Composition

Article 13 of Snam’s Bylaws describes a list voting mechanism for the appointment of the board of directors which applies only for replacing the entire board. Lists of candidates and the results of voting are published in the minutes of each Shareholders’ meeting.

The Board of Directors confirmed  in February2019 that:

• except for the Chief Executive Officer (CEO), the directors hold a non-executive role
• the number of important positions held by the directors pursuant to the Italian stock exchange’s code of corporate governance and the relevant recommendations issued by the board is compatible with the effective performance of the role of director at Snam

Snam has not appointed a lead independent director due to the absence of the prerequisites set forth in the Code of Corporate Governance and because the Chairman neither holds the office of CEO nor holds a controlling stake in the company.

Snam does not provide for succession plans for executive directors due to the nature of the shareholder structure.

However, Snam has defined a succession planning process mfor its management.

Directors may be appointed for a period no longer than three financial years and their term expires on the date of the Shareholders’ Meeting to approve the financial statements for the last year of their term of office. Directors may be re-elected.

If, during the financial year, the office of one or more directors is vacated, legal provisions apply. If the majority of directors vacate their offices, the entire board shall be understood to have resigned and a Shareholders’ Meeting must be called without delay.

Succession planning aims to: (i) encourage generational replacement in companies; (ii) improve the management of the cessation from office of executive directors and of the top management; and (iii) mitigate the negative effects of any management discontinuity.

Snam is very careful to define the evaluation process on which the selection of candidates must be based. The candidates must be active, proactive and driven in helping to shape the future of the Group - these are characteristics shared by those who decide to commit to Snam. Snam’s success is also due to the special attention paid to the selection of the key functions of the top offices.

For this purpose the Succession Planning of Snam considers the key management personnel.

In view of the nature of the shareholders, Snam does not provide for any specific succession planning for executive directors. On March 13, 2018, the Board of Directors, upon proposal of the Appointments Committee, approved a "Contingency Plan", in the event of early termination of the Chief Executive Officer or of permanent impediment to the performance of his duties.

For more information, see the Report on Corporate Governance and Ownership Structure, page 58.

Snam’s Board of Directors conducted its second self-assessment of the board and its committees in 2019, following  recommendations in the Italian stock exchange’s Code of Corporate Governance and international best practice.

In a competitive process, the board selected Spencer Stuart as external advisor for the assessment.

The Board of Directors examined and discussed the results of the self assessment presented by Spencer Stuart and confirmed its overall positive assessment. For more information read the Report on Corporate Governance and Ownership Structure, page 52.