Tiscali 2008 Annual Report Download - page 51

CORPORATE GOVERNANCE REPORT
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administrative standpoint, the Internal Audit Coordinator and
therefore the Internal Audit department, report to the CEO. The
provision of suitable means required by the Internal Audit
Coordinator and therefore the Internal Audit department, is
included in the CEO’s executive powers. The Internal Audit
Committee, in reviewing the work plan submitted by the Internal
Audit Coordinator, also assesses the suitability of the means
granted by the CEO to the Internal Audit Coordinator, based on
the number of Internal Auditors and their responsibilities and
qualifications in relation to the specific work plan.
During the period covered by the previous Report, the main
activities carried out with regard to the internal audit by the
Coordinator, the Committee and the Internal Audit department,
were as follows:
•use of a qualified expert for the review of the “Organization,
management and control model” for the main Group
subsidiaries (Italian Legislative Decree No. 231/2001), for
the purposes of assimilating the new offences introduced by
Italian Law No. 146/2006 (transactional offences) and Italian
Law No. 123/2007 (violations of accident-prevention norms).;
•upon appointment received by the Executive for the drawing
up of the accounting documents, the Internal Audit Division
took steps to check the adequacy of the administrative and
accounting procedures for the formation of the 2008 financial
statements for the purpose of assessing the related efficacy.
These activities also had the aim of obtaining the issue of
the certification pursuant to Article 154 bis of the Italian
Finance Consolidation Act, introduced by Italian Legislative
Decree No. 262/2005 as amended by Italian Legislative
Decree No. 303/2006 et seq.;
•during 2008, the test period continued for the checks
pursuant to Article 154 bis of the Italian Finance Consolidation
Act, introduced by Italian Legislative Decree No. 262/2005
relating to the 2008 financial statements, which were carried
out on the Group’s most important subsidiaries.
On the basis of the checks carried out, the Board of Directors
deemed the internal audit system to be adequate for the
Company’s needs, as well as in line with current legislation and
the Code’s recommendations.
Internal Audit Committee
In accordance with the recommendations of the Code, the Board
of Directors has set up an Internal Audit Committee to provide
advice and recommendations, comprising non-executive Directors,
one of which is independent. Committee meetings are attended
by the Chairman of the Board of Statutory Auditors or another
Statutory Auditor designated by the Chairman.
In particular, the Internal Audit Committee is responsible for:
a) helping the Board of Directors to set guidelines for the
system and periodically verify its adequacy and correct
functioning, ensuring that the main business risks are
identified and appropriately managed;
b) assessing the work plan prepared by the Internal Audit
Coordinator and receiving the Coordinator’s periodic reports;
c) together with the Company’s Directors and auditing
company, verifying adequacy of the accounting standards
used and their uniformity for the purpose of drafting the
consolidated financial statements;
d) assessing bids submitted by auditing companies for the
role of independent auditor, and the proposed work plan
for the independent audit and the results expressed in the
report and letter of recommendations, along with the day-
to-day contact with the independent auditing firm;
e) assessing bids of an advisory nature formulated by the
independent auditing firm - or its affiliated companies -
in favour of Group companies;
f) assessing bids of an advisory nature in favour of Group
companies that are for significant amounts;
g) reporting to the Board of Directors on tasks performed
and on the adequacy of the internal audit system, at least
once every six months on approval of the annual and half-
yearly reports;
h) performing additional tasks as assigned by the Board of
Directors.
The Internal Audit Committee is a sub-group of the Board of
Directors, its sole function being to advise and recommend.
Its objective is to improve the effectiveness and strategic
guidance capacity of the Board of Directors with regard to the
Internal Audit system.
Based on the model adopted by the Company, the Internal Audit
Committee has two members. They must be non-executive
Directors, and as such are entitled to provide independent,
impartial opinions on topics for which they are responsible, since
they have no first-hand involvement in running the Company.
One of the members is qualified as independent; in fact, should
it not be possible to guarantee that the composition of the Internal
Audit Committee has a majority of non-executive and independent
Directors, the Committee will have just two members, including
at least one who is independent. This solution is preferable to
having a majority of non-independent Directors, albeit temporary.
If for a certain period the Internal Audit Committee is composed
of two members only, the entire Board of Statutory Auditors is
always invited to attend committee meetings. In addition, during
the period the Committee membership is reduced to two members