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Borsa Italiana: Committee For Corporate Governance Approve Revisions To The Code Of Conduct

Date 30/07/2002

The Committee for the Corporate Governance of Listed Companies, convened on July 24 at Borsa Italiana's, chaired by Professor Stefano Preda, approved revisions to the Code of Conduct issued in 1999.

With reference to national and international best practice, the main amendments refer to:

  • Independent directors: the committee required stricter criteria for the evaluation, made by each board, of the independence of its members; it also recommended that in the boards of companies controlled by other listed companies there should be present a sufficient number of independent directors to allow the establishment of a committee for internal control exclusively composed of independent members
  • Internal control: the committee provided for a new definition of "internal control" in line with international standards and specified the duties and the responsibilities of the board to it; it also required the committee for internal control, composed of non executive directors, the majority of whom must be independent, to previously verify the accounting principles adopted also at group level
  • Transactions with related parties: companies are required to define general criteria for identifying transactions which require the approval of the board of directors; furthermore, when required by the nature, entity and characteristics of the operation, the recommendation is to require a fairness opinion from an advisor (bank, auditing firm, other expert) and a legal opinion from a lawyer
The Committee approved these recommendations and invited Borsa Italiana to apply these updated processes to listed companies in view of the upcoming legislative reforms of Italian corporate law.