BOARD OF DIRECTORS REPORT ON THE SYSTEM OF CORPORATE GOVERNANCE AND ADHERENCE TO THE CORPORATE GOVERNANCE CODE FOR LISTED COMPANIES IL SOLE 24 ORE S.P.A. CONTENTS! " # # # $ % % & %! " # " $ " % "
INTRODUCTION This report (hereinafter the Report ) describes the system of corporate governance of Il Sole 24 ORE S.p.A. (hereinafter the Company or Il Sole 24 ORE ) in effect as of the start of trading of special shares of the Company on the Mercato Telematico Azionario (MTA) segment (i.e. screen-based trading) of the stock exchange managed by Borsa Italiana S.p.A. Said system has been adopted by the Company and has led to a series of principles, rules, and procedures that are in line with the principles defined by the corporate governance code for listed companies (Codice di Autodisciplina delle Società Quotate, hereinafter the Corporate Governance code ) prepared by the Corporate Governance Committee of Borsa Italiana S.p.A., which the Company has decided to adopt as approved on 20 August 2007. In particular, this system focuses on: (i) the guiding role that the Board of Directors plays in corporate strategy; (ii) transparency in operating decisions within the company and as concern the market; (iii) the efficiency and efficacy of the internal control system; (iv) the rigorous governance of potential conflicts of interest; and (v) clear rules and procedures for conducting transactions with related parties and the handling of corporate information. SECTION I GOVERNANCE STRUCTURE 1. OWNERSHIP STRUCTURE As of the date of publication of the related prospectus, share capital of the Issuer, which has been wholly subscribed and paid in, totalled 26,000,000 and was divided into 98,241,723 shares, of which 90,000,000 ordinary shares and 8,241,723 special shares, without indication of a nominal value. The 90,000,000 ordinary shares are held by the sole shareholder Confederazione Generale dell Industria Italiana (hereinafter Confindustria ). The remaining 8,241,723 special shares, representing 8.4% of the company s share capital, are held by the Company. In accordance with Article 2357-ter(2) of the Italian civil code, voting rights for such shares have been suspended. On 30 July 2007, the shareholders authorised a divisible increase in share capital for up to 9,123,787.40, i.e. from 26,000,000 to a maximum of 35,123,787.40, by issuing up to 35,091,490 special shares without a specified par value, with standard rights, and without option rights pursuant to Article 2441(4) of the Italian civil code. Said capital increase is to be at an issue price per share of no less than 0.26, is to cover the implicit book value, and is to service the global public offering of Company shares on the MTA segment of the Italian stock exchange. 2. COMPANY ORGANISATION The Company has adopted a traditional system of corporate governance. The organisation of the Company complies with prevailing laws and regulations concerning publicly-listed issuers as follows: - Shareholders: who hold ordinary and extraordinary meetings in order to pass resolutions on the issues specified by applicable law and by the Company s Articles of Association; - Board of Directors: which has the broadest powers of Company administration, including the right carry out all acts appropriate to achieving the Company s 2
objectives, with the exception of those acts reserved, by law or by the Articles of Association, to the Shareholders; - Board of Statutory Auditors: which is responsible for overseeing (i) observance of laws and the Articles of Association, as well as of the principles of proper administration; (ii) the appropriateness of the Company s organisational structure, its system of internal controls, and its system of accounting and administration; (iii) the appropriateness of the instructions provided to subsidiaries concerning the information to be provided in complying with disclosure obligations; as well as for verifying (iv) the actual methods of implementing the rules of corporate governance set forth in the Corporate Governance code. Auditing of the accounts has been entrusted to a specialist firm listed on the related register kept by CONSOB as appointed by the shareholders on 30 July 2007 upon recommendation of the Board of Statutory Auditors. SECTION II IMPLEMENTATION OF THE RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE 1. THE BOARD OF DIRECTORS 1.1 Role and functions (Article 1 of the Corporate Governance code) The Company s Board of Directors plays a central role in corporate organisation and is responsible for the functions of strategic and organisational guidance, was well as for ensuring the existence of the controls needed to monitor the performance of the Company and of the Group. Given this role, the Board of Directors is to meet regularly and is to operate and be organised in such a way as to ensure the effective performance of its duties. Pursuant to Article 28 of the Articles of Association in effect as of the start of trading on the MTA (hereinafter the Articles of Association ), the Board of Directors is vested with all powers of ordinary and extraordinary administration of the company, without exception, and with the right to carry out any and all deeds it should deem appropriate in order to achieve the Company s objectives, with the sole exclusion of those acts reserved by law exclusively to the Shareholders. Article 15 of the Articles of Association further states that resolutions concerning mergers and spin-offs in the cases defined by Articles 2505, 2505-bis and 2505-ter of the Italian civil code, the establishment or closure of secondary offices, the reduction of share capital in the event of shareholder withdrawal, adaptations of the Articles of Association to changes in laws and regulations, adaptations of the Articles of Association to changes in legislation, and the transfer of the Company s headquarters within Italy may, within the limits of the law, also be approved by the Board of Directors. In accordance with the principles established by Article 1.C.1 of the Corporate Governance code, the Board of Directors, within the scope of its activities, is to: examine and approve the strategic, industrial, and financial plans of the Company and the group it leads, as well as the Company s system of corporate governance and the structure of the group; assess the appropriateness of the organisation, administration, and general accounting of the Company and its subsidiaries of strategic importance as prepared by the Chief Executive Officer, particularly as concerns the system of internal controls and the management of conflicts of interest; 3
grant and revoke powers for the Chief Executive Officer and define related limits and operating procedures, as well as establish the frequency, which may be no greater than quarterly, with which the Chief Executive Officer must report to the Board of Directors on the activities carried out as part of the execution of the powers assigned; determine, after hearing the opinion of the Board of Statutory Auditors, the remuneration of the Chief Executive Officer and other members of the board with special responsibilities; evaluate the general performance of operations, taking particular account of the information received from the Chief Executive Officer, while also periodically comparing actual results with forecasts and targets; examine and approve the transactions of the Company and its subsidiaries when such transactions are of strategic importance to the Company s financial performance and standing, paying particular attention to situations in which one or more directors have an interest on their own behalf or on the behalf of third parties, as well as to transactions with related parties generally; to that end, the board is also to establish the general criteria for identifying transactions of significant importance; evaluate, at least once a year, the size, composition, and functioning of the Board of Directors itself and its various committees, expressing any opinions on the types of people that are deemed to be appropriate members of the board; provide information concerning corporate governance as regards the number of meetings of the Board of Directors held during the year and the level of attendance of each director; and exercise the other powers assigned to it by law and by the Articles of Association. In accordance with Article 35 of the Articles of Association, the Board of Directors is to provide the Board of Statutory Auditors with information concerning the activities performed and the transactions of most significant impact on the financial performance and standing of the company and its subsidiaries, particularly transactions in which company directors have a direct interest, on their own behalf or on behalf of third parties, or that have been influenced by the party exercising direction and coordination. This information is to be provided by the board and other competent bodies routinely in conjunction with the meetings of the Board of Directors and the Executive Committee, if applicable, which are to be held at least quarterly, with such fact to be recorded in the minutes of the respective meetings. Information provided to the Board of Statutory Auditors on occasions other than during the meetings of the Board of Directors and of the Executive Committee is to be provided in writing to the Chairman of the Board of Statutory Auditors. 4
1.2 Appointment and composition of the Board of Directors (Articles 2 and 6 of the Corporate Governance code) The Board of Directors in office since the start of trading of the Company s shares on the MTA is comprised of 14 members. The Articles of Association allow for the Board of Directors to comprise 14 members, until a 15 th member is appointed by the Ordinary Shareholders Meeting. The 15 th member should be appointed, in accordance with the principle of protecting minority interests, at the first possible Ordinary Shareholders Meeting and, in any case, during the Shareholders Meeting called to approve the Annual Report 2007 at the latest. In accordance with Article 22 of the Articles of Association, the appointment of the 15th member should be made with the approval of the relative majority of the Shareholders Meeting. In accordance with the Articles of Association, directors are appointed for a period of three financial years, unless a shorter period is specified at the time of appointment. Directors may be re-elected. In accordance with Article 22 of the Articles of Association, appointment of members of the Board of Directors shall be done by voting on lists of candidates, with the candidates appearing on such lists in accordance with a sequential numbering system. Each list must indicate which of the first three candidates listed meet the prerequisites of independence, which must be the same number as those that are required by law. The list may not include more than fifteen candidates. Lists may be presented by shareholders representing at least one-fiftieth of capital with voting rights in ordinary meetings of shareholders or the lower proportion of capital required by applicable laws and regulations to such end. The lists must include the following: - information concerning the identity of the shareholder(s) presenting the lists, along with an indication of the total share held and a certification demonstrating ownership of such share; - a declaration from the shareholders other than those who hold, individually or jointly, a controlling or relative majority interest testifying to the absence of connections as defined by applicable laws and regulations; - a full description of the personal and professional qualifications of the candidates, as well as a declaration of such candidates as to their possession of the qualifications required by applicable law and these Articles of Association and of their acceptance of said candidacy. Lists presented that fail to comply with the provisions above shall be considered null and void. Shareholders may not present and vote for more than one list, including through a trust or other intermediary. Shareholders belonging to the same group or joined by a shareholder agreement concerning shares in the company may not present and vote for more than one list, including through a trust or other intermediary. Votes that fail to comply with the provisions herein shall not be awarded to any of the lists. Candidates may not appear on more than one list, and acceptance of candidacy on more than one list shall be cause for the ineligibility of the candidate concerned. 5
The election of directors is to be conducted as follows: (i) a number of directors equal to the total number of members on the Board of Directors less one shall be selected, in the order in which they are listed, from the list that obtains the greatest number of votes; (ii) the remaining member shall be taken from the list that obtains the second highest number of votes, on the condition that this number is at least equal to half of the minimum proportion of capital required for the presentation of the list of candidates. The Board of Directors has deemed that a vote by lists both complies with the provisions of Article 147-ter(1) of Italian legislative decree no. 58 of 24 February 1998 (hereinafter TUF for Testo Unico della Finanza, i.e. the Italian consolidated finance act) and avoids the need for an appointment committee, thereby ensuring that minority interests are able to be represented on the Board of Directors. The members of the board were appointed by the shareholders on 30 October 2007 and are to remain in office until approval of the financial statements for the year ending 31 December 2009. These directors are listed in the table below, along with an indication of any executive directors and of the independent directors as required by the Corporate Governance code: First & last names Position Role Giancarlo Cerutti Chairman of the Board of Directors Executive Director Claudio Calabi Chief Executive Officer Executive Director Luigi Abete Director Non-executive Director Maurizio Beretta Director Non-executive Director Diana Bracco Director Non-executive Director Matteo Giovanni Colaninno Director Non-executive Director Nicola De Barlolomeo Director Non-executive Director Antonio Favrin Director Non-executive Director Paolo Lamberti Director Non-executive Director Gaetano Maccaferri Director Non-executive Director Francesco Profumo Director Independent Non-executive Director Marco Salomoni Director Independent Non-executive Director Luca Sacconi Director Non-executive Director Paolo Zegna Director Non-executive Director 6
All of the directors are to dedicate the time needed to effectively carry out their duties, with the awareness of the responsibilities inherent in the positions held. They are also kept constantly informed of the leading changes in laws and regulations that concern the Company and the execution of their duties. The directors are to carry out their duties autonomously and in full knowledge of the facts, while pursuing the primary objective of creating value for shareholders over the medium to long term. 1.3 Meetings of the Board of Directors During the 2006 financial year, the Board of Directors met seven times, with such meetings including the regular participation of the various directors and the presence of the Board of Statutory Auditors. In 2007, eight meetings of the board had been held as of August. In accordance with Article 25 of the Articles of Association, meetings of the Board of Directors are to be convened by the Chairman in writing by registered mail sent to the domiciles of each director and standing statutory auditor at least six days prior to the date set for the meeting itself. In urgent cases, meetings may be convened by telegram, fax, or when expressly allowed by each individual recipient electronic mail sent at least six hours prior to the meeting. The meetings of the Board of Directors may also be held by tele- or video-conference on the condition that all participants can be identified and are able to follow the discussion of the agenda and intervene in real time. For the validity of resolutions of the Board of Directors, the presence of the majority of the members in office is required. Resolutions are to be deemed valid when approved by majority vote of those present. The Chairman is to ensure that the directors are provided with sufficient information in a timely manner so that the Board is able to pass resolutions with due awareness of the topics to be discussed. 1.4 Non-executive directors (Article 2 of the Corporate Governance code) The Board of Directors is comprised of non-executive members, with the exception of the Chairman and the Chief Executive Officer. The number and the authority of such non-executive directors ensures that the decisions of the board will be balanced, particularly as concerns the areas in which conflicts of interest could arise. The non-executive directors are to contribute their specific technical and strategic skills in meetings of the board, so as to promote an examination of the items for discussion from different points of view and to pass informed resolutions that are in line with the company s best interests. 1.5 Independent directors (Article 3 of the Corporate Governance code) The Company s Board of Directors has two independent members. Specifically, independent directors are members of the Board who do not currently have, nor have recently had, either direct or indirect relations with the Company or with parties connected with the Company that could compromise their current ability to pass independent judgment, while also taking account of the items listed under Article 3.C.1 of the Corporate Governance code. So as to reinforce these guarantees of independence, Article 22 of the Articles of Association states that the independent directors must also not be individual business 7
owners who belong to Confindustria or to regional or industry organisations under Confindustria, nor shareholders with a controlling interest, executive directors, or employees of companies belonging to said association or organisations. Finally, in accordance with the Corporate Governance code, the conditions have not been met such that it would be necessary to appoint a lead independent director, given the fact that the Chairman of the Board of Directors does not act as Chief Executive Officer, nor does such person have a controlling interest in the Company. 1.6 Powers and Company representation (Article 2 of the Corporate Governance code) Article 30 of the Articles of Association states that the Board of Directors may delegate its responsibilities in whole or in part to an Executive Committee, with the exception of those responsibilities that are barred from delegation by law or by the Articles of Association. The Board of Directors may also appoint one or more of its members to be managing directors and may grant said members the responsibilities and remuneration as required by law. On 30 October 2007, the Shareholders Meeting appointed Giancarlo Cerutti (a Knight of the Order of Labour Merit) to the position of Chairman of the Board of Directors and stated a preference for Claudio Calabi be appointed as Chief Executive Officer. In accordance with Article 29 of the Articles of Association, the Chairman of the Board of Directors, the Deputy Chairman, and the Chief Executive Officer shall have signatory powers of Company representation. The other members of the board shall represent the company within the limits of the powers granted them by the board. As of the date of this Report, the Company has not appointed an Executive Committee. 2. COMMITTEES 2.1 Remunerations Committee (Article 7 of the Corporate Governance code) On 20 August 2007, the Board of Directors established a Remunerations Committee having the following functions: - presenting the Board of Directors with recommendations for the remuneration of the Chief Executive Officer and other members of the board with special responsibilities, so as to ensure alignment with the objective of creating value for shareholders over the medium and long term, while also monitoring the application of the decisions made by the board; - periodically assessing the criteria followed in remunerating executives with responsibilities of strategic importance, overseeing their application based on the information provided by the Chief Executive Officer, and providing the Board of Directors with general recommendations in that regard, with particular emphasis on the adoption of any stock-option plans; - monitoring the application of the decisions made by the various competent bodies, as well as corporate policy with regard to the remuneration of senior management; - preparing, submitting to the Board of Directors, and monitoring the application of incentive systems (including stock-option plans) to senior management, i.e. the tools designed to attract and motivate high-level employees with the appropriate 8
experience, thereby developing a sense of belonging and ensuring a constant focus on the creation of value over time. The Remunerations Committee is comprised of the Non-Executive Director Diana Bracco and of the two independent directors Francesco Profumo and Marco Salomoni. The majority of the members of the committee are therefore independent directors as defined by the Corporate Governance code. 2.2 Internal Control Committee (Article 8 of the Corporate Governance code) On 20 August 2007, the Board of Directors approved the creation of an Internal Control Committee. The role of the Internal Control Committee is to assist the Board of Directors by providing recommendations and advice such that the leading risks concerning the Company and its subsidiaries are properly identified, measured, managed, and monitored. In that regard, the Internal Control Committee has been assigned the following duties in particular: - to assist the Board of Directors in its duties concerning internal controls as defined by the Corporate Governance code; - to assess, together with the officer in charge of preparation of the company s financial reports and the external auditors, the proper adoption of accounting standards and their consistent application for the purpose of preparing the consolidated financial statements; - to express opinions, upon request of the Chief Executive Officer, on specific issues concerning the identification of the Company s leading risks, as well as the design, implementation, and management of the system of internal controls; - to examine the plan prepared by the internal control officer, as well as the periodic reports prepared by said officer, as well as the activities of the officer in charge of preparation of the company s financial reports; - to oversee the efficacy of the account auditing process; - to perform further duties assigned to it by the Board of Directors, particularly as concerns the aspects intended to ensure the transparency and appropriateness of transactions with related parties; - to report to the Board of Directors, at least in conjunction with the approval of the annual financial statements and at the end of each quarter, on the activities performed and on the appropriateness of the system of internal controls. The Internal Control Committee is comprised of the director Matteo Colaninno and the two independent directors Francesco Profumo and Marco Salomoni. The majority of the members of the Internal Control Committee are therefore independent directors as defined by the Corporate Governance code. Mr Salomoni has sufficient experience in accounting and finance. 9
2.3 Appointments Committee (Article 6 of the Corporate Governance code) Members of the board are to be appointed in accordance with the procedures defined under Article 22 of the Articles of Association (and as summarised under section 1.2 above), which calls for directors to be appointed based on lists presented by shareholders in observance of the provisions of Article 147-ter(1) of the TUF. The Corporate Governance code has defined the optional nature of the Appointments Committee and specifies its functions. Given the adoption of the vote-by-lists mechanism, the Company has decided not to establish such a committee. 3. HANDLING OF CORPORATE INFORMATION AND THE CODE OF CONDUCT IN INTERNAL DEALING 3.1 The handling of corporate information (Article 4 of the Corporate Governance code) The Corporate Governance code states that directors and statutory auditors are required to maintain the confidentiality of documents and information acquired in the performance of their duties, as well as to observe the procedures adopted by the Company for internal management and for the disclosure of such documents and information. To that end, on 20 August 2007, the Company established internal procedures for the secure, confidential management of restricted information. Such procedures are also intended to prevent such information from being disclosed selectively (i.e. first to specific parties, such as shareholders, journalists, or analysts), not in a timely manner, incompletely, or otherwise inadequately. These procedures also govern the methods of establishing and maintaining a register of people who have access to privileged information in accordance with Article 115-bis of the TUF. 3.2 Disclosure requirements concerning internal dealing In observance of the provisions of Article 11(7) of the TUF, as well as the enacting provisions of Articles 152-sexies et seq. of the rules approved by CONSOB by means of resolution no. 11971 of 14 May 1999 as amended, the Board of Directors has acknowledged the disclosure obligations and required conduct related to transactions with relevant parties and by other parties closely associated with said relevant parties involving shares in the Company or other related financial instruments (i.e. insider dealing ). In particular, the Board of Directors has deemed it appropriate to establish an obligation for such relevant parties (other than shareholders who hold an interest of 10% or more in the Company) to abstain from transactions subject to regulations concerning internal dealing during certain periods of the year that are particularly sensitive in terms of corporate information. 10
4. DIRECTORS INTERESTS AND TRANSACTIONS WITH RELATED PARTIES (Article 9 of the Corporate Governance code) With regard to transactions with related parties, on 20 August 2007, the Board of Directors approved rules establishing the guidelines and criteria to be followed in identifying significant transactions with related parties, as well as specific principles of conduct, so as to govern the most substantial aspects and procedures related to the management of such transactions. Management of transactions with related parties is done in compliance with particular principles related to both content and procedures. The concept of related parties is defined by International Accounting Standards (IAS 24 Related Party Disclosures). Based on the rules for transactions with related parties, the Internal Control Committee is required to conduct a prior analysis of the various types of transactions with related parties, with the exception of those that present limited risk to the Company and to the Group (including transactions with wholly-owned subsidiaries, typical or routine transactions, transactions settled at standard conditions, and transactions for which the payment is established based on official market prices). Following said analysis by the Internal Control Committee, the Board of Directors shall then approve (in the case of transactions that are the responsibility of the Company) or evaluate (in the case of transactions that are the responsibility of other companies of the Group) the most significant transactions with related parties, i.e.: (i) atypical or unusual transactions; (ii) transactions of an amount in excess of 10 million (with the exception of those specified above that are of limited risk to the Company or to the Group); (iii) any other transactions that the Internal Control Committee deems appropriate to submit for analysis by the board. Transactions of an amount less than or equal to 10 million that are related to a director, statutory auditor, or senior manager in a position of strategic importance within the Company or Group (or with a related party by way of said parties) are always to be submitted for prior analysis by the Internal Control Committee. For each of the transactions with related parties submitted for prior approval or evaluation, the Board of Directors is to receive sufficient information concerning all significant aspects, and the related resolutions are to appropriately justify the reasoning behind the transactions and why they are of interest to the Company and the Group. The Board of Directors must also receive detailed information concerning the actual execution of the transactions it has approved or evaluated. In the event the nature, value, or other characteristics of the transaction should require it, in order to prevent the transaction from taking place at conditions significantly different from those that would be applied for unrelated parties, the Board of Directors or the Internal Control Committee may require that the transaction take place with the assistance of one or more independent experts of recognised skill and professionalism. In the event the relationship is with a director or other related party by way of a director, the director concerned must inform the Board of Directors in a timely manner as to the nature, terms, origin, and extent of the interest, and must not take part in the meeting of the board when it comes time to pass the related resolution, unless leaving the meeting would compromise the required quorum or the Board of Directors otherwise allows the director to stay. In the event the relationship is with the Chief Executive Officer or with another related party by way of the Chief Executive Officer, in addition to the above, the Chief Executive Officer is to abstain from conducting the transaction and to assign 11
the transaction to the Board of Directors. In the event the relationship is with one of the Standing Statutory Auditors or with a related party by way of a Standing Statutory Auditor, the Standing Statutory Auditor concerned is to inform the Board of Statutory Auditors and the Chairman of the Board of Directors in a timely manner as to the nature, terms, origin, and extent of the interest. Finally, a system of communication and verification is in place in order to identify, in a timely manner right from the initial negotiation stage, transactions with related parties involving Directors and Standing Statutory Auditors, as well as with senior managers in positions of strategic importance to the Company and the Group. 5. STATUTORY AUDITORS (Article 10 of the Corporate Governance code) In accordance with Article 33 of the Articles of Association, the Board of Statutory Auditors is to be comprised of three standing statutory auditors and two substitute statutory auditors. The Board of Statutory Auditors exercises control over company administration and all functions specified by law and by the Articles of Association. The term in office is as defined by law, and statutory auditors may be re-elected. Statutory auditors must meet the requirements of reliability, independence, and professionalism as defined by prevailing laws and regulations. In addition to the cases of ineligibility defined by law, statutory auditors may not be elected, and if elected are to be removed from office, if they hold positions on boards of directors or of statutory auditors in a number equal to or greater than the limits established by applicable laws and regulations. For the purpose of verifying the qualifications of the members of the boards of statutory auditors of publicly-listed companies, fields strictly related to the activities conducted by the Company include civil law, business law, financial management, statistics, and similar fields. The industries strictly related to those in which the Company operates include manufacturing, the publishing trade, and industries related to communications in general. In accordance with the provisions of Article 148(2) of the TUF, statutory auditors are to be appointed based on lists comprised of two sections: one for the candidates to the position of standing auditor and another for the candidates to the position of alternate auditor. The lists may be presented by shareholders representing at least one-fiftieth of capital with voting rights in ordinary shareholders meetings or the lower proportion of capital required by applicable laws and regulations to such end. For the purpose of demonstrating ownership of the number of shares required in order to present these lists, shareholders must provide the company, at its registered offices, with all documentation necessary to justify participation in the meetings of shareholders. The lists, which are to be signed by the shareholder(s) presenting them, are to be filed with the company at least fifteen days prior to the date set for the meeting and are to be made public in accordance with applicable law. The lists must include the following: - information concerning the identity of the shareholder(s) presenting the lists, along with an indication of the total share held and a certification demonstrating ownership of such share; - a declaration from the shareholders other than those who hold, individually or jointly, a controlling or relative majority interest testifying to the absence of connections as defined by applicable laws and regulations; 12
- a full description of the personal and professional qualifications of the candidates, as well as a declaration of such candidates as to their possession of the qualifications required by applicable law and these Articles of Association and of their acceptance of said candidacy, complete with a list of other positions held on the administrative or auditing bodies of other companies. Lists presented in violation of the aforementioned provisions shall be considered null and void. Shareholders may not present and vote for more than one list, including through a trust or other intermediary. Shareholders belonging to the same group or joined by a shareholder agreement concerning shares in the company may not present and vote for more than one list, including through a trust or other intermediary. Candidates may not appear on more than one list, and acceptance of candidacy on more than one list shall be cause for the ineligibility of the candidate concerned. In the event that, as of the deadline for presenting lists, only one list has been presented, or only lists that have been presented by shareholders who are connected to each other as defined by applicable laws and regulations, additional lists may be presented for an additional five days from said deadline. In such cases, the thresholds for presenting lists are to be reduced by half. Statutory auditors are then to be elected as follows: two standing auditors and one substitute are to be selected, based on the sequential order in which the candidates have been listed, from the list that obtains the greatest number of votes. The other standing auditor, who shall be appointed Chairman of the Board of Statutory Auditors, and one other substitute are to be selected, based on the sequential order in which the candidates have been listed, from the list that obtains the second highest number of votes. Any candidate appearing on a list presented by shareholders connected, as defined by applicable laws and regulations, to the shareholders that presented the list that obtained the greatest number of votes shall not be eligible, and if elected, shall be removed from office. If a shareholder connected with the shareholders who presented or voted for the list that obtained the greatest number of votes should vote in favor of a minority list, the existence of such connection shall be deemed relevant if such vote was a determinant factor in electing the statutory auditor. The current members of the Board of Statutory Auditors were appointed by the shareholders on 26 April 2007 and are to remain in office until approval of the financial statements for the year ending 31 December 2009. The members of the board of statutory auditors are listed in the table below: First & last name Position Piergiorgio Re Demetrio Minuto Alberto Usuelli Maria Silvani Luigi Viarengo Chairman Standing Statutory Auditor Standing Statutory Auditor Substitute Statutory Auditor Substitute Statutory Auditor 13
In 2006, the board met on five occasions. In 2007, five meetings of the board had been held as of August. To these, we may also add a number of meetings held, in particular, with the Company s management and with representatives of the independent auditing firm. Based on the information provided by the various parties concerned or otherwise available to the Company, all members of the Board of Statutory Auditors may be classified as independent as defined by the Corporate Governance code. 6. SHAREHOLDERS MEETINGS (Article 11 of the Corporate Governance code) In accordance with Article 11.C.5 of the Corporate Governance code, the Ordinary Shareholders Meeting of 30 July 2007, approved the rules for Shareholders Meetings intended to ensure the orderly, functional execution of such meetings by detailing the procedures of the various phases involved, as well as to ensure respect of the fundamental right of each shareholder to request clarification on the various issues being discussed, to express an opinion, and to make suggestions. 7. RELATIONS WITH SHAREHOLDERS (Article 11 of the Corporate Governance code) The Company takes steps to maintain an ongoing relationship with the shareholders and with other investors based on a mutual understanding of the various roles, while periodically promoting meetings with members of the Italian and international financial community in full compliance with prevailing laws and regulations concerning the handling of privileged information. The Company has also appointed an Investor Relations Officer and created a related section on its website (www.ilsole24ore.com). In this section of the website, investors may access all related documents published by the Company both of an accounting nature and in relation to the system of corporate governance. * * *** * * The Chairman of the Board of Directors (Giancarlo Cerutti) 14