Activity of the board – financial year 2024

Improving the recommendations of the Corporate governance code, according to which the Board of directors must meet on a regular basis, the company by-laws envisage that the Board meets at least on a quarterly basis, and whenever the Chairman considers its necessary or when a request is made by at least one-third of its members or by the Board of statutory auditors.

Comparison with FTSE Mib index

The Board of Directors met 11 times in 2024: five meetings were attended by all the directors while the remaining six meetings were attended by almost all the directors; seven meetings were attended by all the regular auditors, while four sessions were attended by almost all the regular auditors. Meetings of the Board of Directors lasted on average about three hours and 15 minutes.

Also in the financial year 2024, as already noted since 2019, a high attendance of directors at meetings of the Board of Directors (equal to over 95%) is confirmed, slightly higher than the average level of attendance recorded in companies belonging to the Ftse Mib Index.

In accordance with principle XII of the Code, each director has accordingly ensured that adequate time is available for the diligent performance of the duties assigned to him.

The Central Legal and Corporate Affairs Director, in his quality as secretary of the Board of Directors, was present at all eleven meetings.

Meetings of the Board of Directors were attended, upon express request, by the executive managers responsible for the corporate functions to provide insights into the matters of competence placed on the agenda.

Below are the presences of the managers invited to attend the meetings of the Board of Directors:

• the Director of Central Administration, Finance and Control attended six meetings;
• the Director of Central Strategy, Regulation and Local Authorities attended two meetings;
• the Director of Central Innovation Director attended one meeting;
• the Central of Central Personnel and Organization attended two meetings;
• the Director of Central Corporate Services attended one meeting;
• the Director of Shared Value and Sustainability attended two meetings;
• the Central Director of Communication and External Relations attended one meeting;
• the Director of Internal Auditing attended one meeting;
• the Manager of the Consolidated and Tax Financial Statements of the Central Administration, Finance and Control Department attended one session;
• the CEO of Hera Comm Spa attended one meeting.

As regards the current financial year, three meetings of the Board of Directors have been held as at 26 March 2025: two meetings were attended by virtually all members and one meeting was attended by all members. At this date, eight meetings of the Board of Directors have already been scheduled for the remainder of the year.

In 2024, average attendance in the B.o.D. meetings stood at 95%.

This high level of attendance is proof of the strong commitment of the Directors to guiding the company and is above the average figure of the companies included in the FTSE Mib index.

* Source: Report on Corporate Governance in Italy: the implementation of the Italian Corporate Governance Code (2024) di Assonime, published on 12/02/2025

Minimum attendance

The number and attendance of members at the B.o.D. meetings guaranteed the ordinary and extraordinary management of the company, enabling Hera to carry out all the actions required in pursuit of the corporate purposes.

Self  assessment

In application of the provisions of Principle XIV of the Code, the Board of Directors periodically evaluates the effectiveness of its activities and the contribution made by its individual members through formalized procedures whose implementation it oversees.

More specifically, in line with Recommendation 22 of the Code, the Board of Directors annually carries out, with the support of an independent external advisor expert in governance and advisory services to the boards of directors, a self-assessment on the size, composition and functioning of the Board itself and its Committees, also considering the role it has played in defining strategies and monitoring the performance of the management and adequacy of the internal control and risk management system, as required by Recommendation 21 of the Code.

This evaluation was carried out in 2025 with the support of Management Search Srl, a consulting company appointed for this purpose; most recently, it was presented and discussed at the Board of Directors meeting on 26 March 2025.

The methodology used for the evaluation process was as follows:

1. completion - by the Directors and the Chairman of the Board of Statutory Auditors - of an on-line interview questionnaire, with subsequent conduct of an individual interview to deepen the topics reported in the questionnaire.
1. The questionnaire examined the following topics: (i) the structure and composition of the Board of Directors; (ii) the functioning of the Board; (iii) the adequacy of the time devoted to the discussion of issues relevant to the Company; (iv) the functioning of the Committees; (v) relations with top management and knowledge of the same by the Directors; (vi) the opinion expressed by the Directors on the work they themselves carried out within the Board of Directors and on their contribution to the Board debate and decision-making process; (vii) sensitivity to ESG and sustainability issues and principles, as well as the dissemination/integration of these issues into the corporate organization and business. Each question in the questionnaire could be answered through different levels of consensus;
2. sample examination of the company documentation (i.e. the minutes of the 2024 meetings of the Board of Directors and Committees). The examination revealed that the overall functioning of the Board of Directors and the Committees adhered to the indications and requirements contained: (i) in the regulatory provisions applicable to issuers; (ii) in the Corporate Governance Code; (iii) in the internal regulatory framework adopted by the Company (Bylaws, Code of Ethics, regulations and internal procedures);
3. benchmarking, comparing Hera Spa data with those of ten listed Italian companies operating in the energy sector.

The results revealed a positive picture of the functioning and composition of the Company’s Board of Directors and Committees.

This was confirmed by the high level of consensus (around 90%) expressed by the directors on several macro-areas of interest (size, composition and diversity of the administrative body, organization and decision-making processes, flow of information and training, climate and team spirit, commitment and strategic support to top management, operation of the Committees) and the absence of topics with low levels of consensus.

In particular, as part of the self-assessment activity:

• on the composition of the Board of Directors

• the current number of directors was considered appropriate overall and the ratio of executive/non-executive/independent directors was well balanced and appropriate. The professional skills mix in the Board is considered to represent a good professional heterogeneity and is appropriate;
• the division of powers (between Executive Chairman and Chief Executive Officer) and the balance of powers (Board supervision and management of delegated entities) were considered adequate;

• on the functioning of the Board of Directors

• the attendance rate at Council meetings was high (95.2% average attendance);
• the time devoted by the Board to issues relevant to the Company was considered adequate and all the directors acknowledged the high quality of the discussions on the issues addressed;
• it was recognized that the Secretary of the Board of Directors and the Corporate Secretariat have provided valuable support to the work of the Board, receiving the unanimous appreciation of the Directors (both for the specialist skills demonstrated and for the effectiveness in managing organizational aspects);
• the information and documentation provided by the Company Secretariat was deemed complete and of high quality; the minutes of the meetings clearly and punctually reported the progress of the debate, and the pre-meeting documentation and minutes of the meetings were received in a timely manner, ensuring adequate preparation for the meetings;
• the in-depth sessions on business issues were unanimously appreciated by the Directors; the Board of Directors received complete and timely information on the areas of greatest strategic importance for the Company and the pre-board documentation was deemed by all Directors to be complete, clear and well structured;
• the atmosphere that characterised the work of the Board was deemed quite favourable in terms of collaboration and interaction between the directors;
• the Executive Chairman, thanks to his in-depth knowledge of the Company and the sector, plays a central role within the Board and exercises a decisive function of driving its operation;
• the interaction between the Board of Statutory Auditors, the Board and the other bodies was considered constructive and well balanced;

• on strategy and objectives

• it was considered that the Council had adequately examined in depth and discussed the main issues of strategic importance;
• the majority of Directors considered that the strategic issues submitted to the Board of Directors were normally presented in a clear and complete manner;
• the majority of the Directors were satisfied with the work carried out by the Board of Directors as a whole, as regards the contribution to the definition of the main strategic guidelines of the Company;

• on risks and related controls

• it has been recognised that risk control and management are issues of primary importance to the Group and that the internal control and risk management system is deemed to be efficient and effective;

• relationships with management

• the relationship of the Executive Chairman and the CEO with the Board of Directors was considered very open and constructive;
• the Board members’ interaction with management is continuous and presentations to the Board by top management are clear and useful;

• functioning of the Committees

• the evaluation of the composition and functioning of the committees was positive, and the organisation of the Committees was also found to be appropriate;
• the members of each Committee believed that the respective meetings were of an adequate frequency and duration in relation to the tasks and topics dealt with;

• on ESG and sustainability issues

• the great importance of ESG and sustainability issues was recognised by the entire Board of Directors, and the topics that will be a priority for the Group were underscored (care for the environment and the territory, reduction of greenhouse gas emissions, carbon neutrality, further disclosure of the sustainability goals achieved, sustainability as an integral part of the Company’s value chain);

•  on Dialogue with Shareholders and Bondholders

• the Dialogue with most Shareholders and Bondholders is deemed to take place in an appropriate manner.

The following area for improvement emerged from the Board’s assessments:

for some Directors, the level of participation and active contribution to the debate by all could be improved, in order to better enhance the mix of skills contained within the Board of Directors.

To this end, the actions suggested by some Directors are, in particular:

1. to encourage maximum participation of Directors in in-depth sessions;
2. to increase the involvement of all Directors on very relevant issues, such as the Guidelines of the Business Plan, providing when possible for a dedicated meeting before the Board of Directors; and
3. to increase disclosure regarding the benchmark with competitors, market information and economic and financial data.

In the past year the Board has acted as precise control over financial activities, specifically overseeing all the operations, services supplied to customers, M&A processes and especially it guaranteed that all activities and relations with stakeholders were carried out with the greatest respect for sustainability policies and following an approach oriented to the creation of shared value.

All the initiatives carried out by Hera in order to support the global UN agenda are submitted to the attention of the Board of Directors.

In order to pursue an effective deliberative activity, the Executive Chairman and the CEO have worked throughout the year 2021 to assure that the Board of Directors was informed about the main legislative and regulatory changes related to the Company and to the corporate bodies, as well as on most relevant topics related to Group’s business.

Page update 26 June 2025