System of internal control

The Board of Directors has the responsibility of the internal control and risks management system, which sets out the guidelines and regularly reviews the adequacy and the effective functioning of the Board.

The internal control system of the Company - and of the Pirelli Group in general - is structured to ensure a correct disclosure and adequate coverage of control over all Group activities, with particular attention to areas considered potentially at risk.

The internal control system is, in the first place, a "management" tool as it is useful and necessary for the Board of Directors, for the Executives Directors and managers in general to properly and effectively carry out the tasks assigned.

The internal control system can, in fact, monitor the compliance of the rules and procedures governing the conduct of business in its multiple joints.

Pirelli internal control system has developed as a process to pursue the material and procedural fairness, transparency and accountability values, ensuring that: (i) the efficiency, consistency and verifiability of operations and, more generally, the related activities management, (ii) reliability of accounting and management data and financial information, (iii) compliance with laws and regulations, and (iv) safeguarding corporate integrity, also in order to prevent fraud against the Company and of financial markets.

The core rules of the Company's internal control system are:

  • the separation of roles in the main activities related to individual operating processes;
  • tracking and constant visibility of choices;
  • the management of the decision-making processes based on objective criteria;

      1. The Board of Directors, at the meeting held on 3 August 2023, identified in the CEO Andrea Casaluci the subject in charge of the establishment and the manteinance of the Internal Control and Risks management System of the Company and, in line with the recommendations of the Corporate Governance Code, has been granted with the following tasks:

        • to identify the main business risks, taking into account the characteristics of the activities carried out by the issuer and its subsidiaries, and periodically submit them to the examination of Board of Directors;
        • to implement the guidelines defined by the Board of Directors, with due regard to the design, implementation and management of the internal control and risk management system, constantly verifying the overall adequacy, effectiveness and efficiency;
        • to take care of adapting this system to the dynamic of operating conditions and the legislative and regulatory landscape;
        • the possibility to request the internal audit function to carry out audits on specific operating areas and on compliance with internal rules and procedures in the implementation of company transactions; such requests are contextually conveyed to the Chairman of the board of directors, to the Chairman of the Audit, Risks, and Corporate Governance committee and to the Chairman of the Board of Statutory Auditors;
        • to promptly report to the Audit, Risks, and Corporate Governance Committee on issues and criticalities that emerged in the conduct of their performance or have had any news in order to enable the Committee to take the appropriate actions.

Last revised: 3 Aug 2023