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Executive Committee


The Executive Committee members include the Chairman, Luciano Benetton, the CEO, Silvano Cassano, and Board members Alessandro Benetton and Gianni Mion.

The meetings of the Executive Committee are also attended, without voting rights, by the Board of Statutory Auditors and the chairman of the Internal Audit Committee.

The Executive Committee’s responsibilities include defining strategic, industrial, and financial plans for the Group, as proposed by the CEO - preliminarily to the analysis by the Board of Directors - as well as preparing the annual budgets and interim forecasts.

The Executive Committee also examines and approves particularly significant investment and divestment plans, the approval of financing, and the provision of guarantees, and analyzes the most significant issues related to Company performance, to enable the Board of Directors to carry out its duties effectively.

In 2005, the Executive Committee met three times.

The Board of Statutory Auditors


The Board of Statutory Auditors is made up of the following members:
– Angelo Casň – Chairman;
– Filippo Duodo – Auditor;
– Antonio Cortellazzo – Auditor;
– Marco Leotta – Alternate Auditor;
– Piermauro Carabellese – Alternate Auditor.

A complete overview of the qualifications of the members of the Board of Statutory Auditors is available on the Company’s web site in the Corporate Governance section.

All members of the Board were appointed on May 16, 2005. Their terms expire with the meeting of shareholders to approve the financial statements for 2007. The members of the Board were appointed in accordance with the criteria established by Article 148 of the Italian Consolidated Law on Finance (TUF for Testo Unico della Finanza) in effect at the time, as reflected in Article 19 of the Company’s Articles of Association, and based on the lists of candidates presented to the company 10 days prior to the meeting of shareholders along with sufficient documentation of their professional and personal qualifications.

There is no auditor representing minority interests, as no related list of candidates was submitted.

During 2005, the Board of Statutory Auditors met 12 times.

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Remuneration Committee and Nomination Committee


In implementation of the Corporate Governance Code for listed companies and with the responsibilities indicated therein, the Board of Directors confirmed the appointment of Reginald Bartholomew, Ulrich Weiss, and Gianni Mion (chairman) to the Remuneration Committee for financial year 2005. As such, this Committee is comprised primarily of non-executive directors and includes one non-independent director, given the current composition of the Company’s shareholders structure.

As expressly defined by the related rules and procedures, the Remuneration Committee makes recommendations to be submitted to the Board of Directors, with those directly concerned removing themselves from the related deliberations of the Board. In 2005, the Remuneration Committee met twice.

Again for 2005, the remuneration for the executive directors and those with particular responsibilities were assigned by the Board of Directors, based on the recommendations of the Remuneration Committee, as indicated in the explanatory notes to the Consolidated Financial Statements of Benetton Group, subject to definition of the total remuneration by the shareholders’ meeting as required by the Articles of Association.

In 2004, with the help of external experts in preparing the variable components of remuneration, the Remuneration Committee also recommended the adoption of a stock option plan in order to motivate and promote the loyalty of the Company’s top management. The Company then adopted the proposed plan and assigned five managers a total of 3,233,577 options convertible into the same number of Company shares to be purchased at a price of 8.984 euro each, subject to the achievement of certain corporate objectives and targets.

Additional information is provided in the section “Stock options” in the Directors’ report accompanying the Statutory and Consolidated Financial Statements of Benetton Group S.p.A. The content of this stock option plan can be found on the Company’s web site in the Corporate Governance section.

The Board of Directors has not yet deemed it to be necessary to establish a Nomination Committee for the appointment of directors, given the current composition of the Company’s shareholder structure.

The appointment of directors is done based on a single list filed with the Company prior to the meeting of shareholders along with sufficient documentation of the personal and professional qualifications of the candidates indicated.

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The Internal Audit Committee. Internal Control.


The Internal Audit Committee is composed of three independent, non-executive directors. On May 16, 2005, the Board members Ulrich Weiss and Luigi Arturo Bianchi were confirmed to the committee, and Giorgio Brunetti was appointed.

In 2005, given that Benetton shares are listed on the New York Stock Exchange, and in compliance with the provisions of recent U.S. legislation concerning foreign private issuers, the Company vested the Internal Audit Committee with all powers necessary to fulfill the requirements of such legislation.
This decision, which was formally approved by the Company’s Board of Directors, was formally communicated to and approved by the U.S. Securities Exchange Commission (SEC).
This was made possible by the existence within the Company of an Internal Audit Committee - composed solely of independent directors, one of whom (Giorgio Brunetti) is a financial expert as defined by the aforementioned legislation - which was already appropriately structured and effective, thanks in part to the existence within the Company of the “Internal Control” function, which assists the Committee.
As a result, it was necessary to modify the rules of the Internal Audit Committee in order to vest it with all responsibilities, duties and powers required in the U.S. for such a committee, compatibly with Italian laws and regulations.

As such, the Internal Audit Committee’s responsibilities include:
  • evaluating the process of determining the financial statement account balances, with the help of the head of the Internal Control function;
  • evaluating the appropriateness of the accounting principles adopted, together with the Company’s CFO and the independent auditing firm;
  • receiving, as point of contact for the auditing firm, information and communications regarding the consolidated accounts and Form 20-F concerning critical issues involving the standard or alternative accounting treatment of certain items; receiving from and transmitting to management information and communications regarding such issues;
  • evaluating the proposals of independent auditing firms, with the help of the Company’s CFO and the head of the Internal Control function, for the purposes of hiring such a firm, and making related recommendations that the Board of Directors is to then present to the shareholders’ meeting;
  • evaluating the results of the independent auditor’s report;
  • adopting procedures for (a) receiving and handling complaints received by the Company regarding issues of accounting, internal accounting controls, or auditing in general, and (b) receiving, filing, and handling reports or disputes filed by employees regarding accounting issues or auditing in general, while ensuring the anonymity of the employee concerned. To that end, specific “Procedure for reporting complaints to the internal audit committee”, has been adopted;
  • evaluating all auditing and other services provided by the independent auditing firm and expressing an opinion as to their appropriateness and consistency as a necessary requirement prior to hiring such firm;
  • verifying the independence of the auditing firm.

During 2005, the Committee, chaired by Ulrich Weiss, met eight times, with the participation of the entire Board of Statutory Auditors, in compliance with the adopted rules and procedures.

The functioning and appropriateness of the system of internal control were verified by the Board of Directors, in part with the help of the related corporate function coordinated by the head of Internal Control, who reports directly to the chairman of the Internal Audit Committee.

The systems of organization and reporting were seen to be adequate to ensuring the monitoring of the system of administration and accounting, including for subsidiaries.

Efforts also continued on the mapping of processes, risks and existing controls concerning the main operating processes of the companies of the Group, while also conducting an analysis of the consistency of the related internal control procedures. Because Benetton shares are also listed in the U.S., this process was also conducted in compliance with the provisions of the Sarbanes-Oxley Act. The independent directors, the Board of Statutory Auditors and the independent auditing firm were adequately informed on the process, as well.

In 2005, the Supervisory and Monitoring Body (Organismo di Vigilanza e Controllo, pursuant to Article 6(1)(b) of Italian legislative decree no. 231/2001), which is composed of Ulrich Weiss (chairman), Luigi Arturo Bianchi and Roberto Taiariol, carried out its responsibilities of control of the observance and functioning of the Organizational and Operational Model adopted by the Company. This Model is comprised of the following:
– Code of ethics;
– Operating procedures and reporting systems;
– Internal supervisory and monitoring body;
– Disciplinary system.

The rules of the Internal Audit Committee and its procedures for reports, complaints, and disputes can be found on the Company’s web site in the Corporate Governance section.

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