Eni is an Italian company whose shares are listed on the Milan stock market and is subject to the authority of the "Commissione Nazionale per le Societa e la Borsa" (Consob) and to the monitoring activities of the management company of the market, "Borsa Italiana", whose Corporate Governance Code Eni complies with.
Eni's shares are also listed, trough an American Depositary Receipt (ADR) programme, on the New York stock exchanges (NYSE). Eni is consequently subject to the authority of the SEC (Securities Exchange Commission) and must comply with the U.S. regulations provided for foreign issuers whose securities are listed on the NYSE. Eni is consequently requested to disclose the main differences between its home governance standards and those followed by the US companies. Such comparison is published in the annual report (Form 20-F) that foreign issuers with securities listed on U.S. markets are required to file with the SEC, not later than the six months following the closing of the fiscal year, as per Section 13 (a) and 15 (d) of Securities and Exchange Act of 1934.
Eni's governance structure follows the traditional model as defined by the Italian Civil Code which provides for two main separate corporate bodies, the Board of Directors and the Board of Statutory Auditors to whom management and monitoring duties are respectively entrusted. This model differs from the US one-tier model which provides for the Board of Directors as the sole corporate body responsible for management and for the establishment of an Audit Committee within the same Board, for monitoring activities.
Below is a description of the most significant differences between corporate governance practices followed by US domestic companies under the NYSE standards and those followed by Eni.
Significant Differences in Corporate Governance Practices (Section 303A.11 of the NYSE Manual)
| NYSE STANDARDS | ENI STANDARDS |
| Under NYSE standards, U.S. listed companies' Boards must have a majority of independent directors. | Eni's By-laws, improving laws provisions, states that at least one member, if the Board is made up by up to five members, or three Board members (instead of two) in case the Board is made up by more than five members (instead of seven), shall have the independence requirement provided for Statutory Auditors of listed companies: a director may not be deemed independent if he/she or an immediate family member has relationships with the issuer that could influence their autonomous judgment, with its directors or with the companies in the same group of the issuer. Eni's Corporate Governance Code (Eni's Code) foresees further independence requirements, in line with the ones provided by the Borsa Italiana Code, that recommends that the Board of Directors includes an adequate number of independent non-executive directors in the sense that they do not maintain, nor have recently maintained, directly or indirectly, any business relationships with the issuer or persons linked to the issuer, of such a significance as to influence their autonomous judgment. In accordance with Eni's By-laws, the Board of Directors periodically evaluates independence of Directors. Eni's Code also provides for the Board of Statutory Auditors to verify the proper application of criteria and procedures adopted by the Board of Directors to evaluate the independence of its members. The results of the assessments of the Board shall be communicated to the market. |
Non Executive Directors Meetings
| NYSE STANDARDS | ENI STANDARDS |
| Non-management directors, including those who are not independent, must meet at regularly scheduled executive sessions without management. In addition, if the group of non-management directors includes directors who are not independent, independent directors should meet separately at least once a year. | As provided by Eni's Code the independent Directors may hold meetings without the other Directors: this faculty was exercised on January 22, 2009. |
Nominating/Corporate Governance Committee
| NYSE STANDARDS | ENI STANDARDS |
| U.S. listed companies must have a nominating/corporate governance committee composed entirely of independent directors that are entrusted, among others, with the responsibility to identify individuals qualified to become Board members and to select or recommend director nominees for submission to the Shareholders' Meeting, as well as to develop and recommend to the Board of Directors a set of corporate governance guidelines. | This provision is not binding for non-U.S. private issuers. The Borsa Italiana Code allows listed companies to maintain a Board committee for directors' nominees proposals, in case the Board itself would register some possible difficulties, in the shareholders' submission of nominees proposals. Eni has not set up a nominating committee, considering the nature of its shareholding as well as the circumstance that, under Eni's By-laws, directors are appointed by the Shareholders' Meeting based on lists presented by shareholders. |
| NYSE STANDARDS | ENI STANDARDS |
| Listed U.S. companies must have an audit committee that satisfies the requirements of Rule10A-3 under the Securities Exchange Act of 1934 and that complies with the further provisions of the Sarbanes-Oxley Act and of Section 303A.07 of the NYSE Listed Company Manual. | In its meeting of March 22, 2005, Eni's Board of Directors, making use of the exemption provided by Rule 10A-3 for non-U.S. private issuers, has identified the Board of Statutory Auditors as the body that, starting from June 1, 2005, is performing the functions required by the SEC rules and the Sarbanes-Oxley Act to be performed by the audit committees of non-U.S. companies listed on the NYSE.. Under Section 303A.07 of the NYSE Listed Company Manual audit committees of U.S. companies have further functions and responsibilities which are not mandatory for non-U.S. private issuers. |
Code of Business Conduct and Ethics
| NYSE STANDARDS | ENI STANDARDS |
| The NYSE listing standards require each U.S. listed company to adopt a code of business conduct and ethics for its directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. | Eni's Code of Ethic – adopted on March 14, 2008, replacing the previous version of 1998 –represents a clear definition of the value system that Eni recognizes, accepts and upholds and the responsibilities that Eni assumes internally and externally in order to ensure that all business activities are conducted in compliance with laws, in a context of fair competition, with honesty, integrity, correctness and in good faith, respecting the legitimate interests of all stakeholders with which Eni relates on ongoing basis: shareholders, employees, suppliers, customers, commercial and financial partners, and the local communities and institutions of the Countries where Eni operates. These values are stated in the Code of Ethics and all the people working for Eni, without exception or distinction, starting from Directors, senior management and members of Company's bodies, as also requested by the SEC rules and the Sarbanes-Oxley Act, are committed to observing and enforcing these principles within their function and responsibility. The Guarantor for the Code of Ethics – that is the Watch Structure of the "Model 231" for the organizational, management and control according to Legislative Decree No. 231/2001 – acts for the protection and promotion of the above mentioned principles and every six months presents a report on the implementation of the Code to the Internal Control Committee, to the Board of Statutory Auditors and to the Chairman and the CEO, who reports on this to the Board of Directors. |
Glossary
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Last updated on 15/12/09