The Control and Risks Committee appointed by the Board of Directors on 27 April 2021 consists of three non-executive directors of which two independent, including the Chairman:
- Angelo Renoldi – chairman, independent non-executive director;
- Alceo Rapagna – independent non-executive director;
- Cristina Rossello – non-executive director.
Members of the committee hold office until the expiry of their mandate as directors and, therefore, until approval of the financial statements for the year ending 31 December 2023.
The Control and Risks Committee has consultative and advisory functions vis-à-vis the Board of Directors, with the task of supporting, through adequate preliminary analysis, the assessments and decisions of the Board of Directors with regard to adequacy of the internal control and risk management system and definition of its guidelines, as well as those regarding approval of the periodic financial reports.
Within the terms of its competence, the Committee coordinates its activity with that of the following persons and bodies: the Board of Statutory Auditors; the external audit firm; the Head of Internal Audit; the Director in charge of the system of internal control and risk management; and the Manager in charge of financial reporting.
The Committee has been tasked with the following duties:
- after consulting the Manager in charge of preparation of the corporate accounting documents, the independent auditors and the audit body, to assess that the accounting principles are used correctly and consistently in the preparation of the separate financial statements and the consolidated financial statements;
- to assess that the periodic financial and non-financial information correctly represents the business model, the company’s strategies, the impact of its activities and its performance;
- to examine the content of the periodic non-financial information of significance for the internal control and risk management system;
- to express opinions on specific matters relating to identification of the main company risks and to support the assessments and decisions of the Board of Directors as regards management of risks arising from detrimental facts that have come to its knowledge;
- to examine the periodic reports and those of particular significance drawn up by the Internal Audit function;
- to monitor the independence, adequacy, effectiveness and efficiency of the Internal Audit function;
- to report to the Board of Directors, at least at the time of approval of the annual report and the half-year financial report, on the activities performed and the adequacy of the internal control and risk management system;
- to support the Board of Directors when examining and approving industrial plans with regard to analysis of issues of significance for the generation of long-term sustainable value.
In 2020 the Control & Risks Committee held 11 meetings coordinated by the Chair, duly minuted, with an average duration of two hours, with the participation from time to time of the members of the Board of Statutory Auditors, the Head of Internal Audit, the Group Data Protection Officer; it also met with the Ernst & Young auditing firm for the 2019-2027 nine-year engagement, and the heads of some corporate functions.
During 2020, the Control and Risks Committee:
- approved the 2020 annual Internal Audit activities programme for the Company and its subsidiaries drawn up by the Head of Internal Audit and verified its implementation. The 2020 audit plan for the Parent Company and its subsidiaries envisages action covering seven audit areas:
- (i) Operational audit: analysis of corporate processes and assessment of their effectiveness (degree of attainment of objectives) and efficiency (costs, timing, resources used);
- (ii) Compliance audit: application of certain operational provisions and guidelines by the Parent Companyand Group companies;
- (iii) Compliance audit 231: application of Lgs.Decree 231/2001 in support of the supervisory bodies of the Parent Company and the subsidiaries;
- (iv) Financial audit: the application of Italian Law 262/05, in support of the Manager in charge of preparation of the corporate accounts;
- (v) Fraud;
- (vi) IT;
- (vii) Risk Assessment.
- Analysed the work performed by Internal Audit in 2020, agreeing with the recommendations made and proposing recommendations of its own. Examined the structure and activities of Internal Audit, also to provide support for the supervisory bodies of the Parent Company and the subsidiaries, risk management activities and the compliance activity of the operating processes. Acknowledged the operational provisions implemented by the Company during the year.
- Examined the preliminary analysis illustrated by corporate management and approved the impairment testing procedure for the separate financial statements as at and for the year ended 31 December 2019 adopted by the Company, noting that the final measurements and valuations relating to the eventual impairment of tangible and intangible assets and equity investments would be the subject of specific examination and approval by the Board of Directors.
- Examined risk reporting at 31 December 2019 and the annual report of the Financial Risks Committee without finding irregularities.
- Reviewed the 2019 annual report and the report at July 2020 prepared by the Control & Risks Committee without finding irregularities.
- Analysed the risk assessment results presented and the report drawn up by the Head of Internal Audit. The scope of activity included both the Parent Company and the Italian subsidiaries.
- Took cognisance of the report prepared by the Head of Internal Audit, Paolo De Benedetti, on the self- assessment of the Mondadori Group’s internal control and risk management system.
- Took cognisance of the Group Data Protection Officer’s report on activities and related department.
- Analysed the findings of the external auditors in the report on the key issues that emerged during the audit. No failings were observed in the internal control system in terms of financial disclosure, and there were no uncertainties worthy of note regarding business continuity.
- Assessed the principles, methods and reporting procedures for the Non-Financial Statement Lgs.Decree 254/16.
- Held meetings with company managers to discuss matters relating to their specific areas of business.
- Performed preparatory activities to support the assessments and decisions of the Board of Directors relating to the corporate changes that took place in 2020.
- Examined the recommendations in the letter of the Chair of the Corporate Governance Committee with regard to the 7th Report on the Application of Corporate Governance and the “as is” situation of the Mondadori Group in respect of the 2019 recommendations of the Chair of the Corporate Governance Committee.
- Analysed start-up activities for the 2020 risk assessment process.
- Examined the main new features of the new Corporate Governance Code;
- Analysed the general market and industry scenario and management of the Group risk management activity in the “post-emergency” situation.
- Examined the Consob document of 9 April 2020 “COVID 19 – Call for attention to financial disclosure”.
- Examined the document drawn up by the Head of Internal Audit on the effects of the COVID-19 epidemic on the businesses of the parent and the subsidiaries.
- Verified the latest update on the Anti-Corruption Compliance Program.
Five committee meetings are planned for 2021.