Corporate Governance: What is it?
Corporate governance is defined as the set of instruments, rules, relationships, processes and business systems used to ensure the correct and efficient management of the company, intended as a system that compensates the (potentially divergent) interests of minority shareholders, controlling shareholders and directors of a company. The corporate governance structure therefore provides the rules and processes with which decisions are made in a company, the ways in which the company's targets are decided as well as the manner in which the results achieved are attained and measured.
There are different models of governance depending on the different level of capitalism in which the company operates. The liberal model, typical of Anglo-Saxon countries, gives priority to the interests of shareholders. The prevailing model in continental Europe and Japan also recognises the interests of workers, managers, suppliers, customers and companies.
The rules of Corporate Governance are subject to both the laws and regulations of the legal system of the country in which the company operates and the internal rules of the company. The relationships include those between the stakeholders of the company: the owners (shareholders), managers, administrators, the regulation authorities, employees and the company in a broad sense. The processes and systems are based on mechanisms for the delegation of authority, measuring performance, security, reporting and accounting.
In general, there are three different corporate governance systems that joint stock companies may choose:
The ordinary system, which is typical of Italian tradition and is applicable in the absence of a different statutory choice. This system includes a Board of Directors (a sole Director or a Board of Directors whose number of members, if not provided by the Articles of Association, is established by the Shareholders' Meeting) and a Supervisory Body (the Board of Statutory Auditors).
The dualistic system, typical of the German tradition (where it is the only system used for the administration and control of public limited companies) and which was then introduced in other European countries, such as France, the Netherlands, Finland (in which it is in any case optional) which subdivides the administration of the company between two different bodies: the management board and the supervisory board.
The Management Board should have at least two members who remain in office for no more than three financial years and may be dismissed at any time by the Supervisory Board. They have the same responsibilities as the directors.
The supervisory board must have at least three members who are appointed by the shareholders' meeting for three financial years (the shareholders' meeting also appoints the chairman) and may be renewed in office. The members may be dismissed at any time by the shareholders’ meeting.
The one-tier system, typical of the Anglo-Saxon tradition, in which management is entrusted to a single body, the board of directors, on which a control committee is appointed.
Governance at Hera
Hera subscribes to the principles contained in the new Corporate Governance Law drawn up by the Corporate Governance Committee of Borsa Italiana S.p.A. published in March 2006, which contains a detailed set of recommendations regarding the methods and rules for the management and control of listed companies.
The company is managed by a Board of Directors consisting of 15 members.
The Board of Statutory Auditors, i.e. the corporate body that supervises proper administration, in particular the adequacy of the organisational, administrative and accounting structure introduced by the directors and its actual efficiency, consists of 5 members, of which 3 are statutory and 2 are substitute auditors. Both the members of the Board of Directors and those of the Board of Statutory Auditors remain in office for 3 years, namely through to the date of the Shareholders' Meeting called to approve the Financial Statements as at 31 December 2022.
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