Governance,Commitments and Stakeholder Involvement

Saipem is committed to maintaining and reinforcing a system of Governance that is in line with the standards of best international practices and is suited to the complexity of the Company’s make-up.

Below is given a brief description of the Company’s governance structure. Further details are available in the document ‘Corporate Governance Report and Shareholding Structure 2011’, which is available in the Governance section of the Company web site.

Ref. GRI  Governance 
4.1-4.2-4.3  Saipem’s organizational structure is characterized by the presence of a Board of Directors, a pivotal body in the governance system, to which management of the Company is exclusively entrusted. Supervisory functions are the responsibility of the Board of Statutory Auditors whereas the External Auditors are in charge of the legal auditing of accounts. The Shareholders’ Meeting manifests the will of and binds the Shareholders, through resolutions adopted in compliance with the law and the Company’s Articles of Association. The Board of Directors is made up of 9 members, of whom 7 non-executive, 5 independent non-executive and 2 executive. The Board was appointed by the Shareholders’ Meeting of May 4, 2011. In turn, the Board of Directors appointed the Chairman, the Deputy Chairman - CEO (Chief Executive Officer) (to whom the Chief Operating Officers (COO) in charge of the various Business Units report), and a Managing Director for Business Support and Transversal Activities (Deputy CEO).Together with those Directors holding powers of attorney (see Article 26 of the Articles of Association), the Chairman, who has no executive role, represents the Company pursuant to Article 21 of the Articles of Association. Two committees with advisory and consulting functions have been set up within the Board of Directors. These are the Audit Committee (now the Audit and Risk Committee) consisting of independent non-executive members, and the Compensation Committee (now the Compensation and Nomination Committee), made up of non-executive Directors, the majority of whom are independent. In addition to the exclusive powers granted to it by Article 2381 of the Italian Civil Code, the Board of Directors is responsible for defining the strategic guidelines and targets of both the Company and the Group, including their Sustainability policies.
[Ref. CGR 2011 - ‘Organizational Structure’; ‘Management and Control Bodies and their Committees’; ‘Responsibilities and Powers of the Board of Directors’; ‘Composition’; ‘Cumulation of Offices’; ‘Independent Directors’; ‘Committees within the Board of Directors’]
4.4  Saipem employees have numerous dedicated channels of communication at their disposal. These include:
  • the intranet portal, to which all employees have free access. This provides constant information on such themes as business, training and industrial relations, as well as technical sections for the sharing of documents, procedures and best practices;
  • the quarterly in-house magazine ‘Orizzonti’, which has a circulation of 15,000 and is also available online. The publication contains articles on significant operational issues and projects;
  • a large number of newsletters and magazines run by the operating companies and focusing on themes of interest in local areas.
Furthermore, information and dialogue channels provided for under agreements with the trade unions are ensured within the industrial relations system so that all employees receive timely information, are consulted and can participate.
Saipem provides employees and stakeholders with an information channel – overseen by the Compliance Committee in a way that ensures confidentiality and prevents any form of retaliation – through which it is possible to report any problems related to the internal control system, financial reporting, corporate administrative liability, fraud or other topics (i.e. violations of the Code of Ethics, mobbing, theft, security, etc.).
Communications with shareholders are ensured by the manager of the Secretary’s Office and any information that is of interest to them is made available on the Saipem web site or can be requested via email at segreteria.societaria@saipem.com. To protect minority interests, one statutory auditor and one alternate statutory auditor from the Board of Statutory Auditors are chosen from among the candidates put forward by minority shareholders. The Chairman of the Board of Statutory Auditors is appointed from among the auditors elected by the minority. More generally, information is guaranteed by means of ample documentation made available to investors, the market and the press on the Saipem web site. It is further ensured by means of press releases, periodical meetings with institutional investors, the financial community and the press.
[Ref. CGR 2011 - ‘Board of Statutory Auditors’; web site www.saipem.com- Investor Relations]
4.5  The remuneration of the Deputy Chairman - CEO, and the Managing Director for Business Support and Transversal Activities - Deputy CEO, as well as that of senior managers with strategic responsibilities, comprises a fixed component and an annual variable component. The latter is set with reference to Saipem’s yearly objectives in terms of new contracts, investments and backlog, adjusted EBITDAi and sustainability (further broken down in 2011 into an injury frequency rate, a zero accidents policy and audits on vendors carried out within in the framework of compliance with standard SA8000).
[Ref. CGR 2011 - ‘Remuneration Report’]
4.6  The Saipem procedure ‘Operations Involving Interests of Directors and Auditors and Operations with Related Parties’ (available at www.saipem.com in the ‘Corporate Governance’ section), which aims to ensure transparency as well as substantive and procedural correctness in transactions with other parties, was approved by the Board of Directors in 2010 and became effective as of January 1, 2011.
[Ref. CGR 2011 - ‘Operations Involving Interests of Directors and Auditors and Operations with Related Parties’]
4.7  Directors shall meet the honourability requirements prescribed by regulations, possess the professional expertise and experience to carry out their mandate efficiently and effectively and be able to dedicate sufficient time and resources to their offices. In compliance with the Corporate Governance Code, once again this year the Board of Directors carried out a Board Review on the size, composition and level of functioning and efficiency of the Board and its Committees. To this end, it availed of the assistance of a specialist external consultant. The analysis showed that there are specific areas of excellence, such as, among others, the increased knowledge, on part of the Directors, of the Company’s operations, gained from presentations given by the heads of BUs at Board meetings and visits to operational sites, as well as the special attention paid to the themes of ‘health and safety’ and ‘risk analysis’.
[Ref. CGR 2011 - ‘Board of Directors’; ‘Board Review’; ‘Composition’]
4.8  Clear recognition of the Company’s values and responsibilities is a foundational element of Saipem’s relations with its stakeholders. The following principles, further underscored in the Company’s Mission statement, are applied universally throughout Group operations. Compliance with the law, regulations, statutory provisions, self-regulatory codes, ethical integrity and fairness, is a constant commitment and duty of all Saipem people when carrying out their duties and responsibilities. Alongside a commitment to transparency, energy efficiency and sustainable development, these principles characterize the conduct of the entire organization. In compliance with the provisions of law, the Code of Ethics clearly defines the values that Saipem recognizes, accepts and shares, as well as the responsibilities the Company assumes both internally and externally. The ‘Team for Promoting the Code of Ethics’ is a specific body appointed to promote knowledge of Saipem’s Code of Ethics and to facilitate its implementation. Saipem applies the OECD (Organization for Economic Co-operation and Development) Guidelines for Multinational Enterprises. The Company further observes the universally recognized core labour standards contained in the Fundamental Conventions of ILO (International Labour Organization), repudiates any form of forced or juvenile labour and/or discrimination and ensures ever-improving health and safety standards for its employees and the communities in which it works. Saipem’s business conduct is inspired by the respect it affords to each and every difference encountered in the communities where it operates. The Company is further committed to preserving the biological, environmental, social, cultural and economic identities of these communities and to promoting their quality of life as well as their social and economic development. In order to guarantee the achievement of business objectives, the Board of Directors has so far approved the following Policy documents: ‘Our People’; ‘Our Partners in the value chain’; ‘Global Compliance’; ‘Corporate Governance’; ‘Operational Excellence’; ‘Our Institutional Partners’; ‘Information Management’. As shown in this document, the results of the Company and its subsidiaries in the social, environmental and economic spheres testifies to the degree to which the aforementioned principles have been implemented. Further details of their application in specific operational contests are supplied in the document ‘Saipem Sustainability 2011’. 
[Ref. CGR 2011 - ‘Issuer Profile’; ‘Saipem Sustainability 2011’]
4.9  The Board of Directors verifies the achievement of targets during the four-monthly Business Reviews and, on a yearly basis, approves the Strategic Plan which, alongside specifically economic and financial themes, includes objectives related to the social and environmental aspects of the business.
The main risks referable to the HSE area are identified, monitored and managed by Saipem through an Integrated HSE Management System based on a yearly planning, implementation and control plan, a review of results and the setting of new targets. The performance is presented and discussed at each meeting of the Board of Directors, which subsequently issues operative instructions. Furthermore, as part of the implementation of the policy of maximizing local content, and with regard to the management of the Company’s personnel, the Board of Directors is likewise informed, when needed, of the Company’s social performance. The Chairman, the Deputy Chairman - CEO and the Managing Director - Deputy CEO, are informed on a monthly basis of social performance.
Every four months, the Sustainability Committee, of which the Deputy Chairman-CEO and the Managing Director-Deputy CEO are members, is presented with the main performance results and activities underway as regards relations with the local communities. The Committee then supplies guidelines and approves the activity plan and is also informed about, and provisionally approves, the external report on the year’s sustainability performance, which is subsequently approved formally by the Board of Directors concurrently with the Annual Report.
[Ref. AR 2011 - ‘Risk Management’, ‘Sustainability’; CGR 2011 - ‘Risk and Internal Control Management System in Relation to the Financial Reporting Process’]
4.10  In accordance with the best international practices and in compliance with the Stock Exchange Code, the Board of Directors of Saipem annually conducts a Board Review on the size, composition and functioning of the Board of Directors and its committees and may provide advice on professionals whose presence on the Board it deems to be appropriate.
[Ref. CGR 2011 - ‘Board Review’]
Ref. GRI  Commitment in external initiatives
4.11  Saipem identifies, monitors and actively manages project related risk mainly in relation to engineering and construction contracts, both in bid and executive phases, and projects involving company assets. The Risk and Opportunity and Knowledge Management department (ROKM) ensures periodical reporting to management on the main ‘project risks’ and trends observed, aggregated both by Business Unit and globally. It also provides support in the implementation of mitigation and improvement measures for the management of risk areas and the optimization of any opportunities identified. ROKM further promotes observance of the Golden Rules & Silver Guidelines, a tool adopted by Saipem to regulate the taking on of risk and through which the Company assigns responsibility to the appropriate management levels in relation to decisions to be taken regarding the most significant assumptions thereof.
[Ref. AR 2011 - ‘Risk Management’]
4.12  Saipem operates in the reference framework of the Universal Declaration of Human Rights adopted by the United Nations, the Fundamental Conventions of the ILO (International Labour Organization) and the OECD Guidelines for Multinational Enterprises.
[Ref. Code of Ethics]
4.13  Saipem participates in numerous initiatives and associations that have as their main objective the sharing of best practices within their specific business sectors. The following are among the 32 associations to which Saipem belongs: ANIMP (Associazione Nazionale di Impiantistica Industriale - Italian Association of Industrial Plant engineering), CEI (Comitato Elettrotecnico Italiano - Italian Electrotechnical Committee), IADC (International Association of Drilling Contractors), IMCA (International Maritime Contractors Association), IPLOCA (International Pipelinei & Offshore Contractors Association), UNI (Ente Nazionale Italiano di Unificazione - Italian Organization for Standardization), SGI (Società Geologica Italiana - Italian Geological Society). Some operating companies are members of the ‘Ship Owners and Marine Industry Ventures Association’ and of BIP (Brazilian Institute of Petroleum and Gas). In total, the Saipem Group takes part in 42 associations.

Stakeholder relations

Stakeholder  Main stakeholder involvement initiatives in 2011
Financial stakeholders  
Financial analysts and rating agencies
Periodical reporting of results and illustration of objectives and outcomes. Updating of the web document ‘Key of interpretation of Saipem website and published documents’. Drafting of disclosure as requested by VIGEO, the Financière Responsable and EIRIS.
Shareholders
Road Show, communications with the Secretariat function, conferences for international investors, updating of the dedicated web section.
Clients
Participation, in the capacity of speaker, at the London Conference of September 2011 on ‘Local Content’, with the attendance of Clients such as ExxonMobil, Chevron, Petrobras, Shell, etc.
In Congo, presentation on sustainability issues for the Client Total Congo (June 2011), meeting with Eni Congo and Total Congo (December 2011). In Nigeria, presentation by the CEO of Saipem to the President of Nigeria on sustainability and Local Content.
In Kazakhstan, meeting with Agip KCO and with DAEWOO (July 2011).
In Indonesia, grand opening of the new Karimun Yard with the participation of the entire Saipem Board and 33 Clients and potential partners.Constant reporting on operating projects: Project Managers and project staff hold interviews and meetings and reply to the requests of the Client, often present on-site in day-to-day operations.
At the end of each significant project, and on an annual basis, the Client is asked for feedback using the Customer Satisfaction tool. Disclosure in the pre-qualification and bid phases for new contracts.
Local authorities and institutions
Agreements and cooperation with Italian universities on a Master’s course on HSE topics. Ongoing cooperation with Algerian universities on HSE Master’s programmes. Cooperation with local authorities and universities to maximize the employment and training of local personnel.
Employees
and trade unions
 
Employees Training on sustainability in Saipem’s business by means of two sessions for new employees and five sessions within the HSE management training programme. Workshop organized in Paris on sustainability and results of the SELCE model analysis. Two workshops for the internal network of sustainability Facilitators for operating companies in West Africa, Indonesia, China and Algeria.
Trade unions
Collective bargaining and communications with trade unions on specific local actions and meetings with workers’ representatives.
Subcontractors and vendors Involvement of local vendors (36 Nigerian, 23 Algerian, 23 Kazakh, 24 Indonesian) in the quali-quantitative survey for application of the SELCE model. Audit of 17 Chinese and Indian vendors on workers’ rights issues
Local Communities Various initiatives and development programmes held during the year for the host communities, often in association with local organizations and representatives, as illustrated in the document ‘Saipem Sustainability 2011’. Activities in association with local schools and universities (Algeria, Azerbaijan, Nigeria, Indonesia, Peru, Venezuela).