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Governance Best Practice

Since its establishment Hera has been following a path of excellence, in a continuous and transparent dialogue with the financial market, which aims to create value for the stakeholders.

The Group undertook actions in order to improve its corporate governance, both specific and as part of Board meetings, in line with the international best practice. Since 2014, the Group has intensified this activity in order to ensure that directors acquire adequate knowledge of the main issues related to the company as quickly as possible.

Strategic induction to Board of Directors

Every three years, following the regular renewal of Hera SpAís Board of Directors, the Executive Chairman and the CEO organise a period of induction designed for the newly appointed Directors and Auditors, as foreseen by Borsa Italianaís Code of Conduct.

The activities are generally carried out during 3 sessions, organised between May and June, within which the companyís top management provides in-depth materials concerning the sector in which the company operates, its internal dynamics and development over time, as well as the principles of correct risk management, the applicable regulatory framework and elements of self-regulation.

The procedure is aimed at allowing new Directors and Auditors to grasp the complexity of the Groupís activities, so that they are able to immediately fulfil their institutional role in an optimal way.

The meetings, which are backed up by a well-structured and detailed documentation, are highly appreciated and have become a stable component of the mix of tools involved in managing the Groupís Governance.

Induction activity in 2018

As in the past, the Board of Directors has set up opportunities for in-depth discussions, both specific and within meetings of the Board, intensifying this process in order to ensure that directors acquire adequate knowledge of the main issues concerning the Company as quickly as possible.

Already in previous years, specific induction sessions were carried out to provide directors with adequate knowledge of the main sectors of activity (networks, energy and the environment), and various opportunities were provided for in-depth analysis, within the meetings of the Board of Directors, regarding business issues, investments, organisation, the market scenario, regulatory developments, upcoming tenders scheduled, and risk management.

In 2018, the induction plan and refresher sessions on business issues, finance, strategic direction, sustainability and social responsibility, waste disposal and communication with local communities continued.

In particular, visits were organised to the Group's plants and production sites while in-depth analyses were carried out on corporate mergers, market analyses of the plastics sector, future scenarios for the Group's activities in relation to public contracts, management of the integrated water cycle, share performance, management of the Group's financial risks and the 17 UN global objectives for sustainable development.

Further in-depth focus sessions were carried out during 2018 Strategy Day as an opportunity to reflect collectively on the future with the support of management, an event which included a session dedicated to peers' strategic initiatives and their potential impact on the sector and the Group.


UN Global Compact, Art. 10

Businesses should work against corruption in all its forms, including extortion and bribery.
Hera answers the call to action

Companies face high ethical and business risks and potential costs when they fail to effectively combat corruption in all its forms. In order to answer the UN Agendaís call to action, the Group carries out anti-corruption measures as part of its mechanisms to express corporate sustainability and to protect its reputation and the interests of their stakeholders, creating shared value.

Following the introduction of legislative decree 231/2001 into Italian regulations for legal entities' responsibilities for certain offences committed in the interest or to the advantage of said entities by people charged with representing, administrating or managing the entity in question, as of February 2004 Hera has adopted the organisation and management model described in legislative decree 231/01 (the "Model 231").

The same date also saw the approval of the Ethical Code (now at its 4th revision), which contains the Groupís principles of "corporate deontology", and the nomination of the Supervisory Body (SB) as the subject provided, in particular, with powers including initiative and control.

On 6 December 2004 the Hera S.p.A. Board of Directors initially approved 17 protocols, one for each single "sensitive area".

The Model was updated most recently on 17 December 2014 and the respective protocols, of which 22 currently exist, have repeatedly been revised.

The "Model 231" adopted, which covers the entire Hera Group, foresees that persons involved in sensitive processes be informed and trained in order to provide them with knowledge of forbidden and obligatory behaviour, creating an awareness of "ethical" behaviour and promoting a group mentality in the way corporate risks are managed.

Every three years, a document containing analyses of the risk factors and possible critical situations (Risk Assessment) for the entire Group is drafted, along with a correlated revision plan.

The specific risks dealt with by 231 issues are defined by the SB in an Audit Plan that takes into consideration risk analysis, the possibility of extending Model 231 to additional Group companies, any changes that may occur in activities and processes in which "231 area" companies are involved, and updates to regulations.

One essential part of the model is the half-year examination carried out by the Supervisory Body of the flow of information concerning activities that are at risk.

The Supervisory Board met on 7 occasions in 2018. All the members took part in 6 of these meetings, while almost all of them took part in the remaining 1.

The average length of the meetings of the Supervisory Board was approximately one hour.


Controversies related to diversity, opportunity or wages working condition

As at 27 March 2019 Gruppo Hera was not involved in controversies related to diversity, opportunity or wages working condition.

Diversity and Opportunity Controversies nonenonenonenone
Wages Working Condition Controversies Countnone nonenonenone

Page updated 12 April 2019

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