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Corporate Governance

04/18/2016 - 00:30 PM

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Corporate Governance

Corporate Governance and Sustainability

One of the pillars of a company’s sustainability is its Corporate Governance system. In fact, a necessary condition for assuring that the interests of all stakeholders are met, is a set of rules defining the criteria for transparency, integrity and accountability of the mechanisms which lead to key decisions. These rules aim at avoiding that the interests of some stakeholders, which could undermine the company’s future sustainability, overcome those of all stakeholders.

For example, Corporate Governance covers issues such as:

  • The Group’s Code of  Ethics, which, in Telecom Italia’s case, contains provisions for each stakeholder category and it explicitly refers to the Principles of the UN Global Compact.
  • The system of controls to prevent possible infringements such as bribery and corruption,   which is the object of the tenth Principle of the UN Global Compact.
  • The whistle-blowing procedure, which allows anybody to warn the top management and the Board of Statutory Auditors of alleged violations of the Code of Ethics or any other misconduct by the Company’s personnel.
  • The rules to set the Board's and top management's remuneration (as well as the remuneration itself), which is a crucial element in order to avoid aggressive company’s policies which might eventually damage the company itself.
  • Rules to avoid internal dealings, so as to avoid that the company be used, by those in power, for achieving personal benefits.

Responsibility for monitoring the Group's socio-environmental issues and identifying projects and initiatives rests with the Corporate Social Value department, which

  • reports directly to the Chairman of the Board of Directors;
  • periodically reports to the Control and Risk Committee.

The latter acts as a corporate social responsibility overseer, ensuring the consistency of actions carried out with the principles of the Group's Code of Ethics and with the values adopted by the Group. During 2015, the Control and Risk Committee met the representatives of the CSV department once, the Board,  has the task of watching over sustainability activities of the Group, making sure that they are consistent with the Group’s ethical values.

Corporate Governance in Telecom Italia

The system of corporate governance adopted by Telecom Italia is focused on

  • leadership of the Board of Directors in strategic decisions, 
  • transparency of decisions, both those concerning the company and those concerning the market,
  • accountability of actions and hence efficiency and effectiveness of the internal control system,
  • strict discipline of potential conflicts of interest and firm principles of conduct for transactions with related parties.

This system, which was designed and built in light of the principles elaborated by the Committee for the Corporate Governance of the Italian Stock Exchange and the best international practices, has been implemented with the adoption of codes, principles and procedures appropriate to the activities of the company’s organizational and operational components. The System of Committees is one of the most important aspects of our Corporate Governance System.

Each year Telecom Italia publishes a report on its corporate governance system, and on its compliance with the principles of the Self-Regulatory Code for listed companies, promoted by Borsa italiana. 

For further information, see our Corporate Governance Section.