14MB - Pirelli

12.3. Organisational model ex Legislative Decree 231/2001
The internal control system described above has been further strengthened by the introduction
of an organizational model that the Board of Directors approved on 31 July 2003 and which
has been revised and modified according to updated regulations (most recently with a resolution
of the Board of Directors on 9 March 2008). This organisational model, which is intended
to ensure the development of a system that meets the specific requirements deriving from the
entry into force of Legislative Decree 231/2001, on the administrative liability of companies for
criminal offences committed by their employees, the model consists of a set of principles and
procedures arranged in a pyramid that, starting from the base, can be summarized as follows:
—— a Group Code of Ethics, which enunciates the general principles (transparency, correctness
and fairness) that inspire the conduct of business. It indicates the objectives and the values
informing business activity in relation to the main stakeholders with which Pirelli & C.
interacts on a daily basis: the shareholders, the financial market, customers, staff and the
community;
—— general principles of internal control, which qualify the Internal Control System, the field
of application of which extends uniformly across the various levels of the organisation;
—— lines of conduct which set out specific rules aiming to avoid the creation of environmental
situations that favour criminal activity in general and, in particular, crimes pursuant to
legislative decree 231/2001, and translate the principles expressed in the Code of Ethics into
operational practice;
—— internal control checklists, which set out the main phases of each high and medium risk
process and, for instrumental processes, the specific checks to be made to reasonably prevent
the risk of any criminal offence and the flows of information to the Supervisory Body
to draw attention to situations of possible non-compliance with the procedures established
in the organisational model.
The Organisational Model mentioned is available on the Company website www.pirelli.com.
A specific Self-Regulatory Body, with full economic independence, monitors the functioning of
and the adherence to the organisational model. It is composed of Carlo Secchi, the Lead Independent
Director and Chairman of the Committee for Internal Control and Corporate Governance,
Statutory Auditor Paolo Domenico Sfameni, a member of the Board of Statutory Auditors,
and Maurizio Bonzi, head of the Internal Audit Department and internal control officer.
This assures the full autonomy and independence of this Body, and the input of the different
professional skills that contribute to the corporate management control.
The Supervisory Body is also charged with making ad hoc recommendations to the Board of Directors
to adapt the organizational model to changes in the legal framework, and to changes in the nature of
the business activities of the Company and the ways in which they are conducted. While the Supervisory
Body reports to the Board of Directors, the Committee for Internal Control and Corporate Governance
and the Board of Statutory Auditors on the checks it has performed and their outcomes.
Each member of the Self-Regulatory Body is paid a gross annual fee of 15,000 euros.
The mandate of the Self-Regulatory appointed by the Board of Directors on 29 April 2008 expires
with that of the Board that appointed it.
With reference to the other Italian companies in the Group, the Self-Regulatory Body has been identified
by seeking the technical and operational solution that, while respecting the mandate and the powers
reserved to this body by law, is appropriate to the size and organizational context of each company.
Lastly, a disciplinary system has been introduced to sanction non-compliance with the measures
indicated in the organisational, operational and control systems.
Finally, it should be pointed out that the Internal Audit Department of Pirelli & C. provides,
when requested by the self-regulatory bodies of Group companies, operative assistance in the
management and analysis of information flows established pursuant to Art. 6, subsection 2, letter
d), of Legislative Decree 231/2001, as well as in implementation of specific audits on the basis of
data received through the aforementioned information flows.
During the year, the Self-Regulatory Body became involved in the court case that implicated two
ex-heads of the Security Department of the Company, as detailed in the section entitled “Committee
for Internal Control and Corporate Governance”. In this respect, the Self-Regulatory Body
has taken note of the circumstances reported in the aforementioned section.
ANNUAL FINANCIAL REPORT 2008
109