Leonardo S p A : Corporate Governance Report 2024

CORPORATE GOVERNANCE REPORT

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REPORT ON CORPORATE GOVERNANCE AND SHAREHOLDER STRUCTURE

2023 FINANCIAL YEAR

12 MARCH 2024

LEONARDO - Società per azioni

Registered office in Rome, Piazza Monte Grappa n. 4 [e-mail]

Fully paid-up share capital of Euro 2,543,861,738.00

Registered in Rome, Register no. and Tax Ref. 00401990585

VAT no. 00881841001

www.leonardo.com

Disclaimer

This Report has been translated into English solely for the convenience of the international reader. In the event of conflict or inconsistency between the terms used in the Italian version of the Report and the English version, the Italian version shall prevail, as the Italian version constitutes the sole official document.

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	CONTENTS
OUR GOVERNANCE AT A GLANCE	...................................................................................................9
INTRODUCTION	11
1. LEONARDO PROFILE	11
Company Organization	12
Objectives and corporate mission	13
Sustainability Governance	15

INFORMATION ON THE SHAREHOLDER STRUCTURE

2. INFORMATION ABOUT THE SHAREHOLDER STRUCTURE AT 11 MARCH 2023 (ART. 123-BIS,

	PARA. 1, TUF)	21
A)	STRUCTURE OF THE SHARE CAPITAL (ART. 123-BIS,PARA. 1, LETT. A), TUF)	21
B)	RESTRICTIONS ON SHARE TRANSFER (ART. 123-BIS,PARA. 1, LETT. B), TUF))	21
C)	MATERIAL SHAREHOLDINGS IN THE SHARE CAPITAL (ART. 123-BIS, PARA. 1, LETT. C), TUF)	22
D)	HOLDERS OF SECURITIES THAT CONFER SPECIAL CONTROL RIGHTS (ART. 123-BIS, PARA. 1, LETT. D),
	TUF)	22
D.1)	SPECIAL POWERS OF THE GOVERNMENT	22
E)	EMPLOYEE SHAREHOLDING: VOTING MECHANISM (ART. 123-BIS, PARA.1, LETT. E), TUF)	24
F)	VOTING RESTRICTIONS (ART. 123-BIS,PARA. 1, LETT. F), TUF)	24
G)	SHAREHOLDERS' AGREEMENTS (ART. 123-BIS,PARA. 1, LETT. G), TUF)	24
H)	CLAUSES ON CHANGE OF CONTROL (ART. 123-BIS PARA. 1, LETT. H), TUF) AND BY-LAWS
	PROVISIONS CONCERNING TAKEOVER BIDS (ARTS. 104, PARA. 1-TER AND 104-BIS, PARA. 1, TUF)..	24
I)	COMPENSATION FOR DIRECTORS IN CASE OF RESIGNATION OR DISMISSAL WITHOUT JUST CAUSE OR
	TERMINATION OF EMPLOYMENT FOLLOWING A TAKEOVER BID (ART. 123-BIS, PARA. 1, LETT. I), TUF)43
L)	LAWS GOVERNING THE APPOINTMENT AND REPLACEMENT OF DIRECTORS AND AMENDMENTS TO THE
	BY-LAWS (ART. 123-BIS,PARA. 1, LETT. L), TUF)	43

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M)	AUTHORISATION FOR SHARE CAPITAL INCREASE AND AUTHORISATION TO PURCHASE TREASURY
	SHARES (ART. 123-BIS,PARA. 1, LETT. M), TUF)	43
N)	DIRECTION AND COORDINATION	44
CORPORATE GOVERNANCE INFORMATION
3.	COMPLIANCE (ART. 123-BIS,PARA. 2, LETT. A), FIRST PART, TUF)	46
4.	BOARD OF DIRECTORS	47
4.1.	ROLE OF THE BOARD OF DIRECTORS	47
4.2.	APPOINTMENT AND REPLACEMENT (ART. 123-BIS,PARA. 1, LETT. L), TUF)	51
4.3.	COMPOSITION (ART. 123-BIS,PARA. 2, LETT. D), TUF)	54
	Guidelines on Directors' Overboarding	55
4.4.	FUNCTIONING (ART. 123-BIS,PARAGRAPH 2, LETT. D), TUF)	57
	Management of information to the Board of Directors	57
	Meetings	59
4.5.	ROLE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS	61
	Board Induction	62
	Secretary of the Board of Directors	62
4.6.	EXECUTIVE DIRECTORS	63
	Chief Executive Officer	63
	Information provided by the Chief Executive Officer to the Board of Directors	63
	Other Executive Directors	64
4.7.	INDEPENDENT DIRECTORS AND LEAD INDEPENDENT DIRECTOR	64
	Independence assessment	64
	Meetings of Independent Directors	66
	Lead Independent Director	67
4.8.	CORPORATE INFORMATION MANAGEMENT	68

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	Inside Information	68
	Code of Internal Dealing	69
4.9.	DIRECTORS' INTERESTS AND TRANSACTIONS WITH RELATED PARTIES	70
5.	INTERNAL BOARD COMMITTEES (ART. 123-BIS,PARA. 2, LETT. D), TUF)	72

6. NOMINATION AND GOVERNANCE COMMITTEE - SELF-EVALUATION AND SUCCESSION OF DIRECTORS73

6.1.	NOMINATION AND GOVERNANCE COMMITTEE	73
6.2.	SELF-EVALUATIONAND SUCCESSION OF DIRECTORS	78
	Board evaluation	78
	Succession plans	81
7.	SUSTAINABILITY AND INNOVATION COMMITTEE	82
8.	REMUNERATION COMMITTEE - REMUNERATION OF DIRECTORS AND TOP MANAGEMENT	86
8.1.	REMUNERATION COMMITTEE	86
8.2.	REMUNERATION OF THE DIRECTORS AND OF THE TOP MANAGEMENT	90
	Remuneration policy	90
	Share-based remuneration plans	91
	Remuneration of Executive Directors and the Top Management	91
	Remuneration of Non-executive Directors	92
	Accrual and payment of fees	92
	Indemnity due to Directors in case of resignation, dismissal without cause or termination of
	employment following a takeover bid (under Art. 123-bis, para. 1, lett. i), TUF)	93
9.	CONTROL AND RISKS COMMITTEE	93
10.	INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM	99

10.1. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM RELATED TO THE PROCESS OF FINANCIAL

REPORTING (ART. 123-BIS, PARA. 2, LETT. B), TUF)	101
10.2. CHIEF EXECUTIVE OFFICER	105
10.3. CHIEF AUDIT EXECUTIVE	107

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10.4. ORGANIZATIONAL MODEL AS PER LEGISLATIVE DECREE 231/2001	109
10.5. EXTERNAL CONTROLS	110
Independent Auditing Firm	110
Audit of the Court of Auditors	111

10.6. OFFICER IN CHARGE OF FINANCIAL REPORTING AND OTHER CORPORATE ROLES AND ORGANIZATIONAL

UNITS

111

10.7. COORDINATION BETWEEN PERSONS INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT

	SYSTEM	114
11.	BOARD OF STATUTORY AUDITORS	115
11.1. APPOINTMENT AND REPLACEMENT	115
11.2. COMPOSITION AND FUNCTIONING (ART. 123-BIS,PARA.2, LETT. D), TUF)	117
	Independence	119
	Duties	119
	Meetings	121
	Remuneration	122
	Conflict of interest management	123
	Self-evaluation	123
12.	DIVERSITY CRITERIA AND POLICIES (ART. 123-BIS,PARA. 2, LETT. D-BIS), TUF)	124
	Board of Directors	125
	Board of Statutory Auditors	128
	Gender Equality	129
13.	INVESTOR RELATIONS	132
	Financial Disclosure	132
	Credit Rating Agencies	133
	Shareholder Engagement - Engagement Policy	133
14.	SHAREHOLDERS' MEETINGS (ART. 123-BIS,PARA. 2, LETT. C), TUF)	136

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Notice of call and disclosures to Shareholders	136
Functioning of the Shareholders' Meeting	138
Right of attendance and voting at the Shareholders' Meeting	139
2023 Meeting	140

15. ADDITIONAL CORPORATE GOVERNANCE PRACTICES (ART. 123-BIS, PARA. 2, LETT. A), 2ND PART,

TUF)

141

16. CONSIDERATIONS ON THE CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE'S LETTER OF

14 DECEMBER 2023	146
ANNEX
ANNEX 1: CURRICULA OF THE DIRECTORS	148
ANNEX 2: CURRICULA OF STATUTORY AUDITORS	158
APPENDIX
TABLE 1: INFORMATION ON THE SHAREHOLDER STRUCTURE AT 11 MARCH 2024	165
TABLE 2: STRUCTURE OF THE BOARD OF DIRECTORS	166
TABLE 3: STRUCTURE OF THE BOARD COMMITTEES	167
TABLE 4: DIRECTORS WHO CEASED TO HOLD OFFICE IN FINANCIAL YEAR 2023	168
TABLE 5: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS	169

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OUR GOVERNANCE AT A GLANCE

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LEONARDO'S SHAREHOLDERS - FEBRUARY 2024

0,5%

19,0%

30,2%

50,3%

Ministry of Economy and Finance

Institutional

Retail

Treasury shares

32%

68%

PRI Other

PRI Investors are investors who are signatories of the Principles for Responsible Investment (PRI).

The percentage represented is linked only to Leonardo's institutional investors

6,9%

7,2%

4,4%

6,5%

57,2%

17,8%

North America

United Kingdom

France

Italy

Rest of Europe

Rest of the World

The represented geographical breakdown is linked only to Leonardo's institutional investors

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