Piaggio & C : Report on Corporate Governance and Corporate ownership

REPORT

ON CORPORATE GOVERNANCE AND CORPORATE OWNERSHIP

pursuant to Article 123 bis of the Consolidated Law on Finance

(Traditional management and control model)

Issuer: Piaggio & C. S.p.A.

Website: www.piaggiogroup.com

Financial year to which the Report refers: 2021

Report approval date: 2 March 2022

CONTENTS

GLOSSARY...........................................................................................................................................................................................................	3
1. ISSUER PROFILE............................................................................................................................................................................................	6
2. INFORMATION ON CORPORATE OWNERSHIP (PURSUANT TO ARTICLE 123-BIS
OF THE CONSOLIDATED LAW ON FINANCE) AS AT 31/12/2021................................................................................................	7
A) STRUCTURE OF SHARE CAPITAL (ARTICLE 123-BIS, SECTION 1,
	LETTER A) OF THE CONSOLIDATED LAW ON FINANCE)..............................................................................................	7
B)	RESTRICTIONS ON THE TRANSFER OF SECURITIES (ARTICLE 123-BIS,
	PARAGRAPH 1, LETTER B) OF THE CONSOLIDATED LAW ON FINANCE)................................................................	7
C)	SIGNIFICANT INVESTMENTS IN CAPITAL (ARTICLE 123-BIS, SECTION 1,
	LETTER C) OF THE CONSOLIDATED LAW ON FINANCE).............................................................................................	7

1. SECURITIES THAT GRANT SPECIAL RIGHTS (ARTICLE 123-BIS, PARAGRAPH 1,

	LETTER D) OF THE CONSOLIDATED LAW ON FINANCE).............................................................................................	8
E)	EMPLOYEE SHARE OWNERSHIP: EXERCISING OF VOTING RIGHTS
	(ARTICLE 123-BIS, PARAGRAPH 1, LETTER E) OF THE CONSOLIDATED LAW ON FINANCE)..........................	8
F)	RESTRICTIONS ON VOTING RIGHTS (ARTICLE 123-BIS, PARAGRAPH 1, LETTER F)
	OF THE CONSOLIDATED LAW ON FINANCE)..................................................................................................................	8

1. SHAREHOLDER AGREEMENTS (ARTICLE 123-BIS, SECTION 1, LETTER G)

OF THE CONSOLIDATED LAW ON FINANCE)...................................................................................................................

8

1. CLAUSES OF CHANGE OF CONTROL (PURSUANT TO ARTICLE 123-BIS, PARAGRAPH 1, LETTER H) OF THE CONSOLIDATED LAW ON FINANCE) AND STATUTORY PROVISIONS CONCERNING IPOS (ARTICLE 104, PARAGRAPH 1-TER, AND 104-BIS,

PARAGRAPH 1 OF THE CONSOLIDATED LAW ON FINANCE).....................................................................................

8

1. AUTHORITY TO INCREASE THE SHARE CAPITAL AND AUTHORISATION TO PURCHASE

	OWN SHARES (ARTICLE 123-BIS, SECTION 1, LETTER M) OF THE CONSOLIDATED LAW
	ON FINANCE).................................................................................................................................................................................	9
L)	MANAGEMENT AND COORDINATION ACTIVITIES
	(PURSUANT TO ARTICLE 2497 ET SEQ. OF THE ITALIAN CIVIL CODE).................................................................	10
3. COMPLIANCE...............................................................................................................................................................................................	11
4. BOARD OF DIRECTORS............................................................................................................................................................................	11
4.1.	ROLE OF THE BOARD OF DIRECTORS (PURSUANT TO ARTICLE 123-BIS,
	PARAGRAPH 2, LETTER D), OF THE CONSOLIDATED LAW ON FINANCE)............................................................	11

4.2 APPOINTMENT AND REPLACEMENT OF DIRECTORS (PURSUANT TO ARTICLE 123-BIS,

	PARAGRAPH 1, LETTER L), OF THE CONSOLIDATED LAW ON FINANCE).............................................................	13
4.3.	COMPOSITION (AS PER ARTICLE 123-BIS, PARAGRAPH 2, LETTER D) AND D-BIS,
	CONSOLIDATED LAW ON FINANCE)...................................................................................................................................	16
4.4.	OPERATION OF THE BOARD OF DIRECTORS (PURSUANT TO ARTICLE 123-BIS,
	SECTION 2, LETTER D), CONSOLIDATED LAW ON FINANCE)...................................................................................	21
4.5.	ROLE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS (PURSUANT TO ARTICLE 123-BIS,
	PARAGRAPH 2, LETTER D) OF THE CONSOLIDATED LAW ON FINANCE)...........................................................	22
4.6.	EXECUTIVE DIRECTORS............................................................................................................................................................	24
4.7.	INDEPENDENT DIRECTORS AND LEAD INDEPENDENT DIRECTOR........................................................................	25
5. MANAGEMENT OF CORPORATE INFORMATION........................................................................................................................	28
5.1.	PROCEDURE FOR THE DISCLOSURE OF INSIDE INFORMATION..............................................................................	28

5.2. PROCEDURE FOR MANAGEMENT OF THE REGISTER OF PERSONS WHO HAVE

ACCESS TO INSIDE INFORMATION......................................................................................................................................	28
5.3. PROCEDURE FOR THE FULFILMENT OF INTERNAL DEALING OBLIGATIONS.....................................................	29

6. COMMITTEES WITHIN THE BOARD (PURSUANT TO ARTICLE 123-BIS, PARAGRAPH 2, LIT. D),
CONSOLIDATED LAW ON FINANCE)................................................................................................................................................	30
7. SELF-ASSESSMENT AND DIRECTORS' SUCCESSION - APPOINTMENT PROPOSAL COMMITTE............................	32
7.1	SELF-ASSESSMENT AND DIRECTORS' SUCCESSION....................................................................................................	32
7.2	APPOINTMENT PROPOSALS COMMITTEE.......................................................................................................................	33
8.REMUNERATION OF DIRECTORS - REMUNERATION COMMITTEE.....................................................................................	34
8.1	REMUNERATION OF DIRECTORS..........................................................................................................................................	34
8.2	REMUNERATION COMMITTEE..............................................................................................................................................	34
9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM.....................................................................................................	36
9.1	CHIEF EXECUTIVE OFFICER.....................................................................................................................................................	37
9.2	INTERNAL CONTROL, RISK MANAGEMENT AND SUSTAINABILITY COMMITTEE..........................................	37
9.3	HEAD OF THE INTERNAL AUDITOR FUNCTION.............................................................................................................	39
9.4	ORGANISATIONAL MODEL PURSUANT TO LEGISLATIVE DECREE 231/2001...................................................	40
9.5	INDEPENDENT AUDITORS.......................................................................................................................................................	42

9.6 EXECUTIVE IN CHARGE OF FINANCIAL REPORTING AND OTHER CORPORATE ROLES

AND FUNCTIONS........................................................................................................................................................................

42

9.7 COORDINATION BETWEEN PERSONS INVOLVED IN THE INTERNAL CONTROL

AND RISK MANAGEMENT SYSTEM....................................................................................................................................

43

9.8 MAIN CHARACTERISTICS OF THE RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

	IN RELATION TO THE FINANCIAL DISCLOSURE PROCESS (ARTICLE 123-BIS, SECTION 2,
	LETTER B), OF THE CONSOLIDATED LAW ON FINANCE)...........................................................................................	43
10. INTERESTS OF DIRECTORS AND TRANSACTIONS WITH RELATED PARTIES...............................................................	47
11. BOARD OF STATUTORY AUDITORS.................................................................................................................................................	50
11.1	APPOINTMENT AND REPLACEMENT OF STATUTORY AUDITORS.........................................................................	50
11.2	COMPOSITION AND OPERATION OF THE BOARD OF STATUTORY AUDITORS
	(PURSUANT TO ARTICLE 123-BIS, PARAGRAPH 2, LETTERS D) AND D-BIS
	OF THE CONSOLIDATED LAW ON FINANCE)..................................................................................................................	51
12. RELATIONSHIPS WITH SHAREHOLDERS......................................................................................................................................	55
13. GENERAL MEETINGS (PURSUANT TO ARTICLE 123- BIS, PARAGRAPH 2, LIT. C),
CONSOLIDATED LAW ON FINANCE)...............................................................................................................................................	57
14. ADDITIONAL CORPORATE GOVERNANCE PRACTICES (PURSUANT TO ARTICLE 123-BIS,
PARAGRAPH 2, LETTER A), OF THE CONSOLIDATED LAW ON FINANCE)......................................................................	59
15 CHANGES AFTER THE APPLICABLE BALANCE SHEET DATE..................................................................................................	59
16 COMMENTS ON THE LETTER FROM THE CHAIRMAN
OF THE CORPORATE GOVERNANCE COMMITTEE....................................................................................................................	59
ANNEX 1	.............................................................................................................................................................................................................	62

GLOSSARY

Shareholders' Meeting: Shareholders' Meeting of the Issuer.

Italian Stock Exchange: Borsa Italiana S.p.A.

Corporate Governance Code/ CG Code: approved by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., in January 2020, available at the address www.borsaitaliana.it. applicable as from 1 January 2021.

Italian Civil Code: the civil code.

Committee/CG Committee/Corporate Governance Committee: the Italian Committee for the Corporate Governance of listed companies, promoted by Borsa Italiana S.p.A. and by ABI, Ania, Assogestioni, Assonime and Confindustria

Board/Board of Directors: the Issuer's Board of Directors.

Board of Statutory Auditors: the Board of Statutory Auditors of the Issuer.

Date of the Report: the approval date of this Report by the Board of Directors of Piaggio.

Issuer/Company/Piaggio: the Issuer of the listed shares to which the Report refers.

Financial year: the financial year to which the Report refers.

Group: the group of companies of which the Issuer is the Parent.

Instructions to the Stock Exchange Regulations: the instructions to the Regulations on Markets organised and managed by Borsa Italiana S.p.A.

Stock Exchange Regulations: the Regulations on Markets organised and managed by Borsa Italiana S.p.A..

CONSOB Regulation on Issuers: the Regulations issued by CONSOB by Resolution no. 11971 of 1999 (as amended) concerning Issuers.

CONSOB Regulations on Markets: the Regulations issued by CONSOB by Resolution no. 20249 of 2017 (as amended) concerning markets.

Related Parties Regulations: the regulations issued by CONSOB with Resolution no. 17221 of 12 March 2010 (as amended) concerning transactions with related parties.

Report: this report on corporate governance and ownership structures drawn up by Piaggio pursuant to Article 123- bis of the Consolidated Law on Finance referred to the financial year.

Remuneration Report: the "Report on remuneration policy and compensation paid" prepared pursuant to Article 123-ter of the Consolidated Law on Finance and Article 84-quater of the CONSOB Regulation on Issuers, available in accordance with law at the registered office, on the website of the issuer at www.piaggiogroup.com and in the authorised storage mechanism "eMarket Storage" available at www.emarketstorage.com.

3	PIAGGIO & C. S.P.A.