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 SpA’s 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 the Corporate Governance Code.
The activities are generally carried out during more sessions, organised between May and June, within which the company’s 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 Group’s 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 Group’s Governance. 

Induction activity in 2023

As in the past, during the last financial year in-depth analysis was carried out in order to ensure that Directors had adequate knowledge of the main issues concerning the Company.

Specifically, after the renewal of the administrative body, during 2023, the in-depth focuses concerned the environment supply chain (collection and sweeping - treatment and recovery), the district heating and energy supply chain (sale and production of energy and energy services) and the networks supply chain (gas and electricity distribution, integrated water cycle).
Furthermore, during 2023, emphasis was placed on in-depth discussion at Board meetings aimed at providing Board members with adequate knowledge of the main characteristics of the Company (governance and sustainability), of the results the Group has achieved in recent years, of the elements of the Business Plan and CSV strategy, as well as human resources, financial management and risk management, with specific in-depth analyses of the individual sectors a focus on the other services and activities carried out by the Group in terms of innovation front (specifically photovoltaics, agrivoltaics and production of green hydrogen and biomethane). As regards stakeholders, an overview of the activity of the local advisory councils (HeraLAB) was also provided.

Topics relating to climate and sustainability, the recommendations of the Task Force on Climate-Related Financial Disclosures (TFCD) and the SBTi (Science Based Target) initiatives were examined.
In relation to the energy scenario, updates were provided on the price trend of energy commodities, on the markets of last resort and on the performance of the Hera stock.
As regards the climate scenario, an update was provided on the actions implemented by the Hera Group in response to the flood-related events in Italy.
With reference to the National Recovery and Resilience Plan, among other issues, project proposals were presented - funded, in part or in full, by the Plan itself - relating to the strengthening of the Ferrara geothermal plant - district heating and, for AcegasApsAmga, the paper and plastic pre-treatment plant. 

Furthermore, in-depth analyses were carried out regarding risk assessment, the progress of the cyber security management plan, financial risk reports as well as investments.
The periodic reports of the Risk and Control Committee were illustrated.
Evaluations were then carried out on the recommendations of the Chairman of the Corporate Governance Committee.
In 2023 as well, further in-depth analysis was also carried out during strategy day, as a moment of collective reflection on the future of the Company, with the support of Management.
The issue of gender equality was also analysed, which led to the adoption of the Hera Group’s Gender Equality Policy, as well as the signing of the Self-Regulatory Code of Responsible Companies in Favour of Maternity, promoted by the Ministry for the Family, Birthrate and Equal Opportunities and aimed at supporting birthrates and gender equality in every workplace.
Furthermore, visits to the Group’s plants were organised, specifically to the waste-to-energy plant and geothermal wells in Ferrara and the cogeneration plant in Imola.
In-depth analysis will also continue during 2024.

The compliance system for the prevention of corruption and fraud

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 Agenda’s 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.

Importance for the Hera Group and monitoring of this aspect

Corruption and fraud pose a significant risk to business activities as they can significantly compromise the company's reputation and image and cause significant financial damage. HERA promotes the combating of corruption by taking a “zero tolerance” stance towards corruption and fraud in any form, reiterated both in the Code of Ethics, updated in 2019, and in the Corruption prevention model. Furthermore, Hera Spa, again in 2019, obtained Iso 37001 certification for the Management system for the prevention of corruption.

Hera's commitment applies to both employees and third parties (e.g. consultants, suppliers and business partners), through appropriate preventive measures, a disciplinary system and specific ethical clauses that all employees and third parties must accept and adopt.
Hera has adopted a structured compliance system consisting of tools and policies designed to prevent and combat active and passive corruption, in addition to the matters envisaged in the Group's Code of Ethics and the 231 organisational model.

Hera’s anti-corruption system comprises the following:

• the Code of Ethics;
• the Quality and sustainability policy;
• the Corruption prevention model that supplements the existing 231 Organisation Model, which already covered the types of corruption included in Italian Legislative Decree no. 231/2001;
• guidelines for the prevention and management of fraud;
• periodic audits and training activities with a view to corruption and fraud prevention;
• “whistleblowing” system for the handling of reports relating to offences concerning both corruption and those potentially significant for 231-related purposes.
• ISO 37001 certification for the prevention of corruption

Organisational model pursuant to Legislative Decree no. 231/2001

Legislative Decree 231/2001 introduced into Italian legislation the administrative liability of legal entities, companies and associations. Specifically, the law introduced the criminal liability of entities for certain offences committed in the interest or to the advantage of those entities by persons fulfilling roles of representation, administration or management of the entity or of one of its organisational units with financial and operational independence, or by persons who exercise management and control thereof, including on a de facto basis, and lastly, by persons subject to the direction or supervision of one of the above-mentioned parties. Significant offences are those committed against Public Administration and corporate offences committed in the interest of the companies.

However, Articles 6 and 7 of Legislative Decree No. 231/2001 provide for a form of exoneration from liability where (i) the entity proves that it adopted and efficiently implemented, prior to the commission of the act, appropriate organisational, management and control models for preventing the perpetration of the offences considered by the said decree; and (ii) the duty of supervising the functioning of and compliance with the models, as well as providing for their updating, is assigned to a body of the entity that is vested with autonomous powers of initiative and control.

To this end, on 16 February 2004, the Board of Directors of Hera Spa approved and subsequently updated the organisational model, also in the light of the provisions introduced by Legislative Decree No.  231/2001, with the aim of creating a structured and organic system of control procedures and activities to prevent commission of the offences referred to in the aforementioned decree, by identifying the activities exposed to a risk of offence and implementing suitable procedures for those activities.

The issues being updated, in line with developments in legislation and jurisprudence, concerned specifically:

• the list of 231 offences including the most recently introduced ones, brought into line with the list set out in Legislative Decree no. 231/2001;

• the enhancement of references to the Hera Group's Code of Ethics, now in its sixth edition, approved by the Board of Directors on 8 March 2023, which is a fundamental pillar of the Model for the purposes of preventing offences;

• The insertion of references to the Model for preventing corruption and regulating the procedures for reporting offences (whistleblowing), already covered by specific protocols.

The updating of the General Section of the Organisational, Management and Control Model, aimed at incorporating regulatory updates in a continuation of the previous revision of the document, is therefore designed to consolidate and further strengthen the Model’s effectiveness in preventing offences and exempting the Company from liability.

The Group is sensitive to the need to ensure conditions of fairness and transparency in conducting business and corporate activities, to guarantee that the needs of the community are met and to protect the Group’ s position and image, the expectations of its shareholders and the work of its employees. Moreover, the Group is aware of the importance of an internal control system capable of preventing unlawful conduct by its Directors, employees, external collaborators and business partners in general.
The Model has been adopted in the conviction that - beyond the provisions of Decree 231, which identify it as an optional and not compulsory tool - it constitutes a valid instrument for raising the awareness of all those who work in the name of and on behalf of the Group companies, so that they behave in a correct and straightforward manner in performing their activities, thereby avoiding the risk of committing the crimes envisaged by the Decree.

At present, the organisational, management and control model pursuant to Legislative Decree No. 231/2001, available on the website www.gruppohera.it under the “Governance/Internal-Auditing section”, includes 27 protocols, implemented over time and relating to individual sensitive areas, which aim to ensure transparency and a sense of responsibility in internal relations and with the outside world.
For each process at risk, the protocols identify principles, roles and responsibilities to be followed in managing the activities and define the periodic information flows used to control them.
Each protocol ensures that the Supervisory Body engages in constant monitoring of activities at risk.
The procedures adopted incorporate the principles of the Code of Ethics in order to guide Group management according to the values and operating principles defined in the Charter of Values.
Risk factors and critical issues were identified and weighed through risk assessments carried out on the Group’s business areas and infrastructure processes. The specific risks inherent in these 231 areas are defined by the Supervisory Body in an annual auditing plan that takes into account risk assessments, the coverage of new processes, regulatory developments and the extension of the scope of activities of Group companies.
The model involves establishing an ongoing legal compliance check, drafting the Audit Report on the effective implementation of the protocols in Group companies falling within the 231 scope, providing assistance with drafting re-entry plans in adopting the recommendations outlined in the report, and carrying out specific follow-ups to verify that re-entry plans have been implemented and the critical points highlighted have actually been resolved.
The model entails an informative and training component that targets the persons involved in sensitive processes in order to raise awareness about prohibited and mandatory behaviours, create awareness of the related ethical behaviours and promote a Group culture for managing corporate risks.

An integral part of the Model is the Supervisory Body’s bi-annual examination of the information flows concerning activities at risk.
The risk analysis document with its related audit plan is drawn up for the whole Group every three years, the last of which refers to the period 2022-2024.

The organisational, management and control model pursuant to Legislative Decree No. 231/2001 has also been adopted by subsidiaries with strategic importance.

The Board of Directors has also instituted the Supervisory Body, approving its regulations:
This body, renewed lastly on 10 May 2023 and currently, in line with the provisions of Recommendation 33 letter e), made up of an external member with the role of Chairman, the Legal and Corporate Central Director of Hera Spa, and the Internal Auditing Director of Hera Spa, has the specific task of periodically reporting to the corporate bodies of the Parent Company regarding implementation of the organisational model pursuant to Legislative Decree 231/2001 and will remain in office until the date of the Shareholders Meeting approving the financial statements as of 31 December 2022.
The Supervisory Body met on seven occasions in 2023 and all these meetings were attended by all the members. The average length of the meetings of the Supervisory Body was approximately one hour.
The Supervisory Body approved and updated the 231 protocols that make up the organisational model, examined the system of information flows that allow it to supervise the functioning and observance of the models and examined reports made following audits, as well as consulting legislative developments pursuant to Legislative Decree 231/2001 and planning additional activities.
The Supervisory Body draws on the operational support of the Internal Auditing Department of Hera Spa To carry out the verification and control activity, the Supervisory Body has prepared an action plan to verify compliance with the protocols adopted.
Regarding the current financial year, one meeting of the Supervisory Body was held as of 26 March 2024: all meetings were attended by all members. As of that date, an additional six meetings of the Committee had been planned for the remainder of the year.

ISO 37001 Corruption prevention model | Anti-bribery and corruption model

In the course of 2019, Hera Spa obtained ISO 37001 anti-bribery certification, the validity of which was confirmed by the Certifying Body following the maintenance audit carried out in July 2022. The Hera Group has consequently adopted an anti-bribery management system (ABMS) that is integrated into the organisation, management and control model pursuant to Legislative Decree 231/01, the foundations of which are rooted in the principles and values set forth in the Code of Ethics and in the quality and sustainability policy.

Along these lines, the Group has set up an anti-corruption model which involves establishing a Compliance Department for the reduction of bribery that coincides with the Supervisory Body, to oversee the anti-bribery management system.

The main responsibilities/functions of the Corruption Prevention Compliance Department are:

1. overseeing the design and implementation and implementation of the Anti-Bribery Management System;
2. providing advice and guidance to staff (defined as employees at all levels and persons assigned positions of collaboration, including internships and traineeships) about the Anti-Bribery Management System and corruption issues;
3. ensuring that the Anti-Bribery Management System complies with the requirements of UNI ISO 37001;
4. reporting on the functioning of the Anti-Bribery Management System to the Board of Directors and top management.

Hera Group top management and management staff are personally committed to respecting the anti-corruption model, including by carrying out awareness-raising and dissemination activities for the principles of the rules aimed at preventing instances of bribery in their own departments.

The anti-corruption model concerns everyone who works for the Hera Group. In 2023, the Model was also integrated with topics relating the prevention of corruption.
With the December 2021 approval of the revision of the Organisational, Management and Control Model in accordance with Legislative Decree 231/2001, the Hera Group renewed its commitment to combatting bribery, corruption and all offences relating to Model 231 and to preventing situations where there is a risk of such offences being committed.
A system is in operation for reporting crimes, misdemeanours, or alleged violations of Model 231 or the Anti-Corruption Model, known as whistleblowing, via a portal (reports.gruppohera.it) or a written report, which allows anonymous submissions, in compliance with privacy regulations and current legislation. Also during 2023, in compliance with Legislative Decree 24/2023, the whistleblowing protocol was updated, introducing all the adjustments required by the decree.

Controversies related to diversity, opportunity or wages working condition

As at 26 March 2024 Gruppo Hera was not involved in controversies related to diversity, opportunity or wages working condition.

Page updated 30 April 2024