Appointment and replacement

In accordance with Article 9 of the Bylaws (which it is proposed to amend at the shareholders' meeting on 15 May 2012, to bring them into line with the law on gender balance), the Board of Directors (composed of a minimum of 7 to a maximum of 19 Directors, as determined by the Shareholders’ meeting) is appointed on the basis of slates submitted by persons entitled to vote holding a total of at least 0.5% of the ordinary share capital or different proportion as required by Consob. By Resolution no. 18083 of 25 January 2012, Consob fixed this percentage for Telecom Italia at 1%.

Four-fifths of the Directors to be elected are chosen from the slate that obtains more votes (so-called Majority Slate) in the order they are listed on the slate; in the event of a fractional number, it shall be rounded down to the nearest whole number. The remaining directors are chosen from the other slates. To that end, the votes obtained are divided by progressive whole numbers starting from one up to the number of Directors to be elected and the quotients assigned to the respective candidates, in the order listed. The quotients assigned in this way are arranged in a single decreasing ranking and the candidates who have obtained the highest quotients are elected, without prejudice to the legal provisions requiring the presence of at least one Director chosen from a slate not connected with the shareholders who have submitted or voted for the Majority Slate and at least two Directors meeting the requirements of independence legally established for the members of the Board of Auditors. For the appointment of Directors for any reason not appointed pursuant to the procedure described above, the Shareholders’ meeting passes the resolutions with the legal majority.

At its meeting on 1 December 2011 the Board of Directors adopted a procedure for planning the succession of Executive Directors, in order to ensure the availability over time of a shortlist of possible replacements, with reference to cases of retirement earlier than the ordinary expiry of the term of office: the prime objective of the succession plan is speedy and orderly management of any emergency situations, while providing, as the natural expiry of the term of office approaches, a formulation of a recommendation on the profile of the candidates for the renewal of their executive offices, to be discussed at Board meetings, without however affecting the principle that the formulation of candidatures is the responsibility of shareholders. The people involved in determining the succession plan are the Board of Directors, the Nomination and Remuneration Committee, which has the right to call on the support of specialist external companies, the Executive Directors currently in office and the manager of the Human Resources and Organization Department.

In normal operation, at the first meeting of each financial year, the Nomination and Remuneration Committee will present a report to the Board on the activities in the matter of the succession carried out in the previous year and give an assessment of the level of risk cover associated with the succession of executive Directors. The Board of Directors will examine and discuss the report on the succession drawn up by the Committee; it will provide information and guidance for the continuation of the activity; and report on the Succession Plan in the annual report on corporate governance and share ownership.