Società cooperativa
Head office at Via San Carlo 8/20, Modena, Italy
Modena Companies Register and Tax code/VAT no. 01153230360 Register of Banks no. 4932 and Register of Cooperatives no. A163859
Member of the Interbank Deposit Guarantee Fund and of the National Guarantee Fund Variable share capital
www.bper.it
REPORT ON CORPORATE GOVERNANCE
AND OWNERSHIP STRUCTURE
in accordance with art. 123-bis of Legislative Decree 58 dated 24
February 1998
(Consolidated Finance Act or CFA)
(standard model for administration and control)
- 2014 -
INTRODUCTION ... 7
1 PROFILE OF THE ISSUER ... 8
2 INFORMATION ON THE OWNERSHIP STRUCTURE (ART. 123-BIS, PARAGRAPH 1, LEGISLATIVE DECREE 58/98) ... 11
2.1 STRUCTURE OF SHARE CAPITAL (ART. 123-BIS, PARAGRAPH 1.A), LEGISLATIVE DECREE 58/98) ... 11
2.2 RESTRICTIONS ON THE TRANSFER OF SECURITIES (ART. 123-BIS, PARAGRAPH 1.B), LEGISLATIVE DECREE 58/98) 13 2.3 SIGNIFICANT HOLDINGS OF SHARE CAPITAL (ART. 123 BIS, PARAGRAPH 1.C), LEGISLATIVE DECREE 58/98) 13 2.4 SECURITIES CARRYING SPECIAL RIGHTS (ART 123 BIS, PARAGRAPH 1.D), LEGISLATIVE DECREE 58/98) .... 14
2.5 SHARES HELD BY EMPLOYEES: MECHANISM FOR EXERCISING VOTING RIGHTS (ART. 123-BIS, PARAGRAPH 1.E), LEGISLATIVE DECREE 58/98) ... 14
2.6 RESTRICTIONS ON VOTING RIGHTS (ART 123-BIS, PARAGRAPH 1.F), LEGISLATIVE DECREE 58/98) ... 14
2.7 AGREEMENTS BETWEEN SHAREHOLDERS (ART 123-BIS, PARAGRAPH 1.G), LEGISLATIVE DECREE 58/98) .. 14
2.8 CHANGE OF CONTROL CLAUSES (ART 123-BIS, PARAGRAPH 1.H), LEGISLATIVE DECREE 58/98) AND PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO TAKEOVER BIDS (ARTS. 104, PARAGRAPH 1-TER, AND 104-BIS, PARAGRAPH 1) ... 15
2.9 MANDATES TO INCREASE SHARE CAPITAL AND AUTHORISATIONS TO PURCHASE TREASURY SHARES (ART. 123-BIS, PARAGRAPH 1.M), LEGISLATIVE DECREE 58/98) ... 15
2.10 MANAGEMENT AND COORDINATION ACTIVITIES (ART. 2497 ET SEQ. OF THE ITALIAN CIVIL CODE) ... 16
3 ADOPTION OF CODES OF CONDUCT (ART 123-BIS, PARAGRAPH 2.A), LEGISLATIVE DECREE 58/98) ... 17
4 BOARD OF DIRECTORS ... 18
4.1 APPOINTMENTS AND REPLACEMENTS (ART. 123-BIS, PARAGRAPH 1.L), LEGISLATIVE DECREE 58/98) ... 18
4.2 COMPOSITION OF THE BOARD (ART 123-BIS, PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 21
4.2.1 Maximum accumulation of offices that can be held in other companies ... 108
4.3 ROLE OF THE BOARD OF DIRECTORS (ART. 123-BIS, PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 109
4.4 CHAIRMAN OF THE BOARD OF DIRECTORS ... 113
4.5 RESPONSIBLE BODIES ... 113
4.5.1 Chief Executive Officer ... 113
4.5.2 Executive Committee (under art. 123-bis, paragraph 2, letter d), Legislative Decree 58/98) ... 114
4.5.3 Information for the Board of Directors ... 115
4.6 OTHER EXECUTIVE DIRECTORS ... 115
4.7 INDEPENDENT DIRECTORS ... 115
4.8 LEAD INDEPENDENT DIRECTOR ... 115
7 NOMINATIONS AND COMPENSATION COMMITTEE ... 118
7.1 COMPOSITION AND FUNCTIONING OF THE NOMINATIONS AND COMPENSATION COMMITTEE (ART. 123-BIS, PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 118
7.2 FUNCTIONS OF THE NOMINATIONS AND COMPENSATION COMMITTEE ... 119
8 REMUNERATION OF DIRECTORS ... 121
8.1 INDEMNITIES FOR DIRECTORS WHO RESIGN, ARE TERMINATED OR CEASE TO SERVE FOLLOWING A PUBLIC OFFER FOR THE PURCHASE OF SHARES (ART 123-BIS, PARAGRAPH 1.I), OF LEGISLATIVE DECREE 58/98) ... 122
9 CONTROL AND RISK COMMITTEE ... 123
9.1 COMPOSITION AND FUNCTIONING OF THE CONTROL AND RISK COMMITTEE (ART. 123-BIS, PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 123
9.2 FUNCTIONS ATTRIBUTED TO THE CONTROL AND RISK COMMITTEE ... 124
10 INDEPENDENT DIRECTORS COMMITTEE ... 126
10.1 COMPOSITION AND FUNCTIONING OF THE INDEPENDENT DIRECTORS COMMITTEE (ART. 123-BIS, PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 126
10.2 FUNCTIONS OF THE INDEPENDENT DIRECTORS COMMITTEE ... 127
11 STRATEGY COMMITTEE ... 130
11.1 COMPOSITION AND FUNCTIONING OF THE STRATEGY COMMITTEE (ART. 123-BIS, PARAGRAPH 2 LETTER D), LEGISLATIVE DECREE 58/98) ... 130
11.2 FUNCTIONS OF THE STRATEGY COMMITTEE ... 131
12 SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT ... 132
12.1 FINANCIAL REPORTING PROCESS - RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS (AS PER ART. 123-BIS, PARAGRAPH 2, LETTER B) OF LEGISLATIVE DECREE 58/98) ... 134
12.2 DIRECTOR RESPONSIBLE FOR THE SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT ... 137
12.3 HEAD OF INTERNAL AUDIT ... 138
13 ORGANISATION MODEL (DECREE 231/2001) ... 140
14 AUDIT FIRM ... 143
15 MANAGER RESPONSIBLE FOR PREPARING THE COMPANY'S FINANCIAL REPORTS AND MANAGERS IN CHARGE OF CONTROL FUNCTIONS ... 144
16 COORDINATION OF ALL THOSE INVOLVED IN THE SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT ... 146
17 DIRECTORS' INTERESTS AND RELATED-PARTY TRANSACTIONS AND/OR ASSOCIATED PERSONS ... 147
19 COMPOSITION AND FUNCTIONING OF BOARD OF STATUTORY AUDITORS (ART. 123-BIS,
PARAGRAPH 2.D), LEGISLATIVE DECREE 58/98) ... 153
20 RELATIONS WITH MEMBERS AND SHAREHOLDERS ... 158
21 SHAREHOLDERS' MEETINGS ... 159
22 OTHER CORPORATE GOVERNANCE PRACTICES (ART. 123-BIS, PARAGRAPH 2.A), LEGISLATIVE DECREE 58/98) ... 161
22.1 GENERAL MANAGEMENT ... 161
22.2 BOARD OF ARBITERS ... 161
23 CHANGES SINCE THE END OF THE YEAR ... 163
GLOSSARY
ECB European Central Bank, head office at Frankfurt am Main (Germany), Sonnemannstrasse 20.
Banca popolare dell’Emilia Romagna or Issuer or Bank or Parent Company or Company or BPER
Banca popolare dell’Emilia Romagna Società cooperativa, head office in Via San Carlo 8/20, Modena, (Italy) Parent Company of the BPER Group.
Borsa Italiana or Borsa Borsa Italiana S.p.A., head office at Piazza degli Affari 6, Milan (Italy) Italian Civil Code or Civil
Code The Italian Civil Code.
Code of Conduct or Code
The Code of Conduct for listed companies, approved in July 2014 by the Committee for Corporate Governance and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria.
Board of Statutory Auditors or Statutory Auditors
The Board of Statutory Auditors of Banca popolare dell’Emilia Romagna.
Board of Directors or
Board or B.o.D. The Board of Directors of Banca popolare dell’Emilia Romagna.
CONSOB National Commission for Companies and the Stock Exchange with head office in Via G.B. Martini 3, Rome (Italy).
Supervisory Provisions Supervisory Provisions for Banks issued by the Bank of Italy with Circular 285 of 17 December 2013 and subsequent amendments and integrations.
FTSE MIB
The FTSE MIB Index measures the performance of 40 Italian equities and seeks to replicate the broad sector weightings of the Italian stock market. The Index is derived from the universe of stocks trading on the main market of Borsa Italiana S.p.A. Each stock is analysed for size and liquidity, and the overall Index provides a fair representation sector by sector. The FTSE MIB Index is weighted by market capitalisation after adjusting the various components on the basis of their float.
BPER Group or Group
The “Banca popolare dell'Emilia Romagna” federal banking group comprising banks and finance, property and service companies, as well as various other types of company.
Stock Market Instructions The Instructions accompanying the Regulations for the Markets organised and managed by Borsa Italiana S.p.A.
MTA Mercato Telematico Azionario, the electronic equities market organised and managed by Borsa Italiana.
Stock Market Regulation The Regulation for the Stock Markets organised and managed by Borsa Italiana S.p.A.
Issuers' Regulation The Regulation approved by CONSOB Resolution no. 11971 dated 14 May 1999 and subsequent amendments and additions.
Market Regulation The Regulation approved by CONSOB Resolution no. 16191 dated 29 October 2007 and subsequent amendments and additions.
CONSOB Related Parties
integrations.
Report on Corporate Governance or Report
The Report on Corporate Governance and the Ownership Structure (Report on corporate governance) that companies are required to prepare pursuant to art. 123-bis Legislative Decree 58/98.
Member/s and Shareholder/s
Given the nature of BPER as a cooperative bank, being a Shareholder is not necessarily the same as being a Member. Pursuant to art. 9 of the articles of association, Shareholders who wish to be admitted as a Member must apply in writing to the Board of Directors. If the application is accepted, the applicant is notified and the Shareholders' Register is updated. In the absence of admission as a Member, the only rights that may be exercised in relation to shares held are those relating to the equity of the Bank. For further details, see Paragraph 2.1.
Articles of association or Articles
The articles of association of “Banca popolare dell’Emilia Romagna” in force at the date of this Report.
Consolidated Banking Act or Legislative Decree 385/93
Legislative Decree no. 385 dated 1 September 1993 (Consolidated law on banking and lending matters) and subsequent amendments and additions. Consolidated Finance Act
or CFA
Legislative Decree no. 58 dated 24 February 1998 (Consolidated law on financial intermediation) and subsequent amendments and additions.
Introduction
Pursuant to art. 123-bis of Legislative Decree 58/98, companies that issue securities admitted for trading in regulated markets are required to prepare and publish an annual "Report on corporate governance and ownership structure" containing the information required by the above law.
Pursuant to art. 89-bis of the Issuers' Regulation, the Report has to state whether the issuer has not adopted, or does not intend to continue to adopt, a code of conduct for corporate governance promoted by the companies that manage regulated markets or by trade associations; and if the issuer does adopt it, the Report has to give the reasons why one or more of its provisions have not been adopted. The Report must also indicate the governance practices actually adopted by the Company, over and above those required by current legislation or regulations.
Preparation of this Report has taken account inter alia of the "Code of Conduct" proposed by Borsa Italiana S.p.A., as amended in July 2014. Even though BPER currently does not see fit to adopt it formally, this report is largely based on the "Format for the report on corporate governance and ownership structure" prepared by Borsa Italiana S.p.A. in January 2015.
The indications of the Italian Stock Exchange for the preparation of the Report have been supplemented by additional information considered necessary to provide adequate information to members/shareholders and to the market, as well as reported in CONSOB Communication DEM/11012984 of 24 February 2011 on "Enquiries pursuant to Article 114, paragraph 5, of Legislative Decree no. 58 of 24 February 1998, on remuneration, self-assessment of the administrative body and succession plans - Recommendations regarding information on compensation provided for by art. 78 of Regulation no. 11971 of 14 May 1999, as amended", for which reference should be made to Section 8.1 of this Report.
The previous Reports on corporate governance prepared by Banca popolare dell’Emilia Romagna, so as this one, are available on the website www.bper.it in the Governance - Documents Section, as well as on Borsa Italiana S.p.A.'s website www.borsaitaliana.it.
1
Profile of the Issuer
Banca popolare dell’Emilia Romagna was incorporated on 1 December 1984, with deed dated 29 December 1983, following the merger of various banks, all more than 100 years old. It is a cooperative company with registered offices in Via San Carlo 8/20, Modena, Italy. The Issuer is listed on the Mercato Telematico Azionario (MTA) organised and managed by Borsa Italiana and is part in the formation of the Dow Jones STOXX 600 Index. The BPER stock is also included in the FTSE MIB index, which means that it is traded on The After Hours (TAH) market of the Multilateral Trading Facility (MTF).
The objects of the Bank are to gather savings and make loans in various forms to both members and non-members, applying the principles underpinning the cooperative movement.
Members who are also customers can access special benefits on products and services, including free insurance cover for "Accidents", "Snatch, theft and robbery" and "Third-Party Liability", custody and administration of their BPER shares at no cost, lower fees for the rental of safe deposit boxes. There is also a 10% discount on certain items involved in the maintenance of current accounts, new subscriptions of certain insurance policies and the issuance of special certificates of deposit, as well as a special credit card exclusively for members. Other benefits are also available for shareholders who attend the Shareholders' Meeting to approve the Financial Statements (for details, see the website www.bper.it).
In addition, a series of non-banking benefits for the Members were confirmed and updated for 2015, having been implemented through agreements with partners operating in various different sectors, including welfare, tourism, car rentals, technology and airports. A special website www.bperspecialesoci.it has been created to support this initiative. It contains all pertinent information and there is even a call centre service reserved for Members.
For specific financial and contractual conditions, reference should be made to the information sheets and pamphlets available for customers at all Bank's branches.
The Bank also aims to assist the development of productive activities, with particular reference to small and medium-sized firms, and encourages all forms of savings by the public. In compliance with current regulations, the Bank is able to carry out all transactions and provide all permitted banking and financial services, including all transactions that contribute to or are related to the achievement of its corporate objects and institutional goals.
Since its inception, the Bank has adopted the standard system of administration and control described in paras. 2, 3 and 4 of Section VI-bis, Chapter V, Title V, Book V of the Civil Code, which envisages the existence of a Board of Directors and a Board of Statutory Auditors. As things stand, the advantages offered by the alternative models of governance envisaged in arts. 2409-octies et seq. of the Civil Code are not considered sufficient to make them preferable to the system already selected.
Banca popolare dell’Emilia Romagna is the parent of the Banking Group of the same name that was formed in 1992.
Group companies are subject to management control and coordination (as per art. 61 Legislative Decree 385/93) by the Parent Company, which provides guidelines for implementation of the instructions issued by the Bank of Italy in the interests of the Group and its stability.
At the end of 2014, the BPER Group in Italy comprises 3 banks, in addition to the Parent Company itself, 7 finance-sector companies and 5 property and service companies; as well as the following foreign companies: BPER (Europe) International s.a. (Grand Duchy of Luxembourg) and Em.Ro. Finance Ireland Ltd (Ireland). Note that at the end of 2014 the consolidation area also included Polo Campania S.r.l., Melior Valorizzazioni Immobili S.r.l., Adras S.p.A.1, Italiana Valorizzazioni Immobiliari S.r.l. and Galilei Immobiliare S.r.l.; they are not formal members of the Group, since they do not contribute directly to its banking activities.
The maintenance of flexibility and separate identities in the various regional markets is accompanied by careful exercise of the Parent Company's management and coordination role. This balances the recognition of operational autonomy with appropriate governance at Group level, ensuring that strategies and strategic
1
directions are consistent.
Corporate Social Responsibility
During 2014, the CSR function (which operates on behalf of the entire Group and is carried out by the External Relations and CSR Office) focused on the following areas:
• the creation of BPER's second Sustainability Report which was presented at the Shareholders' Meeting last April. This report does not set out to be a genuine sustainability report, but to act as a summary of one that allows the reader, in a few pages, to appreciate the Parent Company's efforts on behalf of its stakeholders in 2013. The brochure is available in print at BPER branches and electronically on www.bper.it, along with a video presentation. The 2014 report contains some new features: the materiality matrix, studies on Financial Education, the Charity Trust, Arms Policy, the prevention of Pathological Gambling, as well as a check on the achievement of the objectives set for 2013. This report ends with a list of links and e-mail addresses to enhance the process of interaction with stakeholders;
• Microcredit: in addition to the relationship with PerMicro s.p.a. and MXIT (Microcredito per l'Italia Impresa Sociale s.p.a.), the "Avere credito" project, promoted by Fondazione CR Carpi (Modena) and the "Fides et Labor" initiative of the Diocese of Carpi are also available at local level in the Carpi area (Modena);
• as regards measures to prevent Pathological Gambling, a double event was organised at the Forum Monzani entitled "Fate il nostro gioco!", in collaboration with the CNA and the Municipality of Modena, as part of the "Club imprese modenesi per la RSI" project. The event on 20 February 2014 saw the participation of 550 high school students in the morning and 650 people in the evening. Two young Turin science communicators from the company "Taxi 1729" explained - in an appealing way - the calculation of the probabilities associated with gaming and betting, showing that, in the end of the day, gambling doesn't pay;
• support for training apprenticeships for youngsters in Italy and abroad (managed by Uniser Onlus), which are a further evolution of the scholarships granted by the Bank to deserving young people, in order to create good jobs;
• activation at Group level of financial education classes (promoted by the "Patti Chiari" Consortium), addressed to students of junior high schools ("The Junior Economic Footprint”). The CSR function also prepared and held lessons for high school students that focused on "Education on Conscious Consumption and Saving";
• the organisation along with Etica SGR s.p.a. of the conference entitled "Investire per bene – la finanza non è un gioco", which was held in Modena on 19 June 2014. The topic was investment with respect for human rights, which had an excellent response in terms of participation and appreciation;
• participation in the "Reggio Emilia alliance for a society without mafias" (as the only member bank together with Banca Popolare Etica s.c.p.a.), a local multistakeholder entity for the supervision and defence of legality;
• the preparation and teaching of the lesson on CSR in the various editions of the "Ethics in BPER" training course aimed at employees, who showed considerable appreciation for the contents;
• participation as representatives of the BPER Group in Working Groups (ABI, Patti Chiari, Forum for Sustainable Finance, Fondazione Giordano dell'Amore, Club Imprese modenesi per la RSI, Centro Servizi per il Volontariato di Modena etc.) on the theme of Sustainability, Microfinance and financial inclusion;
• participation in the Provincial Laboratory of Reggio Emilia Companies for CSR that led to a project called "Financial Education in favour of the local territory", which was explained at the conference organised by the Chamber of Commerce of Reggio Emilia on 10 July 2014;
• the production and in-house distribution of reports summarising studies of trends, forecasts, social and economic matters by external bodies, particular in the field of CSR, in order to grasp the dynamics taking place in society and in the territory where the Group operates;
Group Guidelines on dealings with the Armed Forces and arms manufacturers. Through this report, for the first time, the BPER Group explains with maximum transparency a sensitive and controversial topic, indicating the number of companies covered by the above mentioned guidelines, the funding they have used and details of payments tracked for the purposes of Law 185/90;
• membership of the "Carbon Disclosure Project" (CDP) by filling in a detailed questionnaire by the Group's Technical and Property Unit; this document details the tons of CO2 saved by BPER in 2013 and its targets for 2014, with a view to continuously improving the environmental sustainability of the Bank. CDP is an international independent non-profit organisation of global importance, which provides companies and cities with the only global system for measuring, publishing, managing and sharing key environmental information. CDP acts on behalf of 767 institutional investors that manage assets totalling 92,000 billion dollars, collecting information from companies on their greenhouse gas emissions, the steps they have taken to manage the risks and opportunities related to climate change and water resource management. CDP today manages the largest worldwide database on climate change, water and forest resources, and makes it available to support political, strategic and investment choices;
• publication of the guide to “Pathological gamblers and banking services” (a first at national level), together with the Reggio Emilia non-profit “Papa Giovanni XXIII”, L.A.G. in Vignola and the Centro Servizi per il Volontariato di Modena (Service Centre for Voluntary Work);
• adoption of the Decree issued by the Ministry of the Economy and Finance (MEF) and the Ministry of Economic Development (MISE), which sets out the obligations of banks towards firms that have a Legality Rating.
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Information on the ownership structure (art. 123-bis, paragraph 1, Legislative
Decree 58/98)
Decree 3 (urgent measures for the banking system and investment) was published on 24 January 2015 (Official Gazette 19), requiring among other matters the transformation of cooperative banks into companies with liability limited by shares (S.p.A.) if their total assets exceed 8 billion euro (on a consolidated basis if the bank is the parent of a banking group). This Decree, which must be presented to Parliament for conversion into law, envisages compliance within 18 months of the entry into force of the enabling instructions to be issued by the Bank of Italy pursuant to art. 29 of Legislative Decree 385/1993. Banca popolare dell'Emilia Romagna falls within the scope of the cooperative banks covered by this law.
This 2014 Report does not take account of the above Decree, which had not yet been converted into law by the time the Report was approved.
2.1 Structure of share capital (art. 123-bis, paragraph 1.a), Legislative Decree
58/98)
The share capital of the Bank is variable and is represented by the number of shares issued. The issue of shares, which is without limit, may be decided in the following ways:
• routinely by the Board of Directors;
• exceptionally, by a resolution adopted at an Extraordinary Shareholders' Meeting.
Given that the shares are traded on a regulated market, pursuant to art. 6 of the articles of association, the issue of new shares can only be decided by the Extraordinary Shareholders' Meeting, which, however, can also authorize the Board of Directors to issue shares and bonds convertible into shares of the Company. At 31 December 2014, the Bank's subscribed and paid share capital amounts to Euro 1,443,925,305 split into 481,308,435 ordinary shares with par value of Euro 3.00 each.
The share capital structure at 31 December 2014 is made up as follows:
Type of shares No. of shares % of share capital Listed (specify markets) / Unlisted
Rigths and obligations Ordinary Shares 481.308.435 100% All shares are listed on
MTA (Mercato
Telematico Azionario)
Voting rights if a member Equity rights
Shares with limited
voting rights / / / /
Shares without
voting rights / / / /
At 31 December 2014 there were no convertible bond loans.
You are reminded that Shareholders are not necessarily Members, given that BPER is a cooperative bank. No shares have been issued in other categories.
Pursuant to art. 9 of the articles of association, shareholders who wish to be admitted as a member must apply in writing to the Board of Directors of the Bank, confirming their acceptance of the articles of association and the members' regulations. The Board resolves, with reasons, on the application for admission as a member, having regard for the interests of the Bank, the requirements of the articles of association and the cooperative spirit. If the application is accepted, the applicant is notified and the Shareholders' Register is updated.
In the absence of admission as a Member, the only rights that may be exercised in relation to shares held are those relating to the equity of the Bank.
The admission as a member is subject to owning a certain minimum number of shares, which is fixed at least once a year by the Board of Directors, pursuant to art. 8, paragraph 3, of the articles of association. The last resolution on this matter was adopted at the Board meeting held on 28 October 2014, which confirmed 100 as the minimum number of shares to be held.
Individuals, minors included, bodies corporate and legal entities (such as companies, associations, foundations, and UCITS) may be admitted as members.
Admission as a member is subordinate to verification that the applicant shares the objects of the Bank, its interests and the cooperative spirit. Unless denied by other circumstances, this requirement is presumed to be met if the applicant fulfils all the following conditions:
(i) owns at least 100 shares in the Bank;
(ii) has maintained, for at least 90 days, a customer relationship with the Bank or other banks within the banking group and has shown correctness in the conduct of such relationship.
if the above conditions are not fulfilled, the Board of Directors may make a reasoned decision to admit the applicant, who, otherwise, demonstrates that the objects of the Bank, its interests and the cooperative spirit are all shared. In this case, the Board of Directors, by mere way of example, may take account of the following circumstances:
(i) that the applicant is a respected person, in terms of appointments held and professional qualities, who increases the prestige of the Bank;
(ii) that the applicant, by reason of the profession or activities carried on, may make business introductions useful for the Bank;
(iii) with regard to foundations and UCITS,
the materiality of the capital contribution provided to the Bank by the subscription of shares and/or debt securities issued by the Bank.
The Board of Directors may refuse membership, even though the requirements are met, if applicants do not provide sufficiently transparent information about their identity and activities, confirming that they share the objectives and interests of the Bank and the cooperative spirit.
In any event membership will be denied to:
(i) those who force the Bank to take legal action by failing to comply with contractual obligations;
(ii) banned or forbidden persons and those who have been sentenced with the exclusion from holding public office or executive positions in companies, whether on a temporary or permanent basis;
(iii) individuals, bodies corporate and legal entities that, acting as go-betweens, hold assets for the benefit of others and do not disclose sufficiently transparent information regarding the real identity and / or activities of the owner, thereby preventing verification that the admission requirements established in the regulation are met;
(iv) those responsible for acts that damage the interests or the prestige of the Bank, or in conflict with the Articles of Association and with the cooperative spirit;
transparency equivalent to that under Italian law, having taken account of measures and/or recommendations of Supervisory Authorities and/or market regulation.
Membership is formalised, following adoption of the resolution of admission by the Board of Directors, by recording the new member in the Register of Members.
Applicants whose applications for membership have been rejected are entitled to appeal to the Board of Arbiters, using a specific form made available by the Bank. The Board of Arbiters, supplemented by a representative of the applicants concerned, rules within thirty (30) days of the appeal.
Membership lapses if the party concerned is found to hold fewer than the required number of shares (currently at least 100 shares in the Bank).
The Regulations for admission to Membership are published on the Bank's website in the Members' Section. Lastly, note that the remuneration plans submitted to the Shareholders' Meeting, which will be published in the "Governance" - "Corporate Bodies" - "General Meeting" section of the Bank's website, consist of "phantom stock plans", which means that they do not lead to any allocation of shares that would involve an increase in capital, bonus issues included.
2.2 Restrictions on the transfer of securities (art. 123-bis, paragraph 1.b),
Legislative Decree 58/98)
Pursuant to art. 30 of the Legislative Decree 385/93, as amended recently by Decree Law 179 of 18 October 2012 coordinated with the conversion law 221 of 17 December 2012, no one can hold shares in cooperative banks in excess of 1% of the share capital (previously the limit was set at 0.50%), subject to the statutory right to impose tighter limits, though not less than 0.50%.
As an exception, the limit for mutual funds (UCITS) is established in their individual regulations.
According to the text of art. 30 of the Legislative Decree 385/93, another exception can be expected from the articles of association, which will be able to set a ceiling of 3% for the participation banking foundations that exceed this limit as of 19 December 2012 (the date that Law 221/2012 comes into force), if the overrun is the result of business combinations. It remains understood that this participation cannot be increased and the amendment does not have any impact on the more stringent limits laid down by the rules of these entities nor on the approvals required by law.
Art. 12 of the Bank articles of association provides that no one may hold a number of shares for a total nominal value that exceeds the limit on participation established by law.
Persons who, due to inheritance or for other reasons, become holders of shares whose nominal value exceeds the maximum established by law, must dispose of the excess shares within one year of such excess being notified. If this period elapses without effect, the Board of Directors suspends the payment of dividends on the excess shares and redeems them in accordance with art. 7.2 of the articles of association. For further information, see the articles of association.
Transactions in shares carried out by relevant parties and by persons closely associated with them pursuant to art. 114 of the Legislative Decree 58/98 and arts. 152 sexies, septies and octies of the Issuers' Regulation are subject to the instructions on Internal Dealing.
The Bank has adopted specific regulations and internal procedures for the required reporting, with the adoption of the “Internal Dealing rules” which is published in the “Shareholders' Special Section" of the Bank's website (www.bper.it).
2.3 Significant holdings of share capital (art. 123 bis, paragraph 1.c),
Legislative Decree 58/98)
Pursuant to art. 30 of the Legislative Decree 385/93 and art. 12 of the articles of association, no one may hold shares for a total nominal value that exceeds the limit on participation established by law (1% of the share capital, though this limit does not apply to UCITS, for which, as we said, the limit is established in their individual regulations - see the previous paragraph).
There are no significant holdings of share capital, whether directly or indirectly, subject to notifications made pursuant to art. 120 of the Legislative Decree 58/98. The Bank is however aware of one shareholder, authorised to exceed the above limit, that owns more than 1% of share capital (specifically 1.99%).
2.4 Securities carrying special rights (art 123 bis, paragraph 1.d), Legislative
Decree 58/98)
At the time of this Report, no securities carrying special rights of control and/or other special power have been issued, nor multiple or increased voting shares.
The articles of association do not provide for the issue of multiple or increased voting shares.
2.5 Shares held by employees: mechanism for exercising voting rights (art.
123-bis, paragraph 1.e), Legislative Decree 58/98)
There are no special share ownership systems for employees or special mechanisms for exercising the voting rights of employee shareholders. Employee Members may give their proxy to another Member attending Shareholders' Meetings (as all other shareholders) but, pursuant to art. 24 of the articles of association and art. 2372.5 of the Italian Civil Code, they may not be proxyholders themselves. The same applies to the employees of BPER subsidiaries.
2.6 Restrictions on voting rights (art 123-bis, paragraph 1.f), Legislative Decree
58/98)
Pursuant to art. 30 of the Legislative Decree 385/93 and art. 24 of the articles of association, given the Issuer's legal status as a “Cooperative Bank”, each shareholder has the right to one vote, regardless of the number of shares held.
Pursuant to art. 24 of the articles of association and art 2538.1 of the Italian Civil Code, shareholders have the right to attend the Meeting and exercise their voting rights if they have been recorded in the Register of Members for at least 90 (ninety) days and for whom, in accordance with current legislative and regulatory requirements, by the end of the third market trading day prior to the date set for the Meeting at first calling or by some other deadline established by current regulations, the Company has received the communication from the intermediary authorised to keep accounts on which financial instruments are registered.
Members may be represented at the Meeting by another Member, in accordance with the law. Members of the Board of Directors, Board of Statutory Auditors or employees of the Company or of its subsidiaries cannot act as proxies. In any case no Member may represent more than five other Members, except in the case of legal representation, and voting by correspondence is not allowed.
Again pursuant to art. 24 of the articles of association, members of the Board of Directors may not vote at Shareholders' Meeting on resolutions regarding their responsibility.
Pursuant to art. 19 of the articles of association, even in the case of pledges and usufruct, the share voting rights remain with the shareholder concerned.
No other restrictions on voting rights are envisaged.
2.7 Agreements between shareholders (art 123-bis, paragraph 1.g), Legislative
Decree 58/98)
At the time of this Report, the Bank is not aware of any agreements between shareholders, or any such agreements published pursuant to art. 122 of Legislative Decree 58/98.
2.8 Change of control clauses (art 123-bis, paragraph 1.h), Legislative Decree
58/98) and provisions of the articles of association relating to takeover bids
(arts. 104, paragraph 1-ter, and 104-bis, paragraph 1)
At the time of this Report, neither the Bank nor its subsidiaries have signed any agreements that would become effective, be modified or lapse in the event of a change in control over the Issuer or its subsidiaries. The Bank's articles of association do not provide for the application of the neutralization rules contained in art. 104-bis, paragraphs 2 and 3 of Legislative Decree 58/98 in respect of takeover bids, nor do they derogate from the provisions on the passivity rule provided by art. 104, paragraphs 1 and 1-bis of Legislative Decree 58/98.
2.9 Mandates to increase share capital and authorisations to purchase treasury
shares (art. 123-bis, paragraph 1.m), Legislative Decree 58/98)
The Extraordinary Shareholders' Meeting of 3 September 2011 has granted to the Board of Directors, in accordance with article 2420-ter of the Italian Civil Code, the power, which can be exercised within a maximum of five years from the date of the resolution: (i) to issue, in one or more tranches, bonds convertible into ordinary shares of the Company, for a total maximum amount at par of Euro 250,000,000.00, to be offered to those entitled to them; and, therefore, (ii) to increase the share capital for payment, in one or more tranches, also in separate issues, for a total maximum amount of Euro 250,000,000.00 including any share premium, irrevocably and exclusively to serve the conversion of these bonds, by issuing ordinary shares of the Company with regular dividend and voting rights and the same characteristics as the ordinary shares of the Company in circulation at the issue date.
The Extraordinary Shareholders' Meeting held on 7 June 2014 approved an increase in share capital for payment of a total maximum amount of Euro 750,000,000.00, including any share premium, to take place by 31 December 2014, in one or more tranches, by means of an issue of new ordinary shares of a par value of Euro 3.00 each, to be offered in the form of a rights issue to those entitled to them pursuant to art. 2441 of the Italian Civil Code. The foregoing Extraordinary Shareholders' Meeting granted the Board of Directors the broadest possible powers to decide: (i) the issue price of the newly issued ordinary shares, including any share premium, taking into account, among other things, market conditions, the price performance of the Company's shares, its economic and financial results, as well as market practice for similar operations, nearer the time of the offer. The issue price will be determined by applying a discount to the theoretical ex-right price ("TERP") of the ordinary shares, calculated using current methods, based on the official market price on the trading day prior to the final decision or, if available, based on the official market price on the same day as the final decision is made. The issue price of each ordinary share, taking into account any share premium, cannot be lower than its par value (Euro 3.00);(ii) as a result of the provisions of paragraph (i), the portion of the price attributable to share capital, the maximum number of shares to be issued and the option allocation ratio, making any roundings that may be necessary; (iii) the timing for the execution of the increase in capital, in particular for the launch of the offering prior to the final deadline of 31 December 2014, and the subsequent offer of any unexercised rights to the market at the end of the subscription period. If by 31 December 2014, the increase in capital is not fully subscribed, the share capital will be increased by an amount equal to the subscriptions received.
On 19 June 2014 the Board of Directors set the final conditions of the cash increase in capital for a maximum of Euro 750 million, through the issue of new shares to be offered under option to those entitled to them, the option ratio and the other conditions.
The option offer of 145,850,334 newly issued ordinary shares of BPER was completed on 28 July 2014. During the offer period, which started on 23 June 2014 and ended on 18 July 2014, a total of 145,519,297 new Shares were subscribed, equal to 99.77% of the total number of shares offered, for a total of Euro 747,969,187.
In accordance with the provisions of art. 2441, third paragraph, of the Italian Civil Code, BPER has offered to the Stock Exchange 756,656 option rights not exercised during the Option Period. The unexercised rights were all sold at the first session of the Offer to the Stock Exchange held on 23 July 2014.
After the Offer to the Stock Exchange, a total of 331,037 newly issued ordinary shares from taking up the Unexercised Rights were subscribed, for a total of Euro 1,701,530.
The Offer closed with the entire subscription of the 145,850,334 new shares, for a total of Euro 749,670,717 so there was no need for the underwriting syndicate to intervene.
On 30 July 2014, after the end of the capital increase. the new composition of the share capital (fully subscribed and paid) at 28 July 2014 has been communicated to the market.
On 16 September 2014, given the resolution resulting from public deed under art. 2505 bis of the Italian Civil Code, as notarised by Franco Soli, Notary Public in Modena, repertory no. 43213, file no. 13353, in approving the merger with Banca popolare Emilia Romagna soc.coop. of Banca Popolare del Mezzogiorno S.p.A., Banca della Campania S.p.A. and Banca Popolare di Ravenna S.p.A., the Board of Directors resolved to increase the share capital by issuing ordinary shares with a par value of Euro 3.00 each, with regular dividend and voting rights and the same characteristics as those in circulation, which will be reserved to service the share exchange with the shareholders, other than the Merging Company: (i) Banca Popolare del Mezzogiorno S.p.A., up to 1,676,382 shares for a maximum of Euro 5,029,146; (ii) Banca della Campania S.p.A., up to 275,879 shares for a maximum of Euro 827,637; (iii) Banca Popolare di Ravenna S.p.A., up to 1,717,006 shares for a maximum of Euro 5,151,018.
On 17 November 2014 the parties signed the absorption into BPER of Banca Popolare del Mezzogiorno s.p.a. Banca della Campania s.p.a. and Banca Popolare di Ravenna s.p.a., recorded in the respective Companies Registers.
The merger took legal effect on 24 November 2014, when the merger deed was recorded by BPER on the Companies Register, but took retroactive tax and accounting effect from 1 January 2014. The merger deed has been published on the website www.bper.it - Investor Relations - Main Transactions Section.
As a consequence of the above transactions, the shares in the absorbed banks have been cancelled and new BPER shares, with normal dividend/voting rights, have been allocated in exchange to the non-controlling shareholders. Therefore the share capital of the Parent Company has increased by Euro 4,891,326.00 through issuing 1,630,442 new ordinary shares.
The current text of the articles of association, updated from time to time, is published on the Bank's website in the Governance - Documents section.
By resolution of the Board of Directors pursuant to art. 17 of the Bank's articles of association, the Bank may acquire or redeem its own shares on condition that such purchase or redemption does not exceed the amount of distributable profits and available reserves allocated for this purpose by the Shareholders' Meeting, and reported in the latest approved financial statements. The Board may place with others or cancel the shares purchased.
At 31 December 2014, the Bank held 455,458 treasury shares, representing 0.095% of the total number of shares making up the Bank's share capital, namely 481,308,435.
2.10 Management and coordination activities (art. 2497 et seq. of the Italian Civil
Code)
3
Adoption of codes of conduct (art 123-bis, paragraph 2.a), Legislative Decree
58/98)
At the date of this Report, the Bank has not adopted the code of conduct prepared by Borsa Italiana or any other codes of conduct.
The Bank and the companies within the BPER Group, with head offices in Italy, are not subject to non-Italian legislation that might affect the structure of their corporate governance.
Even though BPER does not consider it opportune to apply the Code of Conduct proposed by Borsa Italiana, also in consideration of its particular status as a cooperative bank, it believes that, overall and helped by the amendments made to the articles of association in recent years, the system of corporate governance adopted by the Company is in line with the principles contained in the Code, the recommendations made by the Supervisory Authority and national best practice.
4
Board of Directors
4.1 Appointments and replacements (art. 123-bis, paragraph 1.l), Legislative
Decree 58/98)
For the appointment and replacement of members of the Board of Directors, the Bank observes the provisions of arts. from 30 to 36 of the articles of association and the relevant implementing and transition rule at the foot of it.
Pursuant to art. 2365, paragraph 2 of the Civil Code, art. 40 of the articles of associations states that it is up to the Board of Directors to approve any adjustments of the articles of association to comply with legislative requirements, as well as their merger in the cases provided for in arts. 2505 and 2505-bis of the Italian Civil Code.
The Chairman and the Directors are elected at the Shareholders' Meeting from among the members and remain in office for three years. Their appointments expire on the date of the Shareholders' Meeting called to approve the financial statements for the final year of their mandates, and they may be re-elected. The Board is renewed partially each year over each three-year period, to the extent of six Directors the first year, seven Directors the second year and six Directors the third year, bearing in mind that the transitional rule implementing this system, which has been inserted at the foot of the articles of association, establishes 2011 as the first year, 2012 as the second and 2013 as the third, and so on for subsequent three-year periods. The Board of Directors elects from among its number, by an absolute majority of the serving directors, the Chairman and between one and three Deputy Chairmen. They remain in office until the end of their mandate as Directors.
In compliance with art. 35.5 of the articles, on 26 October 2010, the Board of Directors appointed as Secretary to the Board Mr. Gian Enrico Venturini, Deputy General Manager.
All the Directors must be members of the Bank and must possess the attributes required for their appointment pursuant to current regulations.
The composition of the Board of Directors has to ensure gender balance in accordance with current regulations.
In addition, pursuant to art. 36 of the articles of association and without prejudice to the other legal reasons for which they cannot be elected or for which their appointment would lapse, the following persons cannot be members of the Board of Directors:
• employees of the Bank, unless they are members of General Management;
• the directors, employees or members of supervisory committees, commissions or bodies of competing banks or companies, unless the Bank holds investments in such banks or companies, whether directly or via companies that are members of the BPER Group.
It should be noted that art. 36 of the Decree 201 of 27 December 2011 prohibits office bearers in management, monitoring and control bodies and top officials of companies or groups operating in the credit, insurance and financial services markets from accepting or exercising similar positions in competitors' companies or groups.
For the purposes of this ban, companies or groups are considered competitors when there is no control relationship in accordance with art. 7 of Law 287 of 10 October 1990 and they operate in the same markets
in terms of product and geographical area.
Members of the Board of Directors are elected from lists presented by members in accordance with the provisions of arts. 31 and 32 of the articles of association and shown below.
In particular, the presentation of lists must meet the following requirements:
• the candidates must be listed in numerical order.
• the list has to be presented by a minimum of 500 (five hundred) members, or by members who separately or together hold BPER shares representing not less than 0.50% of the share capital;
• the list must contain a number of candidates equal to the number of Directors to be elected, with a number of the less represented gender to ensure that the list complies with the gender balance at least to the minimum extent required by law, rounding up to the next unit in the event of a fractional number;
• the candidates, who must be listed in numerical order, must include at least two that are specifically identified as meeting the independence requirements established for statutory auditors in art. 148.3 of Legislative Decree 58/98, as well as any additional requirements contained in the applicable legislation and regulations that may be in force from time to time;
• the signature of each presenting member has to be authenticated by nominees of the Company, by the intermediaries authorised to keep accounts on which financial instruments are registered, or by notaries;
• together with the list, the presenting members must file at the registered offices of the Company all of the documents and declarations required by law, and in any case: (i) the declarations from each candidate accepting their candidature and confirming, under their own responsibility, the absence of reasons for which they cannot be elected or other incompatibilities, and that they meet the requirements for appointment established by these articles of association and by current regulations and whether they meet the Independence Requirements; (ii) a full description of the personal and professional characteristics of each candidate, with an indication of the directorships and audit appointments held in other companies; (iii) information on the identity of the members presenting the lists, indicating their percentage shareholding, to be confirmed according to the terms and methods established by current regulations.
It is worth recalling that art. 31, paragraph 2.d) of the articles of association makes reference to the terms and conditions required by law for the filing of lists at the registered office of the Company (at the date of this report, the legislation requires it to be deposited at least 25 days prior to the date of the Shareholders' Meeting at first calling).
Under art. 147-ter, paragraph 1-bis of Legislative Decree 58/98, Members can use a remote means of communication to submit voting lists, in accordance with the rules laid down and communicated in the notice that convenes the Meeting.
Each member or group of members can only present and vote one list of candidates. Each candidate may only appear on one list or, otherwise, will be ineligible for election.
Lists that satisfy the requirements of law and of the articles of association for admission are considered valid. The articles of association do not provide criteria for exclusion from the counting of the votes such as those permitted by art. 147-ter, paragraph 1 of Legislative Decree 58/98.
The election of the Board of Directors is conducted in accordance with art. 32 of the articles of association. In particular, if one or more lists are presented by the members, all of the Directors to be elected are taken,
for one who is taken from the list that obtains the second largest number of votes, always in the numerical order in which he is listed (known respectively as the "Minority Director" and the "Minority List") in accordance with art. 32.2.2. of the Articles of association.
In the event of a voting tie between lists, a ballot will be held by all the shareholders at the Meeting in order to establish a ranking for the candidates on these lists.
If, at the end of voting, a number of Board members belonging to the less represented gender and/or Directors who satisfy the Independence Requirements are not elected to ensure the presence on the Board of Directors of the related minimum number of Directors, as many elected candidates as necessary have to be excluded, replacing them with qualifying candidates from the same list as the candidate to be excluded, according to the order in which they are listed. Substitutions take place first for the less represented gender and then those who satisfy the Independence Requirements. In both cases, this substitution mechanism is applied firstly, in sequence, to each of the lists that have not contributed a Director who meets the requirement in question, starting with the one that received the most votes. If this is not sufficient or if both of the first two lists have contributed at least one Director who meets the requirement in question, the substitution is to be applied, in sequence, to both lists, starting with one that received the most votes. Within the lists, the substitution of candidates to be excluded is applied starting from the candidates with the highest progressive number. If, even by applying these substitution mechanisms, it is not possible to complete the minimum number of Board members belonging to the less represented gender and/or Directors who meet the Independence Requirements, the Meeting has to elect the missing Directors by resolution passed by a relative majority on the proposal of the members present. In this case, the substitutions apply, in sequence, to each of the lists, starting from the one that received the most votes and, within the lists, starting from the candidates with the highest progressive number.
If only one valid list is presented, all the directors to be elected are taken from that list.
If no valid lists are presented by the shareholders, the Board of Directors may present to the Shareholders' Meeting a pre-compiled voting card, also in electronic form, containing a non-binding list of candidates. In this case, all shareholders may alter all or part of the voting form, both deleting the candidates for which they do not intend to vote and, if desired, adding one or more new candidates in place of those deleted. The candidates obtaining the largest number of votes are elected. In the event of a tie between various candidates, the Meeting holds a second ballot to establish how they are to be ranked. If, at the end of voting, a number of Board members belonging to the less represented gender and/or Directors who satisfy the Independence Requirements have not been elected to ensure the presence on the Board of Directors of the related minimum number of Directors, as many elected candidates as necessary have to be excluded, replacing those that received the least votes with the first candidates not elected who meet the requirements. Substitutions take place first for the less represented gender and then those who satisfy the Independence Requirements. If, even by applying this substitution mechanism, it is not possible to complete the number of Directors to be elected, the Meeting has to elect the missing Directors by resolution passed by a relative majority on the proposal of the members present.
If no valid list is presented and the Board of Directors does not make a proposal pursuant to art. 32.4 of the Articles of association, or if, despite the presence of lists, the total number of nineteen Directors under the preceding provisions is not reached, the Meeting shall elect the missing Directors by a relative majority among the individual candidates proposed by the members present, subject to compliance with the minimum number of Directors belonging to the less represented gender and/or Directors who meet the Independence Requirements. In the event of a tie between various candidates, the Meeting holds a second ballot to establish how they are to be ranked.
If, during the year, one or more Directors are no longer available, they are to be replaced according to the provisions of art. 33 of the articles of association.
If the Director who is no longer available was taken from the list that obtained the highest number of votes, the Board of Directors, with the approval of the Board of Statutory Auditors, replaces him by choosing the Director to be co-opted from among persons not on the same list, making sure that the person chosen belongs to the less represented gender and/or meets the Independence Requirements if, as a result of the termination, there is no longer the required minimum number of Directors. The co-opted Director shall remain in office until the next Shareholders' Meeting, which will then replace the Director who is no longer available.
The Meeting votes on the replacement by a relative majority without any list restriction, choosing from among the candidates proposed by the members.
If the Director who has terminated was taken from the list obtaining the second highest number of votes, he is replaced by the first unelected candidate, according to the progressive numbering on the list of origin of the terminated Director, who complies with the provisions of paragraph 33 and belongs to the less represented gender and/or meets the Independence Requirements if the required minimum number of Directors has to be made up. If the candidate concerned fails to do so, the next unelected candidate takes over, according to the progressive numbering of the list, and so on.
If no candidature is submitted by the set deadline, the Meeting chooses from among the candidates proposed on the spot by the members present, making sure that the person chosen belongs to the less represented gender and/or meets the Independence Requirements if the required minimum number of Directors has to be made up.
Proposals of candidates by the Members follow the same terms and conditions as for the submission of lists for Board elections. For further details, see art. 33 of the articles of association.
The Directors taking over each assume the residual period of office of the person they replaced.
Pursuant to art. 34 of the articles of association, the members of the Board of Directors must satisfy the requirements of professionalism and integrity required by law and at least four of them must also meet the independence requirements established for statutory auditors in art. 148.3 of Legislative Decree 58/98. The Board of Directors ensures that newly appointed Directors meet the requirements of integrity, professionalism and independence required by law and by the articles of association, as well as their compatibility to hold office pursuant to art. 36 of the Decree Law 201 of 27 December 2011 (the so-called ban on interlocking).
As regards the self-assessment of the Board of Directors, and information on the best qualitative and quantitative composition provided by the Board and the desirable professional profiles of the Directors being appointed by the 2015 Shareholders' Meeting, please refer to paragraph 4.3 below.
In 2002 the Board of Directors adopted a “gentlemen's agreement” (made known at the Shareholders' Meeting held on 18 May 2002) whereby the Chairman and the Directors have agreed to abstain from applying for re-election to their respective roles on reaching the ages of 75 and 80, respectively. The Directors have in any case agreed to resign on reaching the age of 80. This personal commitment has been made on the honour of each Director from the end of the 2002 financial year.
Under the provisions of CONSOB communication no. DEM11012984 of 24 February 2011, we would point out that the Bank has not, to date, adopted a succession plan for executive directors, nor special arrangements in the event of their replacement prior to the normal expiry date.
4.2 Composition of the Board (art 123-bis, paragraph 2.d), Legislative Decree
58/98)
Pursuant to art. 30 and 35 of the articles of association, the Board of Directors consists of nineteen directors and elects the Chairman and up to three Deputy Chairmen from among its members.
The Board is renewed partially each year over each three-year period, to the extent of six Directors the first year, seven Directors the second year and six Directors the third year, bearing in mind that the transitional rule implementing this system, which has been inserted at the foot of the Articles, establishes 2011 as the first year, 2012 as the second and 2013 as the third, and so on for subsequent three-year periods. The Chairman and the Directors are elected at the Shareholders' Meeting from among the members and remain in office for three years. Their appointments expire on the date of the Shareholders' Meeting called to
approve the financial statements for the final year of their mandates, and they may be re-elected upon the expiry of such mandates.
At the end of 2014 and at the date of this Report, the composition of the Issuer's Board of Directors was and is presented in the following table, which indicates the dates of appointment and expiry of the mandate of each Director (for further information please read the attached table).
Name Position held
Date of appointment: Board of Directors§/Shareholders' Meeting of Term of office: approval of the financial statements at
Ettore Caselli Chairman 21/4/2012 31/12/2014
Alberto Marri Deputy Chairman * 15/4/2014 31/12/2016
Giosuè Boldrini Deputy Chairman * 20/4/2013 31/12/2014
Luigi Odorici Deputy Chairman * 16/4/2014 31/12/2015
Alessandro Vandelli Chief Executive
Officer* 12/4/2014 31/12/2014
Antonio Angelo Arru Director 20/4/2013 31/12/2015
Mara Bernardini** Director 12/4/2014 31/12/2016
Giulio Cicognani ** Director 21/4/2012 31/12/2014
Cristina Crotti** Director 12/4/2014 31/12/2016
Pietro Ferrari Director * 20/4/2013 31/12/2015
Elisabetta Gualandri ** Director 20/4/2013 31/12/2014
Giovampaolo Lucifero Director 12/4/2014 31/12/2016
Giuseppe Lusignani ** Director 12/4/2014 31/12/2016
Valeriana Maria Masperi ** Director 21/4/2012 31/12/2014
Giuseppina Mengano ** Director 21/4/2012 31/12/2014
(1)Fioravante Montanari ** Director 12/4/2012 31/12/2016
Daniela Petitto ** Director 20/4/2013 31/12/2015
Deanna Rossi Director * 20/4/2013 31/12/2015
(§) The date of the Board meeting that appointed the Chairman/Deputy Chairman/CEO (*) Members of the Executive Committee
(**) Independent Directors.
(1): Fioravante Montanari, a member of the Board of Directors of BPER and well-known businessman from Bologna, died on 29 September 2014. The Board of Directors remembers the professionalism, valuable contribution and support that he gave to the Bank over the years. The Board of Directors has decided not to coopt a replacement for Fioravante Montanari, since the size of the Bank's Board will gradually decrease to reflect the reduced complexity of the Group and the outcome of the rationalisation processes currently underway or planned. The number of directors will also be affected by the work necessary to comply with the related new Supervisory Instructions, to be implemented within the established time frames. This decision also took account of the proposed amendments to the articles of association that will be presented to the Shareholders' Meeting in April 2015.
No changes in the composition of the Board took place between the end of 2014 and the date of this report. The Bank deems “non-executive” those Directors who do not have mandates or perform functions, formally or in practice, relating to the operations of the Bank. At that time of approving this Report, there are no executive Directors other than the Chief Executive Officer and the members of the Executive Committee. For further information, see paragraphs 4.5 and 4.6 below.
As regards the independent Directors, see paragraph 4.7.
A summary description of the personal and professional characteristics of each Director is shown below, indicating their professional experience and skills, together with the offices held in other organisations, based on the latest information known to the Bank.
Ettore Caselli started his career in 1964 at Banco S. Geminiano e S. Prospero. He was appointed as a bank official in January 1971 and was the Manager of several major branches of that bank until July 1984.
In 1984 he joined Banca Popolare di Cavezzo as Deputy General Manager, and then as General Manager in October 1986.
In May 1987, following the absorption of that bank by Banca Popolare dell'Emilia, he became Central Management's representative in the Loans area. Becoming Deputy Central Manager in May 1992, he took responsibility for managing the Romagna Area.
In January 1995 he took the role of Central Manager, later becoming Deputy General Manager of the Bank and then General Manager from July 2003 until December 2007.
In October 2009 he was appointed as Deputy Chairman of the Bank.
Since 18 January 2011 he has been Chairman of the Board of Directors of Banca popolare dell’Emilia Romagna.
In 2012 he became an Officer of the Order of Merit of the Republic of Italy.
Currently he is also Chairman of Assopopolari - National Association of Cooperative Banks, Director di ABI - Italian Banking Association, Deputy Chairman of ICBPI - Istituto Centrale delle Banche Popolari Italiane s.p.a. and Chairman of the Advisory Board of ICBPI.
Offices currently held in the BPER Group: Chairman of BPER (Europe) International S.A.
Alberto Marri has a degree in Economics and Commerce. While at university, he also began working in the family firm, “Maglificio GIN MAR s.r.l.”, first as Administration Manager and later as a Director. He also attended courses in the Analysis of Financial Statements held by SDA Bocconi.
In 1984, he became a Director of Delta Gas S.p.A., a family business which manages and distributes natural gas. He subsequently became its CEO and then Chairman. Delta Gas was taken over by Thuga (Germany), a subsidiary of the multinational E.ON, and became Thuga Triveneto, of which he was Chairman until May 2006.
He has been a Director of a various consortiums and trade associations. He was formerly an independent director of META S.p.A. and Chairman of the Audit Committee until that company's absorption by Hera S.p.A.
He also served as a Director of Hera S.p.A., Hera comm S.r.l. and Banca della Campania S.p.A..
Other positions currently held include: Chairman and Chief Executive Officer of Fingas S.r.l.; Sole Director of Finenergie S.r.l. and Palazzo Trecchi S.r.l.; Director of Palazzo Foresti S.r.l.; Director of Galilei Immobiliare S.r.l.
Offices held in the BPER Group: Director of Banco di Sardegna S.p.A..
1995. He continued to run the professional firm founded by his father, Pier Alberto, back in 1932, providing advisory services to companies, individuals and public bodies with particular expertise in special transactions, corporate reorganisations and business solutions for companies in crisis.
Currently, "Studio Commerciale Associato Boldrini" consists of eight partners, with several associates and employees.
He has spoken at many important conferences and seminars on tax matters, public utilities and public sector accounting.
He has also served as Chairman of the Rimini Chamber of Accountants and the Emilia Romagna Regional Union of Chambers of Accountants and a member of the National Council of Italian Public Accountants. He is a Director of Marr S.p.A. and of Casa di cura Villa Maria S.p.A.
Offices currently held in the BPER Group: Director of Banco di Sardegna S.p.A..
Luigi Odorici has a degree in Economics and Commerce from Bologna University (1971). He was employed by Banca Popolare di Modena in December 1973.
After managing various branches of the Bank, he was Head of the Modena and Reggio areas for the analysis of loans with the Business Affairs Department from March 1991 to September 1995.
In 1995 he became Deputy Commercial Manager of Banca popolare dell'Emilia Romagna, then serving as Commercial Manager until 2004.
Later he was appointed Deputy General Manager of Banca CRV Cassa di Risparmio di Vignola until he was appointed Deputy General Manager of BPER in January 2008.
From 1 November 2011 to 31 December 2012 he was BPER's General Manager.
From 10 January 2012 to 15 April 2014 he was Chief Executive Officer of BPER, and became Deputy Chairman on 16 April 2014.
He has been Deputy Chairman of Unione Fiduciaria; Director of FITD - Fondo Interbancario di Tutela dei Depositi, Polis Fondi S.g.r., Cartasì S.p.A., PROMO S.c.r.l. - Società per la promozione dell'economia modenese, ABF Factoring S.p.A., Metelliana S.p.A., Banca CRV S.p.A., Meliorbanca s.p.a., Carispaq S.p.A. and Dexia Crediop S.p.A.; member of the Board of Directors and of the Executive Committee of ABI – Associazione Bancaria Italiana, and of the Board of the Modena Chamber of Commerce, representing the banking and insurance sectors.
Other positions currently held include: Chairman of BPER Services S.c.p.a. and Deputy Chairman of Banco di Sardegna S.p.A., a BPER Group company.
Alessandro Vandelli graduated with honours in Economics and Commerce from Modena University in 1984. He subsequently attended various management training courses. He has collaborated with business associations in the publication of various research papers and has lectured at university.
He has been an employee of the Bank since 1984, over the years filling numerous management positions: in 1992 he was Head of Accounts Analysis at the Credit and Loans Department; after gaining experience in the branch network, in 1996 he was called upon to start up the Corporate Finance sector; in 2005 he was Head of the Equity Investments and Special Projects Unit; in 2007 he took on the role of Central Manager with responsibility for the Group Strategy and Management Department; in 2008 he was appointed Deputy General Manager; in 2010 he transferred to Banco di Sardegna and served as General Manager.
On 1 July 2012 he returned to Banca popolare dell’Emilia Romagna as Deputy General Manager and Chief Financial Officer. Since 16 April 2014 he holds the position of Chief Executive Officer of BPER.
He has also been Deputy Chairman of Arca S.g.r. S.p.A. and Director of Arca Merchant S.p.A., Promac S.p.A., Finduck Group S.p.A., Imco S.p.A. and Alba Leasing S.p.A., as well as of such BPER Group companies as Metelliana S.p.A., Meliorbanca S.p.A., Banca della Campania S.p.A. and Em.Ro. Popolare S.p.A.; he has also served on the investment committees of various private equity funds.
He is a member of the Board of Directors and of the Executive Committee of ABI - Associazione Bancaria Italiana; Director of FITD - Fondo Interbancario di Tutela dei Depositi and Deputy Chairman of Unione Fiduciaria S.p.A.
Offices currently held in the BPER Group: Director of BPER Services S.c.p.a.
Antonio Angelo Arru graduated in Law on 23 June 1972. Professor of Criminal Procedure at the Faculty of Law at the University of Cagliari. Professor of Criminal Law at the Faculty of Political Sciences at the University of Cagliari. Member of the Bar of Cagliari and authorised to operate in the higher courts of law. A practising lawyer in Cagliari with Law Offices at Via Carlo Fadda 5.
He has been a member of the Board of Statutory Auditors of Cassa Depositi e Prestiti and, in the period from 2007 to 2010, of the President's Committee of ACRI - Associazione Casse di Risparmio Italiane; Councillor of the Cagliari Opera House, from which he resigned on 26 November 2013. From 15 March 2002 to 18 April
