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ORGANIZATION, MANAGEMENT, AND CONTROL MODEL
PURSUANT TO LEGISLATIVE DECREE 8 JUNE 2001, NO. 231
| Revision | Date | Approved by |
| 01 | 28 March 2018 | BoD |
| 02 | 28 April 2021 | BoD |
| 03 | 08 May 2023 | BoD |
- INTRODUCTION - SUBJECTIVE SCOPE OF APPLICATION OF THE MODEL OF FRETTE S.r.l.
Before proceeding with the description of the principles contained in this General Section, it is considered appropriate to specify the criteria on the basis of which the parties to which this Organization, management and control model (hereinafter, for brevity, also the “Model”) applies have been identified and classified, as adopted by FRETTE S.r.l. (hereinafter, for brevity, also referred to as the “Company” or “FRETTE”) pursuant to Legislative Decree 231/2001 (hereinafter, for brevity, also referred to as the “Decree” or “Decree 231”)
In particular, based on the sanctioning tools available to the Company, a distinction is made between:
- Recipients, as persons with respect to whom compliance with the Model is ensured through warnings and the possible exercise of the powers that characterize the employer-employee relationship or powers that are substantially similar to it;
- Other Recipients, who are required to comply with the Model at the time of their appointment; and
- Third parties, such as subjects linked to the Company by contractual relationships other than employment, within which specific clauses are signed to ensure compliance with the Model (e.g. consultants, suppliers, Business Partners, etc.).
That said, the following terms should be given the meaning indicated below:
Management Personnel: means the persons who hold positions of representation, administration or management of the Company or one of its organizational units with financial and functional autonomy, as well as the persons who exercise, even de facto, the management and control thereof.
Subordinates: indicates parties subject to the direction or supervision of the Management Personnel and who must execute, in a subordinate or non-subordinate position, the directives of the latter or who are subject to their supervision.
Recipients: indicates the Management Personnel over whom the Company may exercise a power of control of an employer nature or substantially similar to it, and Subordinates.
Other Recipients: indicates the Management Personnel over whom the Company cannot exercise a power of control of an employer nature or substantially similar to it and with respect to whom compliance with the Model is required at the time of their appointment (including directors, de facto directors, liquidators who may be appointed, the Board of Statutory Auditors or Sole Auditor and the auditing firm).
Third parties: jointly indicates all the physical and juridical persons who are neither Recipients nor Other Recipients to whom the observance of the Model is required through the imposition of contractual bonds for this purpose. By way of example and without limitation, this category includes:
- all those who have a work relationship with the Company other than employment (e.g. consultants, project workers, etc.);
- contractors and business partners;
- service providers;
- proxies, agents and all those who act in the name of and/or on behalf of the Company; <
- persons who are assigned, or who in any case carry out, specific functions and tasks relating to health and safety at work.
- THE REGULATORY FRAMEWORK OF REFERENCE: LEGISLATIVE DECREE NO. 231/2001
2.1 The introduction of the so-called administrative responsibility for crime
In execution of the mandate conferred by Parliament with Law no. 300 of 29 September 2000, on 8 June 2001 the Delegated Legislator issued Legislative Decree no. 231/2001, concerning the “Regulations governing the administrative liability of legal entities, companies and associations, including those without legal personality”.
The same delegated law no. 300 of 2000 authorized the ratification and ordered the execution of some International Conventions already signed by Italy: Brussels Convention of 26 July 1995, on the Protection of Financial Interests; Brussels Convention of 26 May 1997, on Combating Bribery of Public Officials of the European Community and Member States; OECD Convention of 17 December 1997, on Combating Bribery of Foreign Public Officials in International Business Transactions. The Italian legislator subsequently issued Law no. 146/2006, concerning the ratification and implementation of the Convention and the protocols of the United Nations against transnational organized crime adopted by the General Assembly on 15 November 2000 and 31 May 2001. These international and, in particular, EU instruments provide for paradigms of liability of legal persons and a system of sanctions aimed at striking at corporate crime.
Until the issuance of the Decree, it was normatively excluded that a company could appear as a “defendant” in a criminal trial.
With the introduction of the Decree, which took place in the context of the implementation of the aforementioned international instruments, the principle according to which “societas delinquere non potest” has been superseded and a system of liability has been introduced for entities (hereinafter, for brevity, also collectively referred to as the “Entities” and individually as the “Entity”) which is similar, in particular from the point of view of sanctions, to criminal liability alongside that of the natural person who has acted as the material perpetrator of the crime. In fact, the responsibility of the Entity, even if nominally administrative pursuant to the Decree, derives from a crime and can only be sanctioned through the guarantees of the criminal trial.
From the point of view of criminal policy, the introduction of liability for offences committed by Entities does not only respond to the need to comply with the obligations assumed at international and EU level but, from a broader viewpoint, derives from the need to deal more effectively with the criminal pathologies of entrepreneurial realities, whose structural complexity and opacity can make it difficult to ascertain individual liability.
The legislative choice is also based on the observation of unlawful conduct committed within the company. Often, in fact, these offences originate from the same organization and business policy in which they are embedded and are the result of top management decisions. Not only. It is precisely the improper use of corporate structures that can, in some cases, facilitate the commission of certain offences or lead to more serious consequences.
2.2. The objective prerequisites of administrative liability for crime
Art. 5 of the Decree identifies the objective criteria of imputation, providing for three conditions in the presence of which it is possible to attribute the crime committed by the natural person to the Entity:
- the subjects must be natural persons in a management or subordinate position;
- the crime must have been committed in the interest or to the advantage of the Entity;
- the subjects must not have acted solely in their own interest or that of third parties.
The first criterion requires that the crime be committed by a person linked to the Entity by a qualified relationship. The natural persons from whose criminal conduct the responsibility of the Entities derives are identified by art. 5, paragraph 1, of the Decree which - by virtue of the application of the theory of the so-called organic identification - states that the Entity is responsible for crimes committed in its interest or to its advantage:
- by persons who hold positions of representation, administration or management of the entity or of one of its organizational units with financial and functional autonomy, as well as by persons who exercise, also de facto, management and control;
- by persons subject to the direction or supervision of one of the persons referred to in letter a).
With reference to the persons referred to in letter a), for the purposes of administrative liability as a result of crime, it is not necessary for the management position to be held “formally”, but it is sufficient that the functions exercised, even “de facto”, are actually the expression of powers of management and control (to be exercised jointly, as pointed out by the Ministerial Report to the Decree, i.e. the person must exercise real dominion over the entity or one of its organizational units).
Moreover, pursuant to the Decree, the Entity’s liability also exists when the perpetrator of the crime has not been identified but it is nevertheless ascertained that he/she certainly falls within the category of the subjects set forth in points a) and b) of art. 5 of the Decree, or even in the event that the crime is extinguished with regard to the natural person perpetrator for a reason other than amnesty.
As regards the second criterion, i.e. the commission of the offence in the interest or to the advantage of the Entity, it should be noted that the “interest” of the Entity always presupposes an ex ante verification of the criminal conduct of the natural person, while the “advantage” that can be gained by the Entity even when the natural person has not acted in its interest, always requires an ex post verification. “Interest” and “advantage” each have a specific and autonomous relevance, as it may well happen that a conduct in the interest of the Entity may turn out a posteriori not to be advantageous at all (the normative presupposition of the commission of offences “in its interest or to its advantage” does not contain a hendiadys, because the terms refer to legally different concepts, being able to distinguish a prior interest as a result of undue enrichment, as a result of the offence, from an advantage objectively achieved by the commission of the offence, even if not envisaged ex ante, so that the interest and the advantage are in real concurrence: ex plurimis, Crim. Cass., Sect. II, 30 January 2006, no. 3615).
On the other hand, the organization is not liable if the above mentioned persons - whether in management position or not - have acted in their “exclusive” interest or in the interest of third parties. The responsibility of the Entity must also be excluded “if it nevertheless receives an advantage from the illicit conduct of the natural person, where it appears that the offender acted “in own exclusive interest or that of third parties” (...): in this case, in fact, it would be a “fortuitous” advantage, as such not attributable to the will of the Entity” (Crim. Cass., Sect. VI, 02 October 2006, no. 32627).
The reference is to all those situations in which, obviously, the crime committed by the natural person is not in any way ascribable to the Entity, since it was not carried out even partially in the interest of the latter (in such cases, the Judge is not required to verify whether or not the Entity benefited). On the contrary, in the hypothesis in which the perpetrator of the crime has committed the fact in own “prevailing” interest or that of third parties and the Entity has not obtained any advantage or has obtained a minimum advantage, there will be anyway the responsibility of the Entity, except for the extenuating circumstance with special effect provided by art. 12, paragraph 1, letter a) of the Decree (i.e., the pecuniary sanction is reduced by half and cannot, in any case, exceed Euro 103,291.00).
2.3. The subjective prerequisites of administrative liability for crime.
Articles 6 and 7 of the Decree identify the subjective criteria of imputation, providing for specific forms of exemption from the administrative responsibility of the Entity, since, for the purposes of the configurability of the administrative responsibility for crime, it is not sufficient to refer the crime to the Entity on an objective level, but it is necessary to be able to formulate a judgement of reprehensibility for the Entity itself.
In this sense, pursuant to art. 6, paragraph 1, of the Decree, in the event that the facts of the crime are charged to Management, the Entity shall not be held liable if it proves:
- to have adopted and implemented, prior to the commission of the crime, a Model suitable to prevent one of the crimes indicated in the Decree (hereinafter the “Predicate Offence”) of the kind that has occurred;
- to have appointed a body, independent and with autonomous powers, to supervise the functioning of and compliance with the Model and to update it (hereinafter, for brevity, also referred to as the “Supervisory Body” or even only as the “SB” or “Body”);
- the Offence has been committed by fraudulently evading the measures provided for in the Model;
- there has been no omitted or insufficient supervision on the part of the SB.
In the case of Subordinates, the adoption and effective implementation of the Model means that the Entity will be held liable in the event that the commission of the Predicate Offence has been made possible by the failure to comply with the obligations of management and supervision (combined provisions of paragraphs 1 and 2 of art. 7 of the Decree). Unlike as established for the crime committed by management, in this case, the burden is on the prosecution to prove the non-adoption and ineffective implementation of the models.
Lastly, it should be noted that, pursuant to art. 23 of the Decree, the Entity is also liable in the event of:
- non-compliance with disqualification sanctions, or if, having been applied, pursuant to the Decree, a disqualification sanction or precautionary measure, the entity violates the obligations or prohibitions inherent to them;
- crimes committed abroad by a person who is functionally linked to the entity, provided that the State of the place where the crime was committed does not take legal action for the same.
2.4. Predicate offences underlying the administrative liability of Entities
The administrative liability of the Entity, however, is not “linked” to the perpetration of any crime, but may possibly be configured only in relation to those criminal offences expressly referred to by the Decree and by Law no. 146/2006.
In fact, in order to configure a liability attributable to the Entity, only specific types of so-called Predicate Offences are identified as relevant, to the occurrence of which the direct liability of the Entity is connected.
The Predicate Offences for which the Entity is administratively liable fall into the categories indicated in the following table:
Art. 25 – octies 1: Crimes relating to non-cash means of payment;
Art. 25 – septiesdecies: Crimes against cultural heritage;
Art. 25 – duodevicies: Laundering of cultural assets and destruction and looting of cultural and landscape assets
Having clarified the above, it must be pointed out that pursuant to art. 26 of the Decree, the Entity is held liable for the crimes indicated above (with the exception of the cases set forth in art. 25 septies of the Decree) even if they have been committed in the form of an attempt. An attempt to commit an offence occurs in the case of the performance of suitable acts, unequivocally aimed at committing an offence if the action is not carried out or the event does not occur (art. 56 of the Italian Penal Code). In such cases, however, the pecuniary and disqualification sanctions are reduced by one-third to one-half.
2.5 The sanctions provided for by the Decree
In the event that the subjects set forth in art. 5 of the Decree commit one of the Predicate Offences, the Entity may be subject to the infliction of some highly penalizing sanctions.
Pursuant to art. 9 of the Decree, the types of sanctions (referred to as administrative sanctions) applicable are as follows:
- monetary sanctions (articles 10 - 12): these are always applied for every administrative offence and have an afflictive and non-compensatory nature. The Entity alone is liable for the obligation to pay the pecuniary penalty from its own assets or from the common fund. The sanctions are calculated on the basis of a system “by quotas in a number no less than one hundred and no more than one thousand”, the commensuration of which is determined by the judge on the basis of the seriousness of the fact and the degree of responsibility of the Entity, the activity carried out by the Entity to eliminate or mitigate the consequences of the illegal act and to prevent the commission of further illegal acts; each individual quota ranges from a minimum of Euro 258.23 to a maximum of Euro 1,549.37. The amount of each quota is determined by the Judge, taking into consideration the economic and patrimonial conditions of the entity; the amount of the pecuniary sanction, therefore, is determined by multiplying the first factor (number of quotas) by the second factor (quota amount);
- disqualification sanctions (articles 13 to 17): these are applied only in cases where they are expressly provided for and are as follows (art. 9, paragraph 2):
- disqualification from exercising the activity;
- suspension or revocation of authorizations, licences or concessions functional to the commission of the offence;
- prohibition of contracting with the Public Administration, except for the purpose of obtaining a public service; said prohibition may also be limited to certain types of contracts or to certain administrations;
- exclusion from benefits, financing, contributions or subsidies and the possible revocation of those granted;
- prohibition on advertising goods or services.
Disqualification sanctions have the characteristic of limiting or conditioning the company’s activity, and in the most serious cases they even paralyse the Entity (disqualification from exercising the activity); they also have the purpose of preventing conduct connected to the commission of crimes. In fact, art. 45 of the Decree provides for the application of the disqualification sanctions indicated in art. 9, paragraph 2, as a precautionary measure, when there are serious indications that the company is responsible for an administrative offence that depends on a crime and there are specific and well-founded elements that make it appear that there is a concrete danger that the same type of offence will be committed as the one in question.
These sanctions are applied in the cases expressly provided for by the Decree when at least one of the following conditions applies:
- the Entity has made a significant profit from the offence and the offence was committed by persons in a management position or by persons subject to the direction of others and, in this case, the commission of the offence was determined or facilitated by serious organizational deficiencies;
- in the event of repeated offences.
Disqualification sanctions have a duration of no less than three months and no more than two years; as an exception to the time limit, disqualification sanctions may be applied definitively in the most serious situations described in art. 16 of Decree 231. It is established that the duration of the sanctions will be reduced if the Entity, before the sentence of the first degree, has taken steps to avoid further consequences of the crime, has collaborated with the judicial authorities to ensure the evidence of the crime, to identify those responsible for it, to seize the sums or other benefits transferred and has - finally - eliminated the organizational deficiencies that had determined the crime, by adopting and implementing organizational models suitable for preventing new crimes of the same type as the one that has occurred;
- confiscation (art. 19): this is an autonomous and compulsory sanction that is applied with the sentence of conviction against the entity, and has as its object the price or the profit of the crime (except for the part that can be returned to the damaged party), or, if this is not possible, sums of money or other utilities with a value equivalent to the price or the profit of the crime; the rights acquired by the third party in good faith are not affected. The purpose is to prevent the Entity from exploiting unlawful conduct for the purpose of “profit”; with regard to the meaning of “profit”, considering the important impact that the confiscation can have on the assets of the Entity, the doctrine and jurisprudence have expressed different and oscillating orientations due to the novelty of the subject with reference to the “confiscation-sanction” provided for by the Decree. Art. 53 of the Decree provides for the possibility of ordering the preventive seizure for the purpose of confiscating the assets of the entity that constitute the price or the profit of the crime in the presence of the conditions of the law; the procedure provided for by articles 321 and following of the code of criminal procedure on the subject of preventive seizure is applied;
- publication of the sentence (art. 18): it can be ordered when a disqualification sanction is applied to the entity. Publication shall be at the expense of the entity, and shall be performed by the clerk of the court; the purpose shall be to bring the judgement of conviction to the attention of the public.
2.6 Precautionary measures
The Decree provides for the possibility of applying to the Entity the disqualification sanctions set forth in art. 9, paragraph 2, also as a precautionary measure.
Precautionary measures respond to the need for procedural precautions, since they can be applied during the course of proceedings and therefore to a subject who is under investigation or accused, but who has not yet been convicted. For this reason, precautionary measures may be ordered, at the request of the Public Prosecutor, in the presence of certain conditions.
Art. 45 indicates the prerequisites for the application of precautionary measures, conditioning their use on the existence of serious indications of guilt regarding the responsibility of the Entity, thus following the provision contained in art. 273, paragraph 1, Code of Criminal Procedure. The assessment of serious indications referred to the applicability of precautionary measures under art. 45 must take into account:
- the complex case of administrative offence attributable to the Entity;
- the dependency relationship with the predicate offence;
- the existence of an interest or advantage for the Entity.
The procedure for the application of precautionary measures is modelled on that outlined in the Code of Criminal Procedure, albeit with some exceptions. The Judge competent to order the measure, upon request of the Public Prosecutor, is the Judge in charge of the proceedings, or, in the phase of preliminary investigations, the Judge for Preliminary Investigations. The application order is the one provided for by art. 292 of the Code of Criminal Procedure, a provision expressly referred to in art. 45 of Decree 231.
On receiving the Public Prosecutor’s request, the Judge schedules an ad hoc hearing in chambers to discuss the application of the measure; in addition to the Public Prosecutor, this hearing is attended by the Entity and its defence counsel, who, prior to the hearing, may access the Public Prosecutor’s file and view the elements on which the request is based.
2.7 Prerequisites and aims of the adoption and implementation of an Organization, Management and Control Model
Generally speaking, the methods for the development of a valid Model are identified by art. 6 of the Decree, which, in paragraph 2, provides that said Models must meet the following requirements:
- identify the activities within the scope of which the Predicate Offences may be committed;
- envisage specific protocols aimed at planning the formation and implementation of the Entity’s decisions in relation to the Predicate Offences to be prevented;
- identify methods of managing financial resources that are suitable for preventing the Predicate Offences;
- provide for obligations to inform the Supervisory Body;
- introduce a disciplinary system capable of sanctioning any failure to comply with the measures indicated in the Model (hereinafter, for brevity, also the “Disciplinary System”).
Paragraphs 3 and 4 of art. 7 of the Decree also provide that:
- the Model must provide for suitable measures, both to ensure that the activity is carried out in compliance with the law, and to promptly discover risk situations, taking into consideration the type of activity carried out as well as the nature and size of the organization;
- the effective implementation of the Model requires periodic verification and its amendment if significant violations of the provisions of the law are discovered or if significant organizational or regulatory changes occur; the existence of an appropriate Disciplinary System is also important.
Moreover, it must be added that, with specific reference to the preventive effectiveness of the Model with reference to (negligent) offences concerning health and safety at work, art. 30 of Legislative Decree no. 81/2008 states that “the Organization and management model suitable for having an effective exemption from the administrative liability of legal entities, companies and associations, including those without legal status, pursuant to Legislative Decree no. 231 of 8 June 2001, must be adopted and effectively implemented, ensuring a corporate system for the fulfilment of all the related legal obligations:
- respect for the technical-structural standards of law relating to equipment, facilities, workplaces, chemical, physical and biological agents;
- activities of risk assessment and preparation of consequent prevention and protection measures;
- organizational activities, such as emergencies, first aid, contract management, periodic safety meetings, consultations with workers’ safety representatives;
- health surveillance activities;
- activities of information and training of workers;
- supervisory activities in relation to safe compliance with work procedures and instructions by workers;
- acquisition of documentation and certificates required by law;
- periodic checks on the application and effectiveness of the procedures adopted”.
Also pursuant to art. 30: “The Organizational and management model must provide for suitable systems for recording the performance of activities. The Organizational Model must in any case provide, as required by the nature and size of the organization and the type of activity carried out, an articulation of functions that ensures the technical skills and powers necessary for the verification, assessment, management and control of risk, as well as a disciplinary system suitable for sanctioning the failure to comply with the measures indicated in the Model. The Organizational Model must also provide for a suitable control system for the implementation of the same Model and the maintenance over time of the conditions of suitability of the measures adopted. The review and eventual modification of the Organizational Model must be adopted, upon detection of significant violations of the rules concerning the prevention of accidents and hygiene at the workplace, or in the event of changes in the organization and activity in relation to scientific and technological progress”.
The article of the law also provides that on first application, the company organization models defined in accordance with the UNI-INAIL guidelines for an occupational health and safety management system (OHSMS) of 28 September 2001 or the British Standard OHSAS 18001:2007 are presumed to comply with the requirements of this article for the corresponding parts.
It is evident, therefore, that, although this is not compulsory by law, the adoption and effective implementation of a suitable Model is, for the Entities, an indispensable prerequisite in order to benefit from the exemption established by the Legislator.
With a special decree of the Ministry of Labour and Social Policies, published in the Official Journal no. 45 of 24 February 2014, finally implemented were the “simplified procedures for the adoption and effective implementation of safety organization and management models in small and medium-sized enterprises” developed by the Permanent Advisory Commission for Occupational Health and Safety.
The document aims to “provide SMEs that decide to adopt a health and safety organization and management model, simplified organizational indications, of an operational nature, useful for the preparation and effective implementation of a business system suitable to prevent the crimes provided for by art. 25 septies of Legislative Decree no. 231/2001”, i.e. the crimes of “culpable homicide or grievous or very grievous bodily harm committed in violation of the rules on the protection of health and safety at work”.
3. REFERENCE PARAMETERS: GUIDELINES DRAWN UP BY TRADE ASSOCIATIONS
3.1. Guidelines developed by CONFINDUSTRIA
The Legislator has established, in paragraph 3 of art. 6 of the Decree, that the Model may be adopted on the basis of codes of conduct, drawn up by the trade associations representing the Entities, and communicated to the Ministry of Justice, which may make observations.
The first Association to draw up a guideline document for the development of models was Confindustria which, in March 2002, issued Guidelines, then partially amended and updated, in May 2004 and March 2008 and, most recently, in March 2014 (hereinafter, also “Confindustria Guidelines”). The adaptation of the Guidelines, which concerned both the general part and the appendix relating to the individual offences (so-called case study), is aimed at providing indications regarding the measures suitable for preventing the commission of the predicate offences envisaged at March 2014.
The Confindustria Guidelines for the development of Models provide associations and companies - whether or not they are affiliated with the Association - with methodological indications on how to prepare an organizational model capable of preventing the commission of the crimes indicated in the Decree.
The indications of this last document, the value of which is also recognized by the Decree, can be summarized according to the following basic points:
- identification of the risk areas, aimed at verifying in which area/company sector the crimes provided for by the Decree may be committed;
- identification of the ways in which offences are committed;
- performing risk assessment;
- identification of control points aimed at mitigating the risk of crime;
- gap analysis.
The most relevant components of the control system devised by Confindustria are:
- code of ethics and conduct;
- organizational system;
- manual and computer procedures;
- authorization and signatory powers;
- control and management systems;
- staff communication and training.
These components should be guided by the following principles:
- verifiability, documentability, consistency and congruence of each operation;
- application of the principle of separation of duties (no one can manage an entire process independently);
- documentation of controls;
- provision of an adequate system of sanctions for the violation of the procedures provided for by the model;
- identification of the requirements of the Supervisory Body, which can be summarized as follows:
- autonomy and independence;
- professionalism;
- continuity of action.
- Creation of information flows to and from the Supervisory Body.
In any case, it is important to highlight that the lack of compliance with specific points of the Guidelines does not in itself invalidate the validity of the Model, since these are indications of a general nature that require subsequent adaptation to the specific reality of the Entity in which they will operate.
In fact, each Model should be developed with the characteristics of the firm to which it applies in mind. In fact, the crime risk of each company is closely linked to the economic sector, the organizational complexity - not only in terms of size - of the company and the geographical area in which it operates.
Moreover, compliance with the Trade Association Guidelines is not sufficient to confer on the Models the chrism of non-censurability (see Court of Cassation, judgement no. 3307 of 18 December 2013).
4. ORGANIZATION, MANAGEMENT AND CONTROL MODEL OF FRETTE
4.1 The purpose of this Model
This Model takes into account the entrepreneurial reality of FRETTE and, with this in mind, especially in order to guarantee a more transparent and homogeneous interface between the public and private sectors, the Company has decided to adopt this Model, which also represents a valid tool for raising awareness and providing information to the Recipients, Other Recipients and Third Parties in general.
All this so that the aforementioned subjects, in the performance of their activities, behave correctly and transparently, in line with the values that inspire the Company in the pursuit of its corporate purpose and such as to prevent the risk of committing the crimes provided for by the Decree.
This Model has been prepared by the Company on the basis of the identification of the areas of possible risk in the company’s activities within which the possibility of committing offences is deemed to be the highest and has the following purposes:
- set up a prevention and control system aimed at reducing the risk of committing offences related to the company’s activities;
- make all those who work in the name of and on behalf of the Company, and in particular those involved in “areas of activity at risk”, aware that, in the event of violation of the provisions contained therein, they may incur in an offence liable to penal and administrative sanctions, not only against themselves but also against the Company;
- inform all those who work with the Company that the violation of the provisions contained in this Model will lead to the application of specific sanctions such as, for example, the termination of the contractual relationship;
- confirm that the Company does not tolerate unlawful conduct, of any kind and for any purpose whatsoever, and that, in any case, such conduct is always and in any case contrary to the principles that inspire the Company’s business activities, even if the latter were apparently in a position to gain an advantage.
4.2 The development of the Model and its adoption
On the basis, among other things, of the indications contained in the Trade Association Guidelines, the Company set up a Working Group, made up of Company resources and supported by external professionals with specific skills in the relevant matters and subjects of the reference regulations. The purpose of this Working Group was to map out the areas at risk and to identify and assess the risks relating to the types of offence covered by the regulations and the related Internal Control System. Based on the results of these activities, the Company has drawn up this Model.
The drafting of this Model was divided into the phases described below:
- preliminary examination of the company context through the analysis of company documentation and the carrying out of interviews with persons informed within the company structure in order to identify and specify the organization and the activities carried out by the various company functions, as well as the company processes into which the activities are divided and their concrete and effective implementation;
- identification of the areas of activity and company processes at “risk” or instrumental to the committing of offences (hereinafter, for brevity, referred to cumulatively as the “Offence Risk Areas”), carried out on the basis of the preliminary examination of the company context referred to in letter a) above;
- identification, for each area at risk, of the main risk factors, as well as the detection, analysis and assessment of the adequacy of existing company controls;
- identification of areas for improvement in the Internal Control System;
- adaptation of the Internal Control System in order to reduce the identified risks to an acceptable level.
On the basis of an examination of the documentation provided by the Company and the information gathered by the company representatives, “risk mapping” was drafted, which identifies the types of offence that may in theory be committed in the course of business activities.
In particular, the following were excluded from the so-called “risk mapping”:
- offences repealed as a result of subsequent legislative amendments:
- art. 25 ter of the Decree, art. 2623 Italian Civil Code “false prospectus”, provided for by art. 25 ter of the Decree and subsequently repealed by art. 34 of Law no. 626 of 28 December 2005;
- art. 25 ter of the Decree, art. 2624 Italian Civil Code “falsehood in reports and other communications of the auditing firm”, provided for by art. 25 ter of the Decree and subsequently repealed by art. 37, paragraph 34 of Legislative Decree no. 39 of 27 January 2010;
- art. 25 of the Decree, art. 346 Italian Penal Code “bragging rights”, provided for in art. 25 of the Decree and then repealed by art. 1, paragraph 1, letter s) of Law No. 3 of 9 January 2019.
- the types of offences whose risk of occurrence can be excluded or reduced as a result of the application of specific control principles:
- art. 24 ter of the Decree - Organized crime offences;
- art. 25 quater of the Decree - Crimes for the purpose of terrorism or subversion of the democratic order;
- art. 25 undecies paragraph 1, letter d) - Association crimes aggravated by environmental crimes;
- the types of offences whose risk of occurrence is incompatible with the corporate purpose or the corporate context of reference:
- art. 24 bis of the Decree - Computer crimes and unlawful processing of data, limited to the cases provided for by articles 615 quinquies “Dissemination of equipment, devices or computer programs aimed at damaging or interrupting a computer or telematic system”, 617 quater “Interception, impediment or illicit interruption of computer or telematic communications”, 617 quinquies “Installation of equipment aimed at intercepting, impeding or interrupting computer or telematic communications” and 640 quinquies “Computer fraud by the person providing electronic signature certification services” Italian Penal Code art. 1 paragraph 11 of decree law 21 September 2019 no. 105;
- art. 25 of the Decree - Crimes against the Public Administration - art. 317 Italian Penal Code “Extortion; art. 356 Italian Penal Code; art. 2 law no. 898/1986; articles 314, 316 and 323 of the Italian Penal Code.
- art. 25 bis of the Decree - Counterfeiting of money, public credit cards, revenue stamps and identification instruments or signs, with the exception of the offences referred to in articles 464, 473 and 474 of the Italian Penal Code, considered to be abstractly relevant for the Company;
- art. 25 bis 1 of the Decree - Crimes against industry and commerce, limited to the cases referred to in art. 516 of the Italian Penal Code “Sale of foodstuffs that are not genuine as genuine” and 517 quater of the Italian Penal Code “Counterfeiting of geographical indications or designations of origin for agri-food products”
- art. 25 ter of the Decree - Corporate Crimes, limited to articles 2629-bis of the Italian Civil Code “Failure to Communicate Conflict of Interest”; 2633 Italian Civil Code “Wrongful distribution of company assets by liquidators”; 2636 Italian Civil Code “unlawful influence on the meeting”.
- 25 quater 1 of the Decree - Practices of mutilation of female genital organs;
- art. 25 quinquies of the Decree - Crimes against the individual;
- art. 25 sexies of the Decree - Market abuse;
- art. 25 novies of the Decree - Crimes relating to violation of copyright - limited to the cases set forth in articles 171 ter, 171 septies and 171 octies of Law 633/1941;
- art. 25 undecies of the Decree - Environmental offences, limited to the cases envisaged by articles 452 sexties “Trafficking in and abandonment of highly radioactive material”, 727 bis “Killing, destruction, capture, removal, possession of specimens of protected wild animal or plant species” and 733 “Destruction or deterioration of habitats within a protected site” of the Italian Penal Code, as well as the cases referred to in art. 257 “Reclamation of sites”, 279, paragraph 5 “Violations regarding emissions” of Legislative Decree 152/2006, articles 1, 2 and 3 bis of Law no. 150/1992, regarding trade and possession of protected animal species, art. 3, paragraph 6 of Law no. 549/1993, regarding measures for the protection of ozone and atmospheric pollution and, most recently, by articles 8 and 9 of Law no. 202 of 06 November 2007, regarding pollution caused by ships;
- art. 25 quaterdecies of the Decree - Fraud in sports competitions, etc.
The assessment summarized above takes into account the current structure of the Company, the activities currently carried out by it and the types of offences indicated. In any case, the Company undertakes to carry out continuous monitoring of its activities both in relation to the aforementioned crimes and in relation to the regulatory expansion to which Decree 231 may be subject.
Therefore, based on the so-called “Risk Based Approach”, the Company has made a distinction for each predicate offence depending on the “risk of occurrence” of each of them in the corporate context (“high” - “medium” - “low” risk), as summarized below:
Subsequently, through the conduct of interviews with Company personnel, the Working Group carried out an inventory and specific mapping of Company activities (so-called “risk mapping”).
High risk
- Art. 25 bis of the Decree - Counterfeiting coins, public credit cards, revenue stamps and instruments or distinctive marks, limited to those cases referred to in Articles 473 of the Criminal Code “Counterfeiting, alteration or use of distinctive marks or signs, namely, patents, models and designs” and 474 of the Criminal Code (Introduction in the State and trading of forged products”;
- Art. 25 bis.1 of the Decree - Crimes against trade and industry, limited to the cases referred to in Arts. 514 “Fraud against national industries”, 515 “Trading fraud”, 517 “Sale of industrial products with false trademarks”, 517 ter “Manufacture and trading of goods made through the infringement of industrial property rights” of the Criminal Code,
- Art. 25 ter - Corporate offenses, limited to the case referred to in Arts. 2635 of the Civil Code “Corruption amongst private individuals” and 2635 bis of the Civil Code “Incitement to corruption among private individuals”;
- Art. 25 octies - Offenses of receiving, laundering and using money, goods and benefits of unlawful origin as well as self-laundering, with particular reference to the cases referred to in Arts. 648 bis “Laundering”, 648 ter “Use of money, goods or benefits of unlawful origin” and 648 ter.1 “Self-laundering”.
- Art. 25 of the Decree - Offenses against the Public Administration, limited to the cases of Corruption provided for and punished by Arts. 318, 319, 319 bis, 319 ter, 321, 322, 322 bis and 323 of the Criminal Code.
- Art. 25 ter of the Decree - Corporate crimes, limited to the cases of false company communications referred to in Arts. 2621, 2621 bis and 2621 ter of the Civil Code, impeding control pursuant to Art. 2625 of the Civil Code.
- Art. 25 septies of the Decree - Negligent homicide and serious or very serious injury committed in breach of occupational health and safety regulations, limited to the case referred to in Art. 590 of the Criminal Code only. “Negligent personal injury”;
- Art. 25 octies of the Decree - Offenses of receiving, laundering and using money, goods and benefits of unlawful origin as well as self-laundering, in relation to the case of “Receipt” referred to in Art. 648 of the Criminal Code;
- Art. 25 undecies of the Decree – Offenses against the environment, in relation to the case referred to in Art. 452 quinquies of the Criminal Code “Negligent crimes against the environment” and to the cases referred to in Articles 137 “Unauthorized discharge of waste water” and 256 “Unauthorized waste management activity” of Leg. Dec. no 152/2006 (Environmental regulations);
- Art. 25 octies 1 of the Decree - offenses relating to non-cash means of payment, referred to in Articles 493 ter and 493 quater of the Criminal Code.
- Art. 25 bis of the Decree - Counterfeiting coins, public credit cards, revenue stamps and instruments or distinctive marks, limited to the cases referred to in Art. 464 of the Criminal Code “Use of counterfeit or altered revenue stamps”;
- Art. 25 bis. 1 – Crimes against trade and industry, limited to the cases referred to in Arts. 513 of the Criminal Code “Disruption of the freedom of trade or industry” and 513 bis of the Criminal Code “unlawful competition with violence and threat”;
- Art. 25 ter – Company crimes, in relation to the following criminal offenses: (i) “Market manipulation”, pursuant to Art. 2637 of the Civil Code and “Obstacle to the performance of the functions of the public supervisory authorities”, pursuant to Art. 2638 of the Civil Code;
- Art. 25 septies - Offenses of “Negligent homicide and negligent serious or very serious injury, committed in breach of occupational health and safety regulations”, limited to the cases referred to in Art. 590 of the Criminal Code “Negligent homicide”;
- Art. 25 novies - Crimes in breach of copyright, limited to the criminal offenses recalled in Arts. 171 bis and 174 quinquies of Law 633/1941;
- Art. 25 decies - “Inducement not to make statements or to make false statements to the judicial authorities”;
- Art. 25 undecies - Environmental offenses, limited to those provided for in Arts. 452 and 452 quater of the Criminal Code; as well as Arts. 258(4) second sentence, 259(1), 260(1) and (2), 260 bis (6), (7) second and third sentences, and (8) of Leg. Dec. no 152/2006;
- Art. 25 duodecies – Crime of “Employment of illegal third-country nationals”;
- Art. 24 bis - Cybercrimes limited to the cases referred to in Arts. 491 bis, 615 ter, 615 quater, 635 bis, 635 ter, 635 quater and 635 quinquies of the Criminal Code;
- Art. 24 ter – Organized crime offenses with specific reference to the cases referred to in Arts. 416, 416 bis and 416 ter of the Criminal Code only;
- Art. 25 quater – Terrorism offenses or subversion of democratic order, limited to the cases under Arts. 270 bis and 270 sexies of the Criminal Code, New York Convention, Decree Law 12.15.1979, conv. with amend. to Law no 15 of 2.6.1980;
- Transnational offenses referred to in Art. 10 of Law no 146/2006, limited to the offenses provided for in Articles 377 bis, 416, 416 bis and 291 quater of Pres. Dec. 43/1973 only;
- Art. 25 quinquiesdecies – Tax offenses, referred to in Arts. 2,3,4,5,8, 10, 10 quater and 11 of Leg. Dec. no 74/2000;
- Art. 25 sexiesdecies – Smuggling offenses, referred to in Pres. Dec. no 43/73;
- Art. 25 septiesdecies – Crimes against cultural heritage, referred to in Arts. 518 novies, 518 ter, 518 decies, 518 undecies, 518 duodecies, 518 quaterdecies, 518 bis, 518 quater and 518 octies;
- Art. 25 duodevicies – Laundering of cultural assets and destruction and looting of cultural and landscape assets, referred to in Arts. 518 sexies and 518 terdecies of the Criminal Code.
- Crimes against the Public Administration;
- Corporate offences, corruption between private individuals and incitement to corruption between private individuals;
- Offences of receiving stolen goods, money laundering and use of money, goods or utilities of illegal origin, as well as self-laundering;
- Crimes of counterfeiting money, public credit cards, revenue stamps and identification instruments or signs and crimes against industry and trade;
- Offences related to health and safety at work;
- Environmental crimes;
- Computer crimes and offences in violation of copyright (limited to the cases referred to in articles 171, paragraph 1, letter a) bis and paragraph 3 and art. 171 bis of Law 633/41);
- Organized crime offences, offences against the administration of justice and transnational offences (limited to the cases referred to in articles 377 bis, 416, 416 bis and 416 ter of the Italian Penal Code);
- Employment of third-country nationals whose stay is irregular;
- Tax offenses;
- Smuggling offences.
- Crimes relating to non-cash means of payment
- Crimes against cultural heritage
- List of relevant crimes pursuant to Legislative Decree 231/2001;
- Code of Ethics;
- Disciplinary sanctions;
- Whistleblowing Procedure.
- organizational structure, aimed at ensuring a clear and organic assignment of tasks - providing, as far as possible, for a segregation of duties or, alternatively, compensatory controls - as well as controlling the correctness of conduct;
- organizational structure regarding health and safety at work, which complements the general one and constitutes a specification of the same with reference to the sector in question;
- system of powers of attorney and proxies, assigned in a manner consistent with the responsibilities assigned in order to ensure a clear and transparent representation of the company’s decision-making and implementation process;
- manual and computerised procedures, aimed at guaranteeing adequate transparency and knowledge of the decision-making processes as well as regulating the operational methods aimed at making and implementing decisions in the context of the Offence Risk Areas, including those relating to the correct management of financial resources;
- management control system; a process aimed at monitoring the efficiency and effectiveness of business activities, providing the management with as much information as necessary, among other things, to ensure the control of management in its economic, equity and financial aspects.
- Code of Ethics, containing the fundamental principles of the Company and the Guidelines on the conduct to be adopted in internal and external relations;
- Disciplinary System, to be applied in the event of violation of the Model (hereinafter also referred to as “Disciplinary System”)
- communication and involvement of personnel in the Model, as well as their education and training.
- FRETTE provides its group companies with certain coordination and strategic support services in multiple areas of activity, as well as funding. Besides, FRETTE distributes its own products to the Group companies and acquires part of the unsold inventory from its European associates.
- FRETTE also receives agency services for all of the Far East from FRETTE Pacific, a company that is controlled indirectly.
- retail outlets, managed directly by the Company;
- agency agreements;
- distribution agreements;
- concession contracts within department stores;
- business loan contracts for the outlets;
- BtoC e-commerce platform;
- agency and distribution agreements;
- BtoC e-commerce platform;
- its subsidiaries;
- tenders for supplies to public and private bodies;
- the areas into which the company’s activities are divided;
- the hierarchical reporting lines of the individual company departments;
- the people who operate in the individual areas and their organizational role.
- CEO
- Accounting Director, to whom responsibility for the following processes is entrusted:
- Management control and financial planning;
- Treasury and cash management;
- Accounting and administration;
- Credit management;
- Legal and corporate affairs;
- Real Estate;
- Human Resources Manager to whom responsibility for the following processes is entrusted:
- Organization;
- Personnel recruitment;
- Annual Goal Management and Variable Pay;
- Development and Training;
- Corporate Communications and Labor Relations.
- Supply Chain Director, to whom responsibility for the following processes is entrusted:
- Production and operational planning;
- Raw materials purchasing;
- Quality;
- External production/Converter;
- Hospitality production;
- Cost&Coding;
- Purchase of finished goods;
- Logistics and external warehouse management.
- Director of the product offering and collections, to whom responsibility for the following processes is entrusted:
- Style and design;
- Product development;
- Merchandising;
- Visual Merchandising;
- Retail Director, to whom responsibility for the following processes is entrusted:
- Store management;
- Outlet management;
- Coordination with merchandising for product offerings;
- Personnel and channel budget management;
- Management of discounting and sales canvass.
- Wholesale Emea Manager, to whom responsibility for the following processes is entrusted:
- International Wholesale Distribution (Home International);
- Home International organization coordination and definition;
- Distribution partner management;
- Price list management;
- Customer service and order management.
- Hospitality Director, to whom responsibility for the following processes is entrusted:
- Hospitality Channel Sales Management;
- Definition Sales Organization Hospitality Channel;
- Management of sales network including agents;
- Management of price lists by individual channel;
- Bid definition according to customer specifications;
- Participation in calls for tenders;
- Customer service and order management.
- E-commerce EU Manager, dealing with
- Customer care;
- E-commerce coordination.
- delegating party and the source of its power of delegation or power of attorney;
- delegated party;
- object, consisting of a list of the types of activities and acts for which the delegation/proxy is conferred;
- value limits within which the delegate is entitled to exercise the power conferred. This value limit is determined according to the role and position held by the delegate within the company organization.
- authorize a commitment and give authorization for payment,
- commit and authorize payment,
- commit and pay/collect,
- give authorization for payment and pay/collect.
- the Delegates, whatever their delegated powers, may neither authorize a commitment, nor grant a voucher for payment on their behalf, nor exercise a power if they have a personal interest, direct or indirect, in the resulting transaction;
- the acts of authorizing commitment and commitment for the same transaction are distinct and must normally be exercised by different and independent persons.
- there must always be at least two people in the commitment process (from the preparation of the commitment - the initial question - to the commitment itself). If the requester and the Budget Manager (i.e., the holder of the commitment authorization power) are the same person, his request must be formally approved by the higher level hierarchical authority, even if the amount in question is within the commitment authorization threshold of this manager.
- the formation and implementation of the entity’s decisions must be based on the utmost transparency and sharing among several parties;
- technical and operational functions must be kept separate from accounting and control functions;
- where possible, internal procedures must also be characterized by the separation of roles, with particular reference to the exercise of control functions, which must remain separate from decision-making and operational functions;
- the traceability of processes must be guaranteed;
- the principle of transparency must be implemented, consisting of both the visibility of procedures within the company and the completeness of the rules governing them, and the duty of communication and information on relevant decisions between the various company functions;
- reward systems based on objectively attainable performance targets must be modelled on standards programmed in advance by the competent departments.
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- encourage the involvement of multiple parties in order to achieve an appropriate separation of duties by contrasting functions;
- take steps to ensure that every operation, transaction, action is verifiable, documented, consistent and congruent;
- require the adoption of measures to document the controls carried out with respect to the operations and/or actions performed.
- defining in a clear, systematic and comprehensible manner the resources (monetary and non-monetary) available to individual Departments and functions and the scope within which these resources can be employed, through planning and budgeting;
- detect any deviations from what was predefined in the budget on the basis of monthly “actual” situations, analyse the causes and report the results of evaluations to the appropriate hierarchical levels for the appropriate adjustments;
- prepare interim forecasts in which the initial planning defined in the budget is revised on the basis of the variances detected in the actual-budget analysis;
- control and monitor the progress of expenditure related to marketing and sales activities, in terms of costs incurred and incentives recognized to the network;
- prepare three-year plans with annual updates.
- the participation of several responsible parties in the definition of available resources and expenditure areas, with the aim of guaranteeing the constant presence of controls and cross-checks on the same process/activity, aimed at ensuring adequate segregation of duties and constant monitoring of any deviations;
- the adoption of correct and homogeneous methods for the economic valuation of the initiatives, so as to ensure the possibility of comparing the economic values of the different company functions;
- the adoption of any corrective plans agreed between several parties in order to identify the best corrective strategy.
- the type of verification and supervisory activities carried out by the SB;
- the type of activities connected with updating the Model;
- the activity connected to the fulfilment of the tasks of information and training of the Recipients of the Model;
- the management of information flows to and from the SB;
- information flows to the Board of Directors;
- the functioning and internal organization of the SB (e.g., convocation and decisions of the Body, etc.).
- autonomy and independence, as:
- the control activities carried out by the SB are not subject to any form of interference and/or conditioning by internal subjects of the Company;
- it reports directly to management, i.e. the Board of Directors, with the possibility to report directly to the Shareholders and the Sole Auditor;
- the same has not been assigned operational tasks and does not engage in operational decisions and activities to protect and ensure the objectivity of its judgement;
- it is provided with adequate financial resources necessary for the proper performance of its activities;
- the internal operating rules of the Supervisory Body are defined and adopted by the same body;
- professionalism, in that the professional skills present within the Supervisory Body enable it to rely on a wealth of expertise both in terms of inspection activities and analysis of the control system, and in terms of legal skills; to this end, the Supervisory Body also has the right to make use of company departments and internal resources, as well as external consultants;
- continuity of action, as the Supervisory Body is an ad hoc body dedicated exclusively to supervising the functioning and observance of the Model;
- integrity and absence of conflicts of interest, to be understood in the same terms provided by law in respect of the directors and the Sole Auditor.
- verification and supervision of the Model, namely:
- verify the adequacy of the Model, in order to prevent the occurrence of unlawful conduct, and to highlight the possible implementation;
- verify the effectiveness of the Model, or the correspondence between the actual conduct and that formally provided by the Model;
- perform analysis of the maintenance, over time, of the soundness and functionality of Model 231;
- updating the Model, namely:
- take steps so that the Company ensures updating of the Model, proposing, if necessary, to the Board of Directors or any competent company departments, the adaptation of the same, in order to improve its adequacy and effectiveness;
- information and training on the Model, namely:
- promote and monitor initiatives aimed at fostering the dissemination of the Model among all subjects required to comply with its provisions (hereinafter also referred to as “Recipients”);
- promote and monitor initiatives, including courses and communications, aimed at promoting adequate knowledge of the Model on the part of all Recipients;
- evaluate requests for clarification and/or consultancy from company functions or resources or from administrative and control bodies, if connected and/or related to the Model;
- management of information flows to and from the SB, namely:
- ensure the punctual performance, by the subjects concerned, of all reporting activities relating to compliance with the Model;
- examine and evaluate all information and/or reports received and related to compliance with the Model, including any violations thereof;
- inform the competent bodies, as specified below, of the activities carried out, their results and the planned activities;
- report to the competent bodies, for the appropriate measures, any violations of the Model and the persons responsible, proposing the sanction deemed most appropriate in the concrete case;
- in case of controls by institutional subjects, including the Public Authority, provide the necessary information support to the inspection bodies;
- follow-up activities, i.e. verify the implementation and actual functionality of the proposed solutions.
- to carry out, even unannounced, all the checks and inspections deemed appropriate for the proper performance of their duties;
- to arrange, where necessary, for the hearing of resources that can provide useful indications or information regarding the performance of company activities or any dysfunctions or violations of the Model;
- to avail itself, under its direct supervision and responsibility, of the assistance of all the structures of the Company or of external consultants, basing its relations with them on the guidelines and procedures of the company and having them sign appropriate confidentiality clauses;
- to have at its disposal, for any requirement necessary for the proper performance of its duties, the financial resources allocated by the Board of Directors.
- arrange the Monitoring Plan, which should contain the objectives and priorities of the controls, the activities to be carried out, the budgets for expenditure and resources, and the estimated timeframe. The Monitoring Plan must be brought to the attention of the Board of Directors;
- inform the Board of Directors of any conflicts and limitations encountered while performing their duties;
- operate in accordance with Company policies and procedures.
- any orders received from the superior and deemed contrary to the law, internal regulations, or the Model;
- any requests for or offers of money, gifts (in violation of company rules and procedures) or other benefits from, or intended for, public officials or public service appointees;
- any omissions, negligence or falsifications in accounting or record-keeping underlying the accounting records;
- measures and/or news from the judicial police bodies or any other authority from which it can be inferred that investigations are being carried out that concern, even indirectly, the Company, its employees or members of the corporate bodies;
- requests for lawful assistance sent to the company by employees under the CCNL (Collective Contract National Labour), in the case of initiation of criminal proceedings against the same;
- news relating to disciplinary proceedings in progress and any penalties imposed or the reasons for their dismissal;
- any reports, not promptly acknowledged by the competent functions, concerning both deficiencies or inadequacies of the premises, of the work equipment, or of the protection devices made available by the Company, and any other dangerous situation connected with health and safety at work;
- information related to organizational changes and company procedures in force;
- updates of the system of powers and proxies;
- any communications from the auditing firm regarding matters that may indicate a deficiency in internal controls;
- decisions relating to the request, disbursement and use of public funds;
- statements summarizing the public or public-relevant tenders at national/local level in which the Company has participated and obtained the order; as well as statements summarizing any orders obtained following private negotiations;
- periodic reports on health and safety at the workplace, and specifically the minutes of the periodic meeting pursuant to art. 35 of Legislative Decree no. 81/2008, as well as all data relating to accidents at work that occurred at Company sites;
- the annual financial statements, accompanied by the explanatory notes;
- the assignments given to the auditing firm;
- communications from the Sole Auditor and the auditing firm concerning any critical issues that have emerged, even if resolved;
- results of any internal audit activities aimed at verifying effective compliance with the Code of Ethics.
- at any time, in the presence of particular necessity or in cases of urgency, reports to the Board of Directors, which makes the most appropriate decisions;
- reports in writing to the Board of Directors and the Sole Auditor on the activities carried out and their outcome, also providing an advance indication of the general lines of action for the following period, highlighting, in particular, the objectives and priorities of the controls, the activities to be carried out, the budgets for expenditure and resources, and the estimated timing.
- the activities, in general, carried out by the SB;
- any problems or critical issues that have come to light during the course of supervision;
- the necessary or possible corrections to be made in order to ensure the effectiveness and efficiency of the Model;
- the detection of conduct not in line with the Model;
- the detection of organizational or procedural shortcomings such as to expose the company to the risk that crimes relevant to the Decree may be committed;
- any lack of or deficient cooperation by company functions in the performance of their verification and/or investigation duties;
- in any case, any information deemed useful for the purposes of the assumption of urgent resolutions by the competent bodies.
On the basis of the results of the Risk Assessment, in view of the specific activity carried out by the Company, the following categories of offenses were assessed as “high” risk:
Medium risk
The types of predicate offenses indicated below, however, were assessed as “medium” risk:
Low risk
The following types of predicate offenses were deemed “low” risk:
Articles 24/25 of the Decree - Offenses against the Public Administration, in relation to the following criminal offenses: (i) Misappropriation and undue receipt of public funds, referred to in Articles 316 bis and 316 ter of the Criminal Code; (ii) Fraud to the detriment of the State or another public body, Aggravated fraud to obtain public funds and cyberfraud, referred to in Arts. 640, 640 bis and 640 ter of the Criminal Code; (iii) Corruption in judicial acts pursuant to Art. 319 ter, Undue inducement to give or promise benefits, referred to in Art. 319 quater of the Criminal Code; Art. 346 bis of the Criminal Code.
Subsequently, by interviewing Company staff, the Working Group drew up an inventory of the company activities, with specific mapping (known as “risk mapping”).
After these activities, the Working Group finalized a list of the “offense risk” areas, that is, those sectors of the Company and/or company processes where, in light of the mapping results, the risk of commission of the offenses, included in the Decree, abstractly referable to the types of activities carried out by the Company was abstractly deemed to exist. Furthermore, so-called “instrumental areas”, that is, those areas that, managing financial instruments and/or alternative means, may support the commission of offenses in risk areas, were identified (with regard to offenses against the Public Administration and “Corruption amongst private individuals”).
In particular, during the mapping activity, two types or risk activities were found - “core” and “non core” - with respect to the business carried on by the Company.
Therefore, the Working Group provided for the detection and analysis - as-is phase - of the organizational system and company controls in existence in order to check whether this was suitable to prevent the specific offenses provided for in the Decree in the areas of company activities identified as risk areas and, where necessary, improvements were proposed.
With regard to Law no 123/2007, which introduced liability for some types of offenses connected with the breach of occupational health and safety regulations, the organizational structure was subjected to a specific analysis that, as suggested by Confindustria Guidelines, was carried out on the entire corporate structure since, with reference to offenses of negligent homicide and serious or very serious injury committed in breach of occupational health and safety (hereinafter also “OH&S”) regulations, no sphere of activity can be excluded a priori, considering that these cases of offenses may in fact concern all company components. Preliminarily, the Working Group provided for the collection and analysis of the documentation pertinent to OH&S - including Risk Assessment Documents (“RAD”) etc. - required to understand the Company's organizational structure and the areas relating to OH&S, and to define the activities at the sites analyzed.
After these activities, the Working Group finalized a list of “offense risk” areas, that is, those sectors of the Company and/or company processes where, in light of the mapping results, the risk of commission of the offenses, included in the Decree, abstractly referable to the types of activities performed by the Company, with reference to which specific special parts were prepared, were abstractly deemed to exist.
Furthermore, so-called “instrumental areas”, that is, those areas that, managing financial instruments and/or alternative means, may support the commission of offenses in the risk areas, were identified (with regard to offenses against the Public Administration and “Corruption amongst private individuals”). Therefore, the Working Group provided for the detection and analysis of the company controls in existence - as-is phase - as well as the identification of points of improvement, providing appropriate suggestions to enable an action plan to be defined to tackle the relative topics.
At the end of the aforementioned activities, the Working Group drew up a list of “crime risk” areas, i.e. those sectors of the Company and/or company processes in respect of which, in light of the results of the mapping, the risk of committing crimes was deemed to exist in abstract terms, among those indicated by the Decree, which can be associated with the type of activity carried out by the Company. Also identified (with regard to offences against the Public Administration and corruption between private individuals), were the so-called “instrumental areas”, i.e. areas which, by managing financial instruments and/or substitute means, can support the commission of offences in areas at risk.
In particular, during the mapping activity, two types of risk activities were identified, “core” and “non-core” with respect to the business conducted by the Company.
The Working Group, therefore, surveyed and analysed - as-is phase - the organizational system and the company controls in place in order to verify whether they were suitable to prevent the specific crimes provided for by the Decree in the areas of company activity identified as being at risk and, where necessary, suggestions for improvement were formulated.
With reference to Law no. 123/2007, which introduced liability for certain types of offence connected with the violation of occupational health and safety regulations, the organizational structure was subjected to a specific analysis, which, as suggested by the Confindustria Guidelines, was conducted on the entire company structure, since with reference to the offences of homicide and grievous or very grievous bodily harm committed in breach of the rules for the protection of health and safety at work (hereinafter also referred to as “OHS”), it is not possible to exclude a priori any sphere of activity, given that this type of offence may, in fact, involve all company components. As a preliminary step, the Working Group collected and analysed the relevant documentation on OSH - including Risk Assessment Documents (“DVR”), etc. - necessary both for understanding the organizational structure of the Company and the areas relating to OSH, and for defining the activities at the sites under analysis.
At the end of the aforementioned activities, the Working Group drew up a list of “crime risk” areas, i.e. those sectors of the Company and/or company processes in respect of which, in light of the results of the mapping, the risk of committing crimes was deemed to exist in abstract terms, among those indicated by the Decree, which can be associated with the type of activity carried out by the Company, with reference to which specific special parts were prepared.
Also identified (with particular regard to offences against the Public Administration and corruption between private individuals), were the so-called “instrumental areas”, i.e. areas which, by managing financial instruments and/or substitute means, can support the commission of offences in areas at risk. The Working Group therefore provided for the detection and analysis of existing company controls - as-is phase - as well as the identification of improvement points, providing with the formulation of specific suggestions such as to allow the definition of an action plan to deal with the related issues.
4.3 The structure of the Model
This Model consists of a “General Part” and some “Special Parts”.
The “General Part” illustrates the contents of the Decree, the function of the Model, the duties of the Supervisory Body, the sanctions applicable in case of violations and, in general, the principles, logic and structure of the Model itself.
The “Special Parts” are dedicated to the following specific types of offence considered abstractly relevant on the basis of the organizational structure and company activities carried out:
The annexes, which form an integral part of the Model, as listed below:
4.4. The documents that make up the Model
For the purposes of this Model, reference is made expressly and in full to all the tools already in operation at FRETTE, including all the policies, procedures and rules of conduct adopted. These tools are an integral and substantial part of this Model.
In particular, the following protocols are an integral and substantial part of this Model (hereinafter, also “Protocols”):
5. THE GOVERNANCE MODEL AND ORGANIZATIONAL STRUCTURE OF FRETTE
5.1. The Company
The history of Frette began in 1860 with the goal of making superior quality home linens. Established from its beginnings in the cities of Monza and Milan, Frette uses only the finest yarns and most skilled artisans to create products that embody luxury, comfort and creativity. Recognized for their chic, original designs and refined finishes, Frette bedding sets adorn the rooms of the world’s most famous hotels, as well as the residences, yachts and planes of the most discerning clients.
Today, FRETTE is a limited liability company under Italian law, with sole shareholder and, in particular, fully owned by EDMUND FRETTE S.A.R.L., a company under Luxembourg law.
Moreover, at the date of drafting of this Model, the Company has several subsidiaries in Italy and abroad.
FRETTE Limited, a company incorporated under English law, wholly owned by Frette Srl. Frette Ltd, in turn, owns 100% of Frette Spain SL, Frette France Sarl and Frette Pacific Ltd;
FRETTE North America Inc., a company incorporated under U.S. law, the majority of whose share capital is held by Frette Srl (87.5%);
FRETTE Fine Linen (Shanghai) company limited, a company incorporated under Chinese law, wholly owned by Frette Srl.
Roma Piazza di Spagna Srl, a company incorporated under Italian law, wholly owned by Frette Srl.
All the subsidiaries manage their own marketing of the products supplied by the Company, with the exception of Frette North America Inc and Frette Fine Linen (Shanghai), which are supplied by third-party suppliers for the Hospitality sector.
Following the updating of the Model, Frette Srl’s subsidiaries, in April 2021, were as follows: Frette North America – New York; Frette China – Shanghai; Frette Asia/Pacific – Hong Kong; Frette France – Paris; Frette Limited – London; Frette Middle East; Frette Luxury Bedding Mexico; Frette Fine Linen India.
Following the updating of the Model, Frette Srl’s subsidiaries, in April 2023, were as follows: Frette North America – New York; Frette China – Shanghai; Frette Asia/Pacific – Hong Kong; Frette France – Paris; Frette Limited – London; Frette Middle East - Dubai; Frette Luxury Bedding Mexico - Mexico; Frette Fine Linen India - India, Frette Luxury Singapore Pte Ltd – Singapore.
The Company has its registered office in Milan and administrative headquarters in Monza. In addition to the registered office, there are ten local units, 9 of which serve as points of sale and one of which serves as the company’s administrative headquarters in Italy.
Currently Frette operates via two separate business divisions: “Home” for the marketing and distribution of end consumer products and “Hospitality” for the marketing and distribution of products for hotels, restaurants and other operators in the sector.
In relation to the Italian market, the Company operates via:
With regard to the foreign market, the Company operates via:
5.2 The governance system of FRETTE
The FRETTE governance model and, in general, its entire organizational system is structured in such a way as to ensure that the Company implements its strategies and achieves its objectives.
The structure of FRETTE has been created taking into account the need to provide the Company with an organization that guarantees utmost efficiency and operational effectiveness.
The Company has a 3-member Board of Directors and a Sole Auditor to oversee the administration, both appointed by the Shareholders’ Meeting.
In addition to these figures, there is also the auditing firm, which guarantees the transparency and correctness of the data reported in the financial statements.
In addition, the Steering Committee consisting of the CEO, COO, Product Manager, and Supply Chain Director meets once a month.
5.3 The Frette Organizational Structure
The Company’s organizational structure, designed to ensure, on the one hand, the separation of roles, tasks and responsibilities among the various functions and, on the other hand, the greatest possible efficiency, is characterized by a precise definition of the competences of each company area and the related responsibilities.
The Company has developed a detailed Organizational Chart in which the general structure of the Frette Group and the Company’s entire organizational structure are outlined.
The Organizational Chart, in particular, specifies:
The Organizational Chart, with the relevant hierarchical and functional reporting lines, is kept by the personnel office.
The function managers act on the basis of specific delegations of function with internal validity that detail their powers and activities, specifying, where necessary, the operational limits.
The Company also has specific job descriptions in which, for each function, the specific mission is reported by means of a summary of the purposes and the main areas of responsibility, as well as the hierarchical reporting lines.
The Company’s organizational structure consists of Top Management, whose responsibility is attributed to the Chief Executive Officer (hereinafter also referred to as CEO), and of various functions that report hierarchically and functionally to the same.
Specifically, responsibilities and tasks are distributed among the following company departments/functions, which are assigned duties and responsibilities in line with the specific competencies required.
6. THE ORGANIZATIONAL STRUCTURE IN TERMS OF HEALTH AND SAFETY
In compliance with the provisions of the Confindustria Guidelines, the Company has adopted an organizational structure that complies with the provisions of the prevention regulations in force, with a view to eliminating or, where this is not possible, reducing - and therefore managing - the occupational risks for workers.
The Company, in relation to each of its offices, has drawn up a Risk Assessment Document and prepared an appropriate organizational structure in terms of health and safety at work, clearly and formally identifying the persons responsible for health and safety in the workplace.
7. THE DELEGATION AND PROXY SYSTEM
7.1 General principles
As required by good corporate practice and also specified in the Confindustria Guidelines, the Board of Directors is the body responsible for formally conferring and approving delegated and signing powers, assigned consistently with the organizational and management responsibilities defined, with a precise indication of the approval thresholds for expenses.
The level of autonomy, power of representation and spending limits assigned to the various holders of proxies and powers of attorney within the Company are identified and established in a manner consistent with the hierarchical level of the recipient of the proxy or power of attorney, within the limits of as strictly necessary for the performance of the tasks and duties covered by the proxy.
Powers of attorney are always formalized through notarized deeds and communicated to the recipient for full knowledge. In addition, powers of attorney with external relevance are then registered with the relevant Company Registry Office.
Each of these acts of delegation or power of attorney then provides the following indications:
As far as the attribution of powers is concerned, as a rule, the same delegate cannot for the same transaction:
In addition, in accordance with the principles of internal control:
8. MANUAL AND COMPUTER PROCEDURES
The procedures prepared by the Company and at Group level, both manual and computerized, constitute the rules to be followed within the company processes concerned.
In general, the internal procedures and practices adopted by the Company are based on the following principles:
As far as IT procedures are concerned, it can be stated that the main management systems of the administrative and control area, as well as those of the order/invoice flow management area, are supported by high quality IT applications.
In particular, the company’s IT systems guarantee the traceability of individual steps and the identification of the operator by whom the data is entered or modified in the system.
They are in themselves the “guide” to how to carry out certain transactions and ensure a high level of standardization and compliance, since the processes managed by these applications are validated before the software release.
In this context, therefore, the Company ensures compliance with the following principles:
9. MANAGEMENT CONTROL AND CASH FLOWS
The management control system (hereinafter also referred to as “Management Control”) provides mechanisms for verifying the management of resources that must ensure, in addition to the verifiability and traceability of expenses, the efficiency and economy of business activities, aiming at the following objectives:
9.1 Planning and budgeting phase
To achieve the above objectives, the existing multi-year plan and budget strategic definition processes ensure:
In particular, for CAPEX and the main OPEX, the budgeting process is managed through the use of an IT system for planning and control that ensures greater fluidity in the process of preparing the budget, as it allows each person to work on the application at their own level of competence, and greater responsibility of the individual cost centres.
9.2 Accounting phase
In this phase, Controlling ensures constant verification of the consistency between the expenses actually incurred and the commitments made during planning.
Monitoring of deviations, in terms of costs, with respect to the planned budget is carried out monthly in relation to each cost centre and type of account, data relating to the final balance of the previous year, the budget defined for the current year, the expected target and the final balance.
The controller and/or the individual functions, also through the examination of IT applications, have the possibility to detect and/or report deviations, performing a joint analysis of the relative causes and the corrective actions to be taken.
10. CODE OF ETHICS
10.1 Relationship between the Organization, Management and Control Model and the Code of Ethics
An essential element of the preventive control system is represented by the adoption of a Code of Ethics that represents an instrument adopted independently and susceptible of application on a general level in order to express the principles of “business ethics”, which the entity recognizes as its own and on which it calls for compliance by all employees.
The Frette principles of business ethics are contained in the FRETTE Code of Ethics.
The Model and the Code of Ethics are closely related and must be understood as the expression of a single body of rules adopted by the Company in order to promote the high moral principles of fairness, honesty and transparency in which FRETTE believes and intends to standardize its activities.
The Model responds to the need to prevent, through the implementation of specific rules, processes and procedures, the commission of the crimes provided for by Decree 231 and in general by the law.
The FRETTE Code of Ethics is a general instrument that establishes the conduct which the Company intends to promote, disseminate, respect and enforce in the performance of its business activities in order to protect its reputation and image in the market.
The Code of Ethics, to which reference should be made for brevity, expresses the company’s “ideal social contract” with its stakeholders and defines the ethical criteria adopted in balancing the expectations and interests of the various stakeholders.
It contains the fundamental principles of the Company and the Guidelines for the conduct to be adopted in internal and external relations; it also contains the codes of conduct in relation to any areas of ethical risk. Therefore, it should be pointed out that these principles aim at avoiding the commission of offences - both those provided for and those not provided for by the Decree - as well as conducts that are not in line with the Company’s ethical expectations.
11. THE DISCIPLINARY SYSTEM
11.1 Purpose of the disciplinary system
FRETTE regards compliance with the Model as essential. Therefore, in compliance with art. 6, paragraph 2, letter e) of Decree 231, the Company has prepared the Disciplinary System, annexed to the Model, in order to sanction non-compliance with the rules laid down in the Model, since the violation of such rules and measures, imposed by FRETTE for the purpose of preventing the offences laid down in Decree 231, damages the relationship of trust established with the Company.
For the purposes of application by FRETTE of the disciplinary sanctions laid down in the Disciplinary System, the initiation of any criminal proceedings and their outcome are not necessary, since the rules and measures laid down in the Model are adopted by FRETTE in complete autonomy, regardless of the offence that any conduct may give rise to.
Although reference should be made to the relevant document for details, a brief description of the Disciplinary System adopted by the Company is provided below.
The Disciplinary System defines the penalties provided for violations of the principles and rules of conduct on which the Model is based.
Conduct subject to sanctions that constitutes a violation of the Model is as follows:
- violation of the procedures laid down in the Model or adoption, in the performance of sensitive activities, of conduct that does not comply with the provisions of the Model;
- violation of the procedures laid down in the Model or adoption, in the performance of sensitive activities, of conduct clearly in violation of the provisions of the Model itself that exposes the Company to an objective situation of imminent risk of committing one of the offences under Legislative Decree 231/2001.
Once the Supervisory Body has received a report of an infraction, it shall, in accordance with the procedures provided for in the Disciplinary System, notify the person to whom the infraction is attributed; it shall also initiate investigative activities in order to verify the actuality and seriousness of the violation as well as the correct identification of the person responsible.
At the end of the investigation, the Supervisory Body draws up a report that is sent to the organizational unit responsible for personnel management.
Any sanctions will be imposed with regard to the seriousness of the infringements: in view of the extreme importance of the principles of transparency and traceability, as well as the importance of monitoring and control activities, the Company will be inclined to apply the measures with the greatest impact to infringements that by their very nature violate the very principles on which this Organizational Model is based.
The provisions that regulate the disciplinary phase are combined with those of a higher level, including those of the CCNL and regulatory laws, from which they may not derogate under any circumstances.
The ascertainment of any responsibilities deriving from the violation of the Model and the attribution of the sanction must in any case be conducted in compliance with the regulations in force, the privacy, dignity and reputation of the persons involved.
12. TRAINING, COMMUNICATION AND DISSEMINATION OF THE MODEL
12.1 Communication and involvement on the Model and related Protocols
The Company promotes the widest possible dissemination, inside and outside the structure, of the principles and provisions contained in the Model and in the protocols connected to it. The Frette Code of Ethics and an extract of the Model are published on the Company’s website.
The Model is formally communicated to all Management Personnel and to the Company’s Personnel by means of the delivery of a complete copy, in electronic form or by telematic means, and by posting it in a place accessible to all, as provided for by art. 7, paragraph 1, Law no. 300/1970, as well as by means of publication on the company Intranet.
For Third Parties required to comply with the Model, it is made available in summary form on the Company’s website.
For the purposes of the involvement of and compliance with the Model by Third-Party Recipients, Frette prepares specific clauses that provide for the obligation to comply with the Decree and the Code of Ethics, with the application of the relative sanctions in case of violations.
The SB keeps a documentary record of the communication, as well as of the attestations that the Model has been communicated and of the relevant statements of commitment.
12.2 Education and training on the Model and related protocols
In addition to the activities connected with informing the recipients, the Company has the task of ensuring periodic and constant training for its personnel.
In turn, the SB must promote and monitor the implementation, by the Company, of initiatives aimed at fostering adequate knowledge and awareness of the Model and the protocols connected to it, in order to increase the culture of ethics and control within the Company.
In particular, the principles of the Model are to be illustrated to company resources by means of specific training activities (e.g. courses, seminars, questionnaires, etc.), in which participation is obligatory and the methods of execution are planned through the preparation of specific training plans, implemented by the Company.
Courses and other training initiatives on the principles of the Model must be differentiated on the basis of the role and responsibility of the resources involved, i.e. through the provision of more intensive training characterized by a higher degree of in-depth analysis for persons qualifying as “management” in accordance with the Decree, as well as for those operating in areas qualifying as “at direct risk” in accordance with the Model.
In particular, the contents of the training sessions must include a part relating to Decree 231 and the administrative liability of entities (regulatory sources, offences, sanctions against individuals and companies and exemptions) and a specific part on the Organization, Management and Control Model adopted by the Company (Reference principles for the adoption of the organization, management and control models pursuant to Decree 231, General Part and Special Parts of the Model).
Evidence of successful participation in training courses must be kept and adequate documentation provided.
The training programs for members of the FRETTE distribution network must include a module dedicated to Decree 231 and the principles of the Organization, Management and Control Model adopted by the Company, as well as the principles of the Code of Ethics.
13. SUPERVISORY BODY
13.1 Composition and appointment
FRETTE has opted for a single-member Supervisory Body, taking into account the objectives pursued by law and the size and organization of the Company.
The Supervisory Body is appointed by the Board of Directors and remains in office for the duration of 3 financial years or for the shorter period of time established at the time of appointment, but in any case not less than 1 financial year.
The Board of Directors may provide that the Supervisory Body remains in office until the expiry of the term of office of the Board of Directors that appointed it, in compliance with the minimum term provided for above.
At the time of appointment, the Board of Directors establishes the remuneration, if any, due to the Supervisory Body. The Board of Directors, during the formation of the company budget, decides on the approval of an adequate allocation of financial resources to the Supervisory Body, based on a proposal received from the Supervisory Body itself.
The Supervisory Body may use the allocated budget for any requirements necessary for the proper performance of its duties (e.g. specialist consultancy, travel, etc.).
13.2 The Regulation
The SB is responsible for drawing up its own internal document aimed at regulating the concrete aspects and methods of the exercise of its action, including the relative organizational and operational system.
In particular, within the framework of said internal regulation, the following profiles, among others, are regulated:
Furthermore, it is advisable to provide that every activity of the Supervisory Body be documented in writing and that every meeting or inspection in which it participates be duly recorded.
13.3 Termination of office
Termination of office due to expiry of the term takes effect from the moment the Supervisory Body is reconstituted.
The termination of office may also occur due to renunciation, forfeiture, revocation or death.
Any person appointed to carry out the functions of the Supervisory Body who resigns from the office is obliged to notify the Board of Directors in writing so that a timely replacement can be made.
The Supervisory Body shall cease to hold office in the event of a supervening lack of the requisites for assuming the office (for example, disqualification, incapacity, bankruptcy, conviction to a sentence entailing disqualification from public office or in the event of conviction for any of the offences set out in Decree 231 and, in general, in the event of incapacity and incompatibility, conflict of interests, etc.).
The Supervisory Body may be revoked for just cause by the Board of Directors, after consulting the Sole Auditor. By way of example, just cause exists in the event of non-compliance with the obligations laid down for the Supervisory Body, the existence of a conflict of interest, the impossibility of carrying out the activities of a member of the Supervisory Body, etc.
In the event of renunciation, forfeiture, revocation or death, the Board of Directors will replace the person appointed to the functions of the Supervisory Body who has ceased to hold office, having consulted the Sole Auditor. The person thus appointed remains in office for the remaining term of the Supervisory Body.
13.4 The requirements
In compliance with the provisions of art. 6, paragraph 1, of Decree 231, the Supervisory Body has the task of supervising the operation of and compliance with the Organization, Management and Control Model, to take care of its updating and is endowed with autonomous powers of initiative and control.
The requirements to be met by the control body for effective performance of the above functions are:
The Board of Directors evaluates the permanence of the aforementioned requirements and conditions of operation of the Supervisory Body, that the members of the Supervisory Body possess the subjective requirements of integrity and competence and are not in situations of conflict of interest, in order to further guarantee the autonomy and independence of the Supervisory Body.
13.5 Functions, activities and powers of the Supervisory Body
In accordance with the provisions of art. 6, paragraph 1 of Decree 231, the Supervisory Body of FRETTE is entrusted with the task of supervising the operation of and compliance with the Model and of updating it.
In general, therefore, the SB is responsible for the following tasks:
In order to carry out the tasks assigned to it, the SB is granted all the powers necessary to ensure prompt and efficient supervision of the operation of and compliance with the Model.
The SB, also through the resources at its disposal, has the power, by way of example:
In any case, the Supervisory Body, while carrying out its duties, must:
The Supervisory Body is required to report the results of its activities to the CEOs and the Board of Directors.
In particular, the SB reports on the violations of the Model found in view of the adoption of the relative sanctions and, in the event of cases that highlight serious criticalities of the Model, it presents proposals for modifications or integrations.
The Supervisory Body must prepare, for the management body, an informative report, at least every six months, on the supervisory activities carried out and the outcome of such activities and on the implementation of the Organization, Management and Control Model within the Company; this report must be sent to the Sole Auditor.
The activities of the Supervisory Body are unquestionable by any body, structure and function of the company, without prejudice, however, to the obligation of vigilance on the part of the Board of Directors regarding the adequacy of the Supervisory Body and its intervention, since the Board of Directors is in any case responsible for the functioning and effectiveness of the Model.
In order to carry out the supervisory functions assigned to the Supervisory Body, the latter has adequate financial resources and has the right to make use - under its direct supervision and responsibility - of the aid of internal company structures and, if necessary, of the support of external consultants in compliance with the applicable company procedures.
The regulation of the internal functioning of the Supervisory Body is delegated to the same body, which defines - by means of specific regulations - the aspects relating to the carrying out of the supervisory functions, including the determination of the time intervals of the controls, the identification of the criteria and the analysis procedures, the minuting of the meetings, the regulation of the information flows and so on.
13.6 Information flows involving the Supervisory Body
The SB must be promptly informed by all company subjects, as well as by third parties required to comply with the provisions of the Model, of any news concerning the existence of possible violations thereof.
In any case, any information that may be related to violations, even potential violations, of the Model, including but not limited to the following, must be compulsorily and immediately sent to the SB:
Information relating to the Company’s activities, which may be relevant to the performance of the duties assigned to the Supervisory Body, including, but not limited to:
Personnel and all those who work in the name and on behalf of the Company who come into possession of information relating to the commission of offences within FRETTE or practices that are not in line with the rules of conduct and the principles of the Code of Ethics are required to promptly inform the Supervisory Body.
Lastly, it should be noted that Law 179/2017 intervened on art. 6 of Legislative Decree 231/2001 by prescribing the provision, within the Model of:
1. one or more channels that allow senior and subordinate managers to present - in order to protect the integrity of the company - detailed reports of unlawful conduct (relevant under “231” and based on precise and consistent facts) or violations of the Organization and Management Model, of which they have become aware due to their functions;
2. reporting channels suitable for guaranteeing the confidentiality of the identity of the whistleblower in the management of the report;
3. at least one alternative reporting channel capable of guaranteeing, by computerized means, the confidentiality of the identity of the whistleblower;
4. an express prohibition of retaliatory or discriminatory acts (direct or indirect) against the whistleblower, for reasons related (directly or indirectly) to the report;
5. appropriate sanctions against those who violate the measures for the protection of the whistleblower, as well as those who make reports that turn out to be unfounded with malice or gross negligence.
In view of the above, the Company has activated the channels specified below in order to allow not only management and subordinates, but also members of the Corporate Bodies, Suppliers and Collaborators to submit - in order to protect the integrity of the entity - detailed reports of unlawful conduct (capable of generating, even only in abstract terms, a possible administrative liability of the Company pursuant to Legislative Decree 231/2001 and based on precise and concordant facts) or of violations of the same Organization and Management Model, of which they have become aware due to the functions and/or activities carried out.
In particular, reports must be addressed in writing (not anonymously) to the Supervisory Body by one of the following methods:
a) e-mails to the address odv231@frette.com (managed by the Supervisory Body);
b) communication to be addressed to the Supervisory Body at the Company’s registered office.
The SB, during the course of the investigation that follows the report, must act in such a way as to guarantee that the persons involved are not subject to retaliation, discrimination or, in any case, penalization, thus ensuring the confidentiality of the whistleblower (except for the occurrence of any legal obligations that impose otherwise). To this end, the procedure for the application of the rules introduced by Law 179/2017 on whistleblowing and protection of the Whistleblower was prepared and approved.
The information provided to the Supervisory Body is intended to facilitate and improve its control planning activities and does not require it to systematically and punctually check all the phenomena represented: it is therefore left to the discretion and responsibility of the Supervisory Body to establish in which cases to take action.
With regard to the activity of reporting of the SB towards the corporate bodies, the SB:
Reporting activities will focus on:
Minutes must be kept of meetings with the Board of Directors, and copies (if necessary also of the minutes of the Board of Directors meetings limited to the relevant item on the agenda) must be kept at the offices of the SB.
In any case, the SB can report to the Board of Directors, its Chair, the Sole Auditor and the Auditing Firm at any time it deems appropriate. In meeting cases, minutes are always taken.
14. ADOPTION AND UPDATING OF THE MODEL
The adoption and effective implementation of the Model are, by express legislative provision, the responsibility of the Board of Directors.
Among the duties of the SB there is that of taking care of the updating of the Model and therefore of reporting to the Board of Directors the need to update the Model. Updating is required, by way of example only, as a result of changes in organizational structures or operational processes, significant violations of the Model itself, or legislative additions.
The power to update the Model rests with the Frette Board of Directors. Communication and training on updates to the Model must follow the same procedures as approval.
