Succession plans

Following its establishment in April 2011, the Appointments and Successions Committee has examined the business processes related to the identification, management and development of a reservoir of talent, guaranteeing the Group, over time, ongoing internal growth and generational change.

The Committee also examined the main initiatives for developing management skills and the process for preparing the "Succession tables".

The Committee has been able to verify the structure and implementation status of the systems which allow Pirelli (i) to monitor the key resources and to verify the existence of any persons in-house who are capable of assuming roles of greater responsibility or (ii) to define the qualifications required to fill these roles in the event of recruiting from outside the Company in the case of "emergency” changes”.

A structured succession plan for top management was then developed, with the help of a specialist international consulting firm, to be activated in case of emergency, defining the roles and responsibilities of the different agents involved in the process. It also defined the way forward in defining the plan of natural succession for top management.

With reference to the succession of top management in an emergency, and with specific regard to the role of CEO, the Plan, approved by the Board of Directors, provides that, in case of impossibility, the Board of Directors defines powers and may delegate its authority to ensure ordinary and extraordinary management during the transitional period. In particular, it is anticipated that the Board of Directors: (i) appoints an internal management committee, composed of three members of the Board with consolidated management and entrepreneurial experience; this committee will, on the one hand, play a proactive management role in any extraordinary transactions that cannot be postponed and, secondly, to ensure the ongoing management and operational decisions that are the normal responsibility of the CEO; (ii) nominate from within senior management a "spokesperson" to cover the necessary role of liaising between the new management committee and corporate structures and for external and internal communication (iii) consider whether to define for operational management a temporary widening of powers for ordinary activities, within the limits of the approved budget. The new Management Committee, with the help of the Appointments and Successions Committee, will assess applications (internal and external) and submit to the Board a short-list for the final choice. The Board of Directors, at the end of the process, co-opts the chosen person and grants them management powers.

The Plan also provides a series of preparatory activities aimed at the natural succession of the CEO, and useful also in the event of an emergency succession: (i) defining any extension of the relative powers of the Chairman and of the CEO; (ii) matching any existing key executives with the competence models for senior management; (iii) constantly observing the market.  

7 The information included in this section is also provided in compliance with the Consob recommendations contained in Communication DEM/11012984 dated 24 February 2011.