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    Board evaluation

    Board evaluation

    Since 2011 Directors have been performing annually an evaluation of the functioning of the Board and its committees, as well as of their size and composition.

    The evaluation process is conducted with the support of a main advisor, chosen by the Board after consulting the Corporate Governance, social and environmental Sustainability Committee, also using questionnaires, personal meetings and/or interviews(1).

    The results of the evaluation for the fiscal year 2016 have been examined by the Board, after consulting the Corporate Governance, social and environmental Sustainability Committee, and have brought out some strength points (see table) and some areas for improvement.

    AREA

    FOCUS
    Size and composition
    of the Board of
    Directors
    Adequate number
    Appropriate ratio between executive and non-executive directors as well as independent and non-independent directors
    A good mix of skills and experiences
    Proper diversity
    Proper remuneration for Directors, proper appointment processes and criteria
    Number and nature of offices considered compatible with Directors' duties
    Operation and training of Directors Proper number and length of meetings, satisfaction for Directors' attendance and contributions
    A good internal atmosphere which promotes an open, direct, effective debate
    Effective and efficient decision-making process
    Prompt, high-quality information is received prior to each meeting
    Satisfaction with the new procedure on the evaluation of independence requirements for Directors
    The Board of Directors guarantees the implementation of a sound risk management system, and ensures its adequacy and efficiency
    Effective and detailed minutes
    Acknowledged usefulness and efficacy of the meetings of the Independent Directors, and favourable opinion of the introduction of meetings for non-executive directors only
    Appreciation for the preparation and the commitment of Directors
    Satisfaction with the 2016 training programme
    Appropriate allocation of delegated powers between Group CEO and Board of Directors
    Appreciation for the meetings held at the Group's premises abroad
    Proper organisation and management so as to achieve goals
    Appreciation for quality and continuity of relations with the Group CEO, GMC members, top managers and heads of
    control functions
    Satisfactory processes for the performance evaluation of the Group CEO and GMC members
    Role of the Chairman Recognised leadership, a role that promotes discussion and the convergence of individual opinions
    Good management of relations with stakeholders
    Strategy and
    knowledge of the Group
    Clear strategy and decision by the Board of Directors that reflect a balance between short and mid-long term
    Strong focus on strategic discussion in the Board of Directors, efficacy of Strategy Days
    Board Committees and Board of Statutory Auditors The structure of the Committees is adequate, and support for the Board of Directors decisions by means of opinions and presentations is appreciated
    Satisfaction with the activities of the Board of Statutory Auditors, and appreciation of the Chairman authoritativeness and expertise on the subject of control and risks

     

    Among the areas for improvement, the majority of the Directors identified the advisability to:

    • devote more time to discuss within Board meetings IT systems/cyber security issues as well as social and environmental sustainability matters;
    • harmonize in an even more efficient way the balance in the discussion between compliance/regulation and strategy/business topics;
    • further improve the structure of the process concerning the succession plan for the Group CEO and the Managing Director.

    The Board has started to define the steps to address the abovementioned issues as well as other minor ones pointed out by some Directors. Thus, by the way, the Board has reviewed the Regulation of the Board and its Committees in the section concerning the succession plan, adjusting the allocation of competences of the different corporate bodies involved.

    (1) In 2016, 89% of FTSE MIB companies have provided information about having conducted board evaluation, but only 62% of them have been supported by an external advisor (Source: Assonime – “Corporate Governance in Italy: Compliance, Remunerations and Quality of the Comply-or-Explain (year 2016)”)