Succession planning

The Group policies for the selection, appointment, succession and assessment of the adequacy of company representatives and key function holders, approved by the Board of Directors, govern, among other thing, succession planning for executive Directors (including the Chief Executive Officer and Group General Manager) non-executive Directors, Statutory Audit Committee members and Key Function Holders; it sets out the specific suitability requirements, and defines the emergency plan for succession at management level in the event of a sudden need emerging requiring replacements to be made. Under the regulations in force, plans must be formalized to ensure orderly succession for the senior positions of the executive in the event of its term of office ending or for any other reason, to ensure business continuity and to avoid financial and reputational repercussions.

The definition of company representatives includes the members of the Board of Directors and the Statutory Audit Committee; while the Key Function Holders are individuals who are not members of the Board but who have a significant influence of the management of the Bank and/or of the Group.

Chief Executive Officer and Group General Manager: the Appointments Committee (chaired by the Lead Independent Directors) is responsible for selecting a limited number of candidates, chosen also from among the members of the Group’s management, considered to be able to succeed to the positions of CEO and Group General Manager. In general terms an executive director must possess all the requirements for directors, plus also specific experience in banking, professional or corporate institutions which demonstrates the ability to take decisions promptly and on an informed basis.

This selection is performed with the support of the Chief Executive Officer and the Group General Manager currently in office, and with Group HR for candidates who are members of the Group’s management, and also with a specialist advisor if appropriate. This shortlist of candidates is updated continuously over time to ensure that, if need be, the Appointments Committee is able to make proposals to the Board of Directors or to shareholders in Annual General Meeting in a timely manner. In an emergency, the Chairman promptly calls meetings of the Board of Directors and Appointments Committee to assign powers on an interim basis, to guarantee business continuity, and to launch the ordinary succession procedures.

Key Function Holders: the competences required for such roles are defined and formalized on the basis of the respective roles covered. Candidates must possess the requisite personal qualifications, mutatis mutandis, and meet the requirements for fit and proper persons, proper conduct and competence to hold the office of Director. The Chief Executive Officer and Group General Manager, with the support of Group HR, identify internal staff members who are able to ensure succession in the short and medium term.

The process requires a pool of possible high-potential replacements to be identified (the “senior talent pool”) for key positions while not neglecting to monitor the market on an ongoing basis. Career growth and development pathways are devised for such staff, including involvement in specific strategic projects, exposure to Board/committee meetings, and international and intra-Group rotation. As at the recruitment stage, selection is based on assessment of professional and technical skills, as shown by CV and company record, as well as performance over time, possession and development of key leadership capabilities.

Particular importance is given in drawing up and updating the succession plans and in benchmarking activities to the application of equal gender principles in the selection of candidates, guaranteeing that all those with the same qualifications have equal access to roles of responsibility, with the aim of ensuring that any existing gaps in this respect are reduced appropriately.

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