Disclaimer

This Presentation may contain written and oral “forward-looking statements”, which include all statements that do not relatesolely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on anumber of assumptions, expectations, projections and provisional data concerning future events and are subject to a numberof uncertainties and other factors, many of which are outside the control of UniCredit S.p.A. (the “Company”). There are avariety of factors that may cause actual results and performance to be materially different from the explicit or implicitcontents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of futureperformance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether asa result of new information, future events or otherwise, except as may be required by applicable law. The information andopinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neitherthis Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with,any contract or investment decision.

The information, statements and opinions contained in this Presentation are for information purposes only and do notconstitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribefor securities or financial instruments or any advice or recommendation with respect to such securities or other financialinstruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, asamended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or anyother jurisdiction where such an offer or solicitation would be unlawful (the “Other Countries”), and there will be no publicoffer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitationto purchase or subscribe for securities in the United States or the Other Countries.

Neither the Company nor any member of the UniCredit Group nor any of its or their respective representatives, directors oremployees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any lossarising from its use or from any reliance placed upon it.

corporate governance overview · 2018-06-11 · the corporate governance standards and best...

Documents