Tiscali 2008 Annual Report Download - page 50

its own Remuneration Committee, as recommended by Article 7
of the Code and relevant application criteria.
The Board of Directors also approved Remuneration Committee
Regulations which envisaged that said committee should
comprise three members, mainly chosen from among the Board
members without executive functions. A Chairman is elected
from among the members, by means of majority vote. The
Committee makes proposals to the Board of Directors for the
remuneration of the Chief Executive Officers and those who
cover specific offices, as well as, upon the indication of the
CEOs, for the determination of the criteria for the remuneration
of the Company’s senior management. The committee is also
responsible for making proposals concerning any stock option
plans of the Company and the related execution. As part of its
functions, the Committee may avail itself of outside consultants,
at the Company’s expense. The Committee meets when it
considers it necessary, upon the request of one or more
members. The provisions of the Articles of Association, in as
far as they are compatible, apply for the calling of said
committee and the business of its meetings.
Up until 28 February 2008, the Remuneration Committee
comprised Director Mario Rosso (Chairman) and Francesco
Bizzarri. One position is vacant following the resignation of
Director Victor Bischoff.
The Committee has discussed a settlement agreement with the
Chief Executive Officer which disciplines the economic aspects
associated with the consensual termination of the management
relationship established between Tommaso Pompei and the
Company. This agreement was analyzed and approved by the
Board on 28 February 2008.
Following the appointment of Mr. Mario Rosso as Chief Executive
Officer, which took place during the Board meeting held on 27
and 28 February 2008, the Remuneration Committee fell from
office and was not re-established until the appointment of the
new Board of Directors on 29 April 2008. During the meeting
held on 12 May 2008, the Board of Directors took steps to
establish its own internal Remuneration Committee comprising
Francesco Bizzarri (Chairman), Umberto De Iulio and Arnaldo
Borghesi.
The Committee expressed an opinion on the fairness of the
management agreement for Mr. Mario Rosso, resolved by the
Board on 12 November 2008.
Following the resignation of the Director Arnaldo Borghesi on
25 February 2009, the Committee currently comprises
Francesco Bizzarri (Chairman) and Umberto De Iulio.
Appointments Committee
As mentioned in paragraph 1.6. of this Report, the Board of
Directors has not deemed it necessary to set up an
Appointments Committee in so far as the list voting system as
defined in Article 11 (Board of Directors) of the Articles of
Association ensures the protection of minority Shareholders'
rights. In addition, the list voting system requires proposals for
the appointment of Directors to be submitted by Shareholders
subject to candidate suitability selection.
Internal auditing
Back in October 2001, the Company formalized the internal
audit organizational set-up. Following the amendments to the
Code of Conduct for listed companies and the suggestions of
Borsa Italiana S.p.A., on 25 March 2004 the Board of Directors
took steps to up-date the organizational set-up of the internal
audit system, on the basis of a proposal made by the Internal
Audit Committee on 24 March 2004. The current internal audit
set-up is in line with the matters envisaged by the principles
and applicative criteria contained in Article 8 of the Code.
Internal audit system
The internal audit system is the set of processes dedicated to
monitoring efficiency of Company operations, the reliability of
its financial data, the observance of laws and regulations, and
the safeguarding of Company assets.
The internal audit system is the responsibility of the Board of
Directors, which sets guidelines for the system and periodically
verifies its adequacy and correct functioning, ensuring that the
main business risks are identified and appropriately managed.
The Director appointed to this task identifies the main business
risks, submits them for the attention of the Board of Directors
and implements the Board’s recommendations by developing,
managing and monitoring the internal audit system. He is
assisted in this task by an Internal Audit Coordinator, appointed
by the CEO on the recommendation of the Internal Audit
Committee. The Coordinator is equipped with all means
necessary to perform this support role.
The Internal Audit Coordinator has no line manager, and reports
directly to the CEO, the Internal Audit Committee and the Board
of Statutory Auditors at least once every three months.
The Internal Audit Coordinator was identified as the person with
operational responsibility for coordinating activities within the
Internal Audit department, since he has no direct line operations
manager and is in possession of the professional skills necessary
to perform his duties as recommended by the Code.
To further reinforce the requirement of independence, the Internal
Audit Coordinator and therefore also the Internal Audit department,
report to the Chairman of the Internal Audit Committee. From an
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