Relazione Sulla Corporate Governance

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Relazione Sulla Corporate Governance (Translation from the Italian original which remains the definitive version) PININFARINA S.p.A. 2019 REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE Pursuant to article 123-bis of Legislative decree no. 58 of 24 February 1998, as subsequently amended, and article 89-bis of the Regulation adopted with Consob Resolution no. 11971 of 14 May 1999, as subsequently amended (traditional management and control model) (approved by the Board of Directors on 23 March 2020) website: www.pininfarina.com 2 CONTENTS FOREWORD ..................................................................................................................................................... 5 GLOSSARY ...................................................................................................................................................... 5 1. ISSUER’S PROFILE ................................................................................................................................. 7 2. INFORMATION ABOUT THE COMPANY’S OWNERSHIP STRUCTURE ....................................... 7 a) Structure of the share capital (as per article 123-bis.1.a) of the CFA) ................................................. 7 b) Restrictions on transfers of securities (as per article 123-bis.1.b) of the CFA) .................................... 8 c) Shareholders with significant interests in the share capital (as per article 123-bis.1.c) of the CFA) ... 8 d) Securities that convey special rights (as per article 123-bis.1.d) of the CFA) ...................................... 8 e) Employee stock ownership: mechanisms to exercise voting rights (as per article 123-bis.1.e) of the CFA) .............................................................................................................................................................. 9 f) Voting right restrictions (as per article 123-bis.1.f) of the CFA) ......................................................... 9 g) Shareholders’ agreements pursuant to article 122 of the CFA (as per article 123-bis.1.g) of the CFA) 9 h) Change of control clauses (as per article 123-bis.1.h) of the CFA) and bylaws provisions governing tender offers (as per articles 104.1-ter and 104-bis.1) ................................................................................ 10 i) Mandates to increase the share capital and authorisations to repurchase own shares (as per article 123-bis.1.m) of the CFA) ............................................................................................................................ 10 j) Management and coordination (as per articles 2497 and following of the Italian Civil Code) .......... 10 3. COMPLIANCE (as per article 123-bis.2.a) of the CFA) ........................................................................ 11 4. BOARD OF DIRECTORS ...................................................................................................................... 11 4.1 ELECTION AND REPLACEMENT (as per article 123-bis.1.l) of the CFA) ................................... 11 4.2 COMPOSITION (as per article 123-bis.2.d)/d-bis) of the CFA) ....................................................... 13 4.3 FUNCTIONS OF THE BOARD OF DIRECTORS (AS PER ARTICLE 123-BIS.2.D) OF THE CFA) ............................................................................................................................................................ 16 4.4 DELEGATED BODIES ..................................................................................................................... 18 4.5 OTHER EXECUTIVE DIRECTORS ................................................................................................ 19 4.6 INDEPENDENT DIRECTORS ......................................................................................................... 19 4.7 LEAD INDEPENDENT DIRECTOR ................................................................................................ 21 5. PROCESSING OF COMPANY INFORMATION ................................................................................. 21 6. INTERNAL COMMITTEES OF THE BOARD OF DIRECTORS (AS PER ARTICLE 123-BIS.2.D) OF THE CFA) ................................................................................................................................................. 22 7/8. NOMINATION AND REMUNERATION COMMITTEE .................................................................... 23 9. DIRECTORS’ FEES ............................................................................................................................... 24 10. CONTROL AND RISK COMMITTEE .................................................................................................. 24 11. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ....................................................... 26 11.1 DIRECTOR RESPONSIBLE FOR THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ..................................................................................................................................................... 28 11.2 INTERNAL AUDIT MANAGER ...................................................................................................... 29 11.3 ORGANISATIONAL MODEL and the SUPERVISORY BODY (pursuant to Legislative decree no. 231/2001) .................................................................................................................................................... 30 11.4 INDEPENDENT AUDITORS ............................................................................................................ 31 11.5 MANAGER IN CHARGE OF FINANCIAL REPORTING .............................................................. 31 11.6 COORDINATION AMONG PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ....................................................................................................................... 31 3 12. INTERESTS OF DIRECTORS AND RELATED PARTY TRANSACTIONS ...................................... 31 13. ELECTION OF STATUTORY AUDITORS .......................................................................................... 32 14. COMPOSITION AND ACTIVITIES OF THE BOARD OF STATUTORY AUDITORS (AS PER ARTICLE 123-BIS.2.D)/D-BIS) OF THE CFA) ............................................................................................. 34 15. RELATIONS WITH SHAREHOLDERS ............................................................................................... 36 16. SHAREHOLDERS’ MEETINGS ........................................................................................................... 36 17. OTHER CORPORATE GOVERNANCE PRACTICES ........................................................................ 37 18. CHANGES AFTER THE ANNUAL REPORTING DATE ................................................................... 37 19. LETTER OF THE CHAIRPERSON OF THE CORPORATE GOVERNANCE COMMITTEE DATED 19 DECEMBER 2019 ..................................................................................................................................... 37 ANNEX 1: Section on the “Main Characteristics of the Existing Risk Management and Internal Control Systems Applicable to Financial Disclosures,” pursuant to Article 123-bis.2.b) of the CFA. ........................ 38 TABLE 2: COMPOSITION OF THE BOARD OF DIRECTORS AND ITS COMMITTEES ..................... 40 TABLE 3: COMPOSITION OF THE BOARD OF STATUTORY AUDITORS .......................................... 41 TABLE 4: CONTENT OF THE SHAREHOLDERS’ AGREEMENT .......................................................... 42 TABLE 5: MANAGEMENT AUTHORITY OF THE MANAGING DIRECTOR - EXTRACT ................. 45 4 FOREWORD Prepared pursuant to article 123-bis of the Consolidated Finance Act (CFA) and article 89-bis of the Issuers’ Regulation and in compliance with the “Format for reports on corporate governance and ownership structure” prepared by Borsa Italiana S.p.A. and last updated in January 2019, the aim of this Report is to provide a general overview of the ownership structure of Pininfarina S.p.A. and the corporate governance system adopted thereby. The report was approved by the company’s Board of Directors on 23 March 2020. The Report is sent to Borsa Italiana S.p.A.. It is available to the public at the company’s registered office and published on the “Investor Relations/Corporate Governance” section of the company’s website (www.pininfarina.com), as well as through the “eMarket STORAGE” centralised storage device managed by Spafid Connect S.p.A. (available at www.emarketstorage.com), within the terms set by ruling legislation. **.***.** GLOSSARY Audit Plan: the audit plan on the functioning and suitability of the Internal Control and Risk Management System (defined herein) by the Internal Audit Manager, approved by the Board of Directors on 23 November 2017 as subsequently amended. Beneficiaries: the beneficiaries of the Stock Option Plan. Board or Board of Directors: the Issuer’s Board of Directors. Board of Statutory Auditors: the company’s control body. Bylaws: the company’s bylaws, published on the “Investor Relations/Corporate Governance” section of the website. Code/Code of Conduct: the Code of conduct for listed companies, approved in March 2006 by the Corporate Governance Committee, and endorsed by Borsa Italiana (the Italian Stock Exchange), ABI (the Italian Bank Association), Assogestioni (the Italian Asset Management Association), Assonime (the Italian Joint Stock Companies Association) and Confindustria (the Association of Italian Industries), as last updated in July
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