Internal control system

Responsibility for the internal control system lies with the Board of Directors as a whole, which establishes policies and periodically verifies its adequacy and effective functioning.
The Company's internal control system - and of the Pirelli Group in general - is set up to guarantee that correct information is provided and adequate control of all Group activities is implemented, with a special focus on areas considered potentially at risk.
The internal control system is first of all a "management" tool, in that it is useful and necessary for the Board of Directors, Executive Directors and managers in general for correctly and effectively performing the tasks assigned them.
The internal control system permits monitoring of compliance with the rules and procedures governing performance of all the Company's business activities.
Pirelli's internal control system has been developed as a direct process aimed at pursuing the values of substantial and procedural fairness, transparency and accountability, ensuring: (i) efficiency, transparency and traceability of transactions and management activities in general; (ii) reliability of accounting and management data and financial information; (iii) compliance with laws and regulations; (iv) protection of the company's integrity, also in order to prevent fraud damaging the Company and the financial markets.

The key rules underlying the Company's internal control system are:

  • (i) separation of roles in performance of the principal activities involved in individual operative processes;
  • (ii) traceability and constant visibility of decisions;
  • (iii) management of decision-making processes on the basis of objective criteria.


In order to guarantee adequacy and effectiveness of operation of the Internal Control System, the Board relies on the Committee for Internal Control, Risks and Corporate Governance and on a Responsible Officer with an appropriate degree of independence and the means required to perform this function, assigned the typical functions of verifying the system's adequacy and efficiency and proposing corrective actions if problems are identified.

In its meeting of 21 April 2011, the Board of Directors identified in its Chairman and Managing Director, Marco Tronchetti Provera, the Director with responsibility for the Company's Internal Control System who, in line with the recommendations of the Self-Regulatory Code (1), is assigned the following tasks:

  • identifying the principal risks to which the company is exposed, taking into account the characteristics of the activities performed by the issuing company and its subsidiaries, and periodically submitting them to the Board of Directors for examination;
  • implementing the policies defined by the Board of Directors, planning, implementing and managing the Company's internal control system, and constantly verifying its overall adequacy, efficacy and efficiency;
  • adapting the system to the dynamics of operating conditions and the legislation and regulations;
  • proposing to the Board the appointment, revocation and remuneration of one or more internal control officers.

(1)Also to implement the recommendations of the Self-Regulatory Code: Criterion of application 8.C.1., lett. b).
 

Last Revised: 01 Jul 2012