Responsibilities, powers and independence

Our Board of Directors has general powers of guidance and control over the activity of the Company and on the running of the business. It manages the enterprise, pursuing the prime aim of creating value for the shareholders, taking into account the continuity of the Company over time, and takes the decisions that are necessary to achieve the Company’s goals.

The Board as a whole is entrusted with providing strategic guidance and is responsible for direct intervention in the most important decisions affecting the activity of Telecom Italia and the Group. Among other things, the Board has the following functions:

• examining and approving strategic, business and financial plans and the budget
• examining and approving strategic transactions
• verifying the adequacy of the organizational and administrative structure, with special reference to the internal control system
• drawing up and adopting the Company’s corporate governance rules and establishing Group corporate governance guidelines
• specifying the limits to delegated powers, the manner of exercising them and the frequency with which bodies with such powers must report on the activity performed in exercising them
• nominating the Chairman and Chief Executive Officer of strategic subsidiaries
• assessing the overall performance of operations and periodically comparing the results achieved with those planned.

The assessment of operational results is based on a constant flow of information to the non-executive directors and the statutory auditors, coordinated by the Chairman of the Board of Directors. This assessment is made during the Board’s examination of the various financial reports by means of a detailed comparison of the results achieved and the objectives set in the budget.

The Board of Directors also assesses the adequacy of the organizational, administrative and accounting structure of the Company. In this regard the Board avails itself of:

• information provided by the management
• reports by Internal Control and Corporate Governance Committee
• the person responsible for internal control, chosen from within the internal auditing function, which is entrusted to the consortium company Telecom Italia Audit & Compliance Services
• with specific reference to internal controls in relation to financial reporting, the manager responsible for preparing the Company’s financial reports.

Telecom Italia has adopted the criteria set forth in Borsa Italiana’s Corporate Governance Code for the classification of directors as independent.