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The term Governance defines the totality of regulations, of the bodies and systems that govern the management of a company, starting from its governing bodies (for example, the Board of Directors) to include also the governance of relations with stakeholders.

Excellent regulations and Governance systems, at all levels, also guarantee decision-making power within the company carried out in compliance with the mission and corporate objectives.

The salient aspects of Terna’s Governance system include:

Some specific elements of the Terna Group’s governance system are illustrated below:

  • Corporate Governance
  • Sustainability Governance
  • Code of Ethics
  • Risk analysis and management
  • Certified management systems

Terna's Corporate Governance is in line with the principles contained in the Governance Code of listed companies, with the recommendations formulated on the subject by the CONSOB – National Commission for Companies and the Stock Market and, more generally, with the international best practices. This system is oriented toward creating value for shareholders, taking into account the social significance of Terna’s activities and the resulting need to adequately consider all stakeholders in the performance of those activities.

The fundamental aspects of Terna's Governance model are illustrated in the Report on Corporate Governance and ownership structures which the Group publishes annually and describes in detail:   

  • governance structures
  • corporate structure
  • information on ownership structures
  • rules and obligations
  • standards of conduct
  • control systems
  • processing of corporate information
  • relations with shareholders

The Board of Directorsmade up of nine members whose mandate will expire on approval of the financial statements for the year 2019, was appointed by the General Shareholders' Meeting and is charged with managing the company. The Board of Directors heads all the departments and responsibilities, the strategic and organizational policies of the Company and of the Group, and verifies the existence of the necessary controls for monitoring the performance of the Company and of its subsidiaries. 

The Internal Control system is part of the governance model; its task is to guarantee, with reasonable certainty:   

  • achievement of the strategic objectives
  • safeguarding of the corporate assets
  • effectiveness and efficiency of the corporate operations
  • reliability of financial operations
  • observance of laws and regulations
  • reliability of the corporate reporting and of the financial disclosure
  • safeguarding of the continuity of the electrical service
  • impartiality in performance of the licensed activities

The interal control system has one of its expressions in the Code of Ethics on which the managerial style and conduct of all the company's employees must be inspired. The 231 Model is also significant for the purposes of control.

Terna believes that the sense of responsibility for the social and environmental impacts of its work affects the operating aspects and translates into programmes, actions and initiatives aimed at generating and maintaining a climate of confidence with its stakeholders: for this reason it has identified sustainability as a distinctive feature of its work.

The fundamental guidelines for Corporate Social Responsibility (CSR) are provided by Terna's corporate mission and by Code of Ethics.



Audit, Risk, Corporate Governance and Sustainability Committee

This Committee is composed of independent members of the Board of Directors tasked to support the Board in assessing and making decisions on the Internal Audit and Risk Management System (IARMS). Since January 2016, the Committee's tasks have also included sustainability themes such as policies, objectives, the Sustainability Report and the monitoring of sustainability indicators.

“Sustainability” department

This department, which is part of the External Communications and Sustainability department, in collaboration with all the departments concerned, helps to define and disseminate the Group's sustainability objectives in ethical, social, environmental and governance areas. Preparation of the Sustainability Report is also assisted by the SDM (Sustainability Data Manager), a dedicated non-financial data management software application, which currently gathers over 1,500 indicators corresponding to more than 350,000 pieces of textual information, data, conversion factors and formulae for monitoring Terna's environmental and social performance over a 10-year period.
With regard to the prevention of reputational risk, the department monitors the risks relating to sustainability themes through analysis by the leading rating agencies (for example, RobecoSAM, Vigeo, Eiris), which periodically assess the Group's ESG performance. In 2017, Terna's presence was confirmed in all the leading international sustainability indices.

Integrated Management System

The Integrated Management System is the tool which – via certified quality, environmental and safety systems – optimises coordination of all the departments responsible for governing business processes, environmental performance and occupational safety, which over time have been supported by additional certifications and accreditations. It is an important risk management tool because it highlights potential risks in the areas under observation and identifies appropriate mitigation measures. The Integrated Management System covers all the Italian and international activities of Terna SpA, Terna Plus Srl and Terna Rete Italia SpA. It does not include Tamini Group companies, which also have their own certifications in the same areas, as they are controlled by Terna Plus. In June 2018, the appointed certification body will carry out the checks for the transition from the current version of ISO 14001:2004 to the new ISO14001:2015.

Balanced scorecard and variable remuneration

The monitoring and oversight of operations is based on a Balanced Scorecard (BSC) system, a dashboard of indicators via which achievement of the objectives – including sustainability objectives – linked to the Strategic Plan is assessed on a quarterly basis. Key sustainability objectives are among those taken into account when determining the amount of variable pay, above all for the Chief Executive Officer and other senior managers.

Terna’s Code of Ethics was created in 2006 following the transformation that made Terna an independent operator on the electricity transmission market. This new structure began a process of internal reflection and discussion on the identity, mission and values of the Company which culminated in the adoption, at the meeting of the Board of Directors of 21 December 2006, of a new Code of Ethics.

This instrument identifies Terna’s stakeholders of reference and lays out the guidelines for tackling and managing the problems associated with conducting the energy transmission business. Particular attention is paid to operating respecting the environment and in harmony with local communities and their Institutions.

On the internal front, the Code of Ethics identifies the prevention of situations with a potential conflict of interest as an important area to be overseen.

The Code of Ethics is valid for the Parent Company Terna S.p.A. and for all the subsidiaries in Italy and abroad. In February 2015, considering the evolution over time in its organisational structure, Terna defined a Guideline on the adoption of the Code of Ethics in the Group Companies that contains interpretative guidance on the connections between specific contents of the Code and operating contexts of the Parent Company and the subsidiaries.

With a view to possible developments of the company in countries characterised by non-uniform national legislations, the Group has chosen to adopt as a minimum standard observance of the principles of the United Nations Global Compact and to require the subsidiaries to base their work always on the highest national standards.

Find out more about the Code of Ethics (italian version here)

Ethical Committee

The Ethics Committee is a body made up of five members, Terna employees appointed by the Chief Executive Officer, who remain in office for a limited period of time. It has the task of:

    • responding to requests for clarifications regarding the Code of Ethics

    • receiving and examining reports of breaches

    • deciding whether to open an investigation regarding the report

    • providing a response to the whistleblowers on this decision

    • It manages the reports received through the Whistleblowing portal with the support of the internal Audit, Fraud Management and 231 Model oversight units.

Terna’s stakeholders can report all breaches or suspected breaches of the Code of Ethics to:

  • Ethical Committee: send an email to: comitato.etico@terna.it
  • Audit Unit: send a letter on paper to the address: Terna SpA - Audit Unit - Code of Ethics - Viale Egidio Galbani, 70 - 00156 Rome

When a report is sent to the Ethics Committee, the latter decides whether to act on it passing it to the Audit unit for ascertainments and normally communicates its decision within 30 days.

To protect the whistleblowers from any form of retaliation, they are assured that their identity will remain confidential, subject to the legal obligations.

The Terna Group operates in Italy, where the legal framework and the level of civil development largely guarantee respect for human rights, freedom of association and collective bargaining, thus making it non-critical for a company to take particular action on these issues with the implementation of specific management policies.

Terna tackles scrupulously the analysis, prevention and management of the risks that regard the various aspects of the company’s business. Risk assessments are carried out periodically, with frequency and methods in keeping with the type of risk and in any case at least once a year. The management systems are adjusted as a consequence. Besides the risks described in the Financial Report - market and financial risks, risks associated with financing requirements, operational risks associated with malfunctioning of the electricity grid, regulatory risks and risks of legal disputes- we can note also:

    • risks and opportunities associated with climate change;

    • risks associated with the electricity market and the electricity system.

Among the management aspects, protecting legality and preventing corruption assume particular significance; these are covered by the provisions of the Code of Ethics, the Organisational Model 231 and training of the personnel. The oversight put in place and the results achieved in preventing corruption have made Terna one of the best companies - and the top Italian one - among those analysed by the international study “Que font les entreprises cotées pour prévenir la corruption?” carried out by the sustainability rating agency Vigeo in collaboration with Transparency International. 

From 2006 to today there has been no pending legal disputes, nor have any court cases been concluded on the subject of corruption.

Terna has voluntarily adopted certified management systems that monitor Quality, Environment and Safety, Energy Management, Information Security, Quality of Test Laboratories and Calibration and, a first in Italy, Anti-Corruption.

Every year the Integrated Management Systems perform their role through several stages. In particular:

  • Analysis and Planning Periodic analysis of operational activities to identify areas of legal compliance and the improvement actions to be taken, in line with the goals of the Group's sustainability policies.
  • Implementation Defining and implementing Action Plans for performance improvement that reach the goals defined in the analysis and planning phase.
  • Verification Periodic checks on compliance with legal requirements, obligations and agreed business objectives of planned actions

Find out more about Terna Group’s certifications