Governance

The values and ethical principles that guide the Group in the fulfilment of its business activities are rooted in a heritage established over time. The key values, which must be reflected in conduct of all those who work in our company, are:
  • moral integrity, personal honesty and fairness in internal and external relationships;
  • transparency towards shareholders, stakeholders and the market;
  • respect for employees and the commitment to enhance their professional skills;
  • social commitment;
  • the protection of health, safety and the environment.
     

ERG Group principles and international development

As a result of the continuous international development of ERG Group, we felt that it was necessary to simplify the communication of the Groups principles to overseas companies and their local counterparts: the Code of Ethics was therefore translated into English and French. All of the overseas companies of ERG Group have adopted this document, which was also approved by the joint venture LUKERG Renew in 2013. The Model 231 was translated into English and published on the Group's website www.erg.it. In 2013, all overseas companies approved the Anti-Corruption Guidelines issued by ERG, which follow the principles of conduct in line with those already set out in the Model 231.

In particular, the management of ERG business activities must comply with the principles of conduct that apply to:
  • the principles set out in the code of ethics;
  • separation of duties;
  • the allocation of powers;
  • transparency and traceability of processes;
  • appropriateness of internal rules:
  • the training of employees;
  • job rotation

Our Committees


Our Corporate Governance System adopted requires setting up specific board committees (Control and Risk Committee, Nominations and Remuneration Committee, Strategic Committee) and internal committees (Corporate Committee, Investment Committee, Risk Committee, Human Capital Committee, Business Review Committee, Leaders Meeting, Sustainability Committee) tasked with studying issues, providing advice and/or making proposals on matters that are particularly relevant economically, fi nancially and strategically, to enable an exchange of opinions and a series of checks on those topics, so that the Board of Directors can take informed and clearly represented decisions.

These committees concur in the defi nition of the methods for measuring, identifying, assessing and controlling risks, and they provide advice and make proposals to the Chief executive officer in relation to:
definition of risk management strategies and policies;
assessment of the most relevant transactions and analysis of the associated risks;
monitoring the progress of the most relevant transactions and verifi cation of the enforcement of risk management policies.

Anti-Corruption: one of the Group's fundamental principles

Anticorruption Governance in Italy and Abroad

We have chosen to conduct our business according to the highest national and international Corporate Governance standards: we are therefore committed to apply and rigorously respect the principles of lawfulness, integrity, impartiality and transparency. These principles are even more important when we
must deal in practical terms with the problem of corruption.

This is a global phenomenon, which irreparably destroys the integrity of companies, both public and private, and against which national and supranational institutions increasingly concentrate their preventive and repressive efforts.

Amongst the Anti-corruption tools, the Model 231 (for companies under Italian law) and the Anti-corruption Guidelines (for companies
under foreign laws) are the most important; both documents were drafted according to the guidelines of the Group's Code of Ethics.

In 2016, in view of the Group's increasing operations abroad and the growing need to prevent corruption, we carried out a study on the anti-corruption regulations applied in the countries of interest, to assess the advisability of improving our current Anti-corruption Guidelines.

In 2017, we will carry out a new risk assessment to update the activities performed by the companies that do business abroad, and which expose them to corruption risk and on that basis we will consider changes and/or additions to the above-mentioned Guidelines. After completing the analysis, we will set up specific training for our personnel.

Model 231 and Anti Corruption Guidelines

The principles of this Model are based on our Code of Ethics and ensure that our day-to-day business is managed in a correct, transparent and traceable manner.

The general part:
• defines the overall structure of the Model in relation to the content of the decree and the specific aspects of the company's business;
• describes the offences and sanctions set out in the decree;
• identifies the Supervisory Committee of the Company and defines its responsibilities and powers;
• defines the training and information activities and the system of sanctions to be applied in case of violations.

The special part defines the rules to be followed in the context of the sensitive activities carried out.
The Supervisory Committee is tasked with overseeing the observance of the Code of Ethics and guaranteeing the implementation of the Model (for example by implementing specific information flows and on the basis of the outcome of Model 231 and audit monitoring programmes), as well as identifying the need for
subsequent updates.

In this context, during 2016, ERG Hydro (the owner of hydroelectric assets) adopted its Model 231 and the Models 231 of some of the Group's companies were updated, also in order to simplify their structure and make it easier for the risk owners to apply them and comply with them.

 

Supervisory Committee and Reporting

The Supervisory Committee (SC) required by Legislative Decree 231 is vested with independent powers to act and monitor, on the respect and updating of the Organisation and Management Model and the Code of Ethics.

Specifically, the Supervisory Committee of ERG S.p.A. consists of 3 members, of whom one is an external member and two are members from within the Company (of which one is the head of Internal Audit). The Supervisory Committee is chaired by the external member, who is chosen among individuals that can contribute their specific legal, economic, financial or technical experience. The presence of an external member and of the head of Internal Audit ensures the Supervisory Committee's effective independence from the corporate hierarchy.

When the Board of Directors appoints the SC, it must provide the grounds of the independence, autonomy, the reputation and professionalism of its members. The term of office of its members is no more than three years; the SC's term expires in any case when the term of the Board of Directors that has nominated the Committee expires, and its members can be confirmed in their positions.

The Subsidiaries under Italian Law, that are directly or indirectly controlled by ERG S.p.A. also have their own SCs.

The compliance activities of the Supervisory Committees, and the Law 231 Compliance structure that supports it, abide by the Confindustria Guidelines and by the recommendations of the Supervisory Committee Association that, by issuing position papers, provides methodological guidelines and best practices.

Each Supervisory Committee has its own email address, set up to receive any reports from both inside and outside the organisation.

Such reports may include, without limitation, violations of the Code of Ethics, of the Model 231 or of the internal procedures on topics related to controls that are relevant to the prevention of the offences covered by the decree.

The Supervisory Committee must keep confidential all reports received and protect the reporting party against any possible retaliation.
 

Training on Model 231

In 2016, we implemented on-line training for newly-recruited staff, focusing on the Code of Ethics and the Model 231 adopted by the Company to which they belong.
Both training modules include a final test which must be passed. In 2016, we organised training sessions on the Code of Ethics and on the 231 compliance issues for all the hydroelectric business personnel (approx. 110 people, managers included). The training programme included a final test.