Enel’s organizational and corporate governance model ensures that sustainability issues are appropriately taken into consideration in all relevant company decision-making processes, by defining specific tasks and responsibilities for the main corporate governance bodies.
The Board of Directors plays a central role in corporate governance as the body vested with powers related to the strategic, organizational and control policies of the Company and Group, and pursues the sustainable success of the same. In this context, the Board of Directors takes into account the need to pursue sustainable success particularly: (i) when defining Company and Group strategies; (ii) when drawing up the remuneration policy for the Chief Executive Officer/General Manager and Key Management Personnel, defining specific sustainability objectives the achievement of which is linked to a significant component of the variable pay; and (iii) with regard to the Company’s Internal Control and Risk Management System (“SCIGR”), aimed at the effective and efficient identification, measurement, management and monitoring of the main corporate risks, including those of an ESG nature.
Enel applies diversity criteria, also in relation to gender, in the composition of the Board of Directors, in line with the priority goal of ensuring adequate competence and professionalism of its members and in compliance with its Diversity Policy, approved in 2018. The Board of Directors, whose term expires with the approval of the financial statements for the 2022 financial year, in providing shareholders with its guidance on the optimal size and composition of the Board of Directors, with a view to its renewal by the Ordinary Shareholders’ Meeting scheduled for May 2023, expressly took into account the criteria set out in the Diversity Policy. These guidelines, which include sustainability among the competencies deemed relevant, are summarized in a special document that was published in good time on the Company’s website in anticipation of the Shareholders’ Meeting called to renew the Board.
In order to provide Directors with an adequate overview of the Group’s business sectors, including sustainability issues, a comprehensive induction program was organized commencing in the second half of 2020, followed by specific examination of the topics of corporate governance and climate change during 2021. During 2022, the induction program continued with further examination of the topics of cyber security and risk governance. Furthermore, in order to regulate the way in which the Company engages with institutional investors and with all shareholders and bond holders, in March 2021 the Board of Directors adopted a specific Policy (called “Engagement Policy”). In this regard, during 2022, the Company maintained an ongoing dialogue with institutional investors, also with reference to certain profiles concerning sustainability, with a particular focus on climate change. The Board of Directors has also established internal board committees with the power to investigate, propose and advise, in order to ensure an adequate internal division of its functions, as well as a related parties committee. In particular, the following committees have been established:
- Corporate Governance and Sustainability Committee, which among other things assists the Board of Directors on sustainability issues, including issues relating to climate change and the dynamics of the Company’s interaction with all stakeholders. More specifically, with regard to sustainability issues, the Committee examines: (i) the guidelines of the Sustainability Plan and the materiality matrix – which identifies the material topics for stakeholders in light of the Enel Group’s industrial strategies – periodically assessing achievement of the objectives defined in the Plan itself; (ii) the way in which the sustainability policy is implemented; (iii) the general outline and structure of the content in the Non-Financial Statement and the Sustainability Report, which may be summarized in a single document. In 2022, it addressed sustainability issues in 4 of the 6 meetings held.
- Control and Risks Committee, which is tasked, among other things, with supporting the assessments and decisions of the Board of Directors relating to the SCIGR, also with regard to risks that may be relevant from a sustainability perspective, and to the approval of periodic financial and non-financial reports. During 2022 it dealt with sustainability issues in 8 of the 14 meetings held;
- Nomination and Compensation Committee, which is tasked, among other things, with supporting the Board of Directors in its assessments and decisions relating to the size and optimal composition of the Board itself and its Committees, as well as the remuneration of Directors and Key Management Personnel. In this regard, the remuneration policy for 2022 provides for specific sustainability targets the achievement of which is linked to a significant component of the variable pay of the Chief Executive Officer/General Manager;
- Related Parties Committee, which performs the tasks required by the CONSOB regulations and by the specific Enel procedure governing transactions with related parties. Furthermore, in line with the power structure currently in force within the Company:
- the Chairman of the Board of Directors acts as a link between the executive and non-executive directors and is responsible for ensuring the effective operation of the board; he also plays a proactive role in the process of approving and monitoring corporate and sustainability strategies;
- the Chief Executive Officer is primarily responsible for the management of the Company and acts as the director in charge of the establishment and maintenance of the SCIGR. Also, in exercising the powers granted, he has defined a sustainable business model by identifying a strategy aimed at guiding the energy transition to a low carbon model;
- the Innovability® Function (Innovation and Sustainability), which reports directly to the Chief Executive Officer, manages all activities relating to sustainability and innovation. The Holding units responsible for Enel S.p.A.’s operations, particularly the sustainability, circular economy, and community relations processes, play a guidance and coordination role for the Sustainability and Innovation units located in the various countries and Business Lines. In particular, the Holding’s Sustainability Planning and Performance Management and Human Rights unit, responsible for the management of sustainability planning, monitoring and reporting processes, including compliance with the European taxonomy, as well as the management of ESG ratings, sustainability indices and the Human Rights Policy, also reports to the Group’s Chief Financial Officer (CFO), in order to ensure the ever-greater integration of these issues into corporate strategies and corporate reporting;
- the Global Business Lines, Countries, Global Service Functions and Holding Functions integrate ESG factors into their decision-making and operating processes, to create long-term sustainable value, thanks to the presence of dedicated Sustainability structures in all Countries, Business Lines and Global Service Functions. At the local level, the expectations of the various stakeholders are identified, and specific sustainability plans defined, in line with the Group strategy.
With specific reference to governance for the management of climate change, please refer to the “Zero emissions target” chapter of this document.
Furthermore, the Group CEO chairs the Cyber Security Committee, which consists of the Group’s front line and the purpose of which is to approve the IT security strategy and periodically check the progress of its implementation. For more information on the activities carried out by the corporate bodies, please refer to the Enel Report on Corporate Governance and Ownership Structure, available at www.enel.com, governance section, as well as the chapter on “Sound Governance” in this document.