The transmission of energy is Terna's core business, regulated primarily by government concession and the provisions of the Italian Regulatory Authority for Energy, Networks and Environment (ARERA) which include the definition of the remuneration allocated to Terna and the corresponding tariff system.
As such, Terna is not exposed to ordinary price and market risks, or only marginally and strictly with reference to Non-Regulated Activities (NRA), but rather to regulatory and legal risks.
Regulatory risk derives from the possible variation in the parameters which determine regulated revenue, particularly in reference to the multi-year review of the regulatory framework.
Legal risk is linked to possible changes to Italian and European standards on matters regarding the environment, energy, tax and corporate (employment and contracts) issues.
These aspects, like all forms of risk, are subjected to intense analysis by Terna, which has identified the principle risks connected to its own activities and has introduced specific safeguards, tools and organisational structures in order to reduce and minimise the impact to within acceptable limits.
Internal Control and Risk Management System
The Group has introduced an “Internal Control and Risk Management System” (ICRMS), in compliance with the provisions of the Corporate Governance Code adopted by listed companies and prepared by the Corporate Governance Committee, promoted by Borsa Italiana S.p.A.
An essential element of Terna’s Corporate Governance strategy, the System is implemented across the more general organisational and corporate governance structures and is based on the principles of Italian and International Best Practices. It is an essential component in maintaining the trust of our stakeholders.
It is composed of a set of rules, procedures and organisational structures aimed at enabling the identification, measurement, management and monitoring of the major risks, so that the business may be run in line with the company objectives set out by the Board of Directors, facilitating the implementation of informed decisions.
It contributes, with reasonable certainty, to ensuring the safeguarding of the company's assets, the efficacy and efficiency of company processes, the reliability of financial transactions, compliance with the law, regulations, bylaws and internal procedures, and the accuracy of the corporate reporting system and the information provided to corporate bodies and the market.
Terna has developed its own System taking into consideration the particular nature and type of its activities and the risks related to these; in consideration of the corporate interests of the activities carried out, it pays particular attention to the part of the System which aims to safeguard the continuity of the electrical service and ensure impartial conduct in the performance of related activities.
To find out more, see the Internal Control and Risk Management System section in the Report on Corporate Governance and Ownership Structures 2017.
The monitoring and effective treatment of corporate risks are managed through the adoption of general organisational measures and specific safeguards. The Group is structured to enable a capillary management and monitoring system for activities and risks, as well as a clear allocation of roles and responsibilities.
The principle bodies are:
In the context of the Risk Management system, the Security and Services department
plays a key role.
To find out more, go to the Risk Monitoring section of the Annual Financial Report