SEC : Corporate governance

Corporate Governance

Since September 2018 all AIM companies have been required to comply with a recognized corporategovernance code. SEC spa has chosen the Quoted Companies Alliance ("QCA") Corporate

Governance Code published in April 2018 for this purpose. High standards of corporate governance are a priority for the Board, and details of how SEC spa addresses key governance principles defined in the QCA code are set out below.

A prescribed set of rules does not itself determine good governance or stewardship of a company and, in fulfilling their responsibilities, the Directors believe that they govern the Company in the best interests of the shareholders, whilst having due regard to the interests of all the 'stakeholders' in the Group.

1. Establish a strategy and business model which promote long-term value for shareholders

The Company's business model and strategy to deliver shareholder value is set out inthe annual report (see Annual Report 2017, pag. 19-20)together with the Company's values and risk management approach (see Annual Report 2017, pag. 23-26).

The Company's vision is to invest in and develop its operating businesses to deliver long term, sustainable growth in shareholder value with particular focus on exploiting the outstanding business opportunities in the different markets where the Company has its operations.

2. Seek to understand and meet shareholder expectations

The company maintains a dedicated email address which investors can use to contact the companywhich is prominently displayed on its website together with the company's address and phonenumber. The company holds an annual general meeting to which all members are invited and during the AGM, time is set aside specifically to allow questions from attending members to any board member. As the company is too small to have a dedicated investor relations department, the CEO is responsible for reviewing all communications received from members and determining the most appropriate response. In addition to these passive measures, the CEO typically engages with members through a roadshow once or twice each year.

The company does not take any measures beyond those outlined in this paragraph to seek to understand shareholder voting decisions.

Due to the fact that SEC spa has a dominant shareholder, the Board is particularly aware of the need to hear the voices of and protect the interests of minority shareholders, balancing these interests with those of any more substantial shareholders.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

In addition to members, the company believes its main stakeholder groups are its employees and clients. The company dedicates significant time to understanding and acting on the needs and requirements of each of these groups via meetings dedicated to obtaining feedback.

With the Clients the relation is regular, in many times weekly and or daily to meet their needs and to work together in order to achieve the goals of the consultancy project.

To better dialogue with its employees, the Group has just adopted Workplace, a platform of Facebook that allows all the employees to have the possibility to share ideas, projects, best practices, best cases, case studies and so on.

The platform presents several groups: SEC EU updates, SEC New business, SEC news, SEC Marketing, SEC Management Committee (exclusively reserved to the members of the body).

With regards corporate social responsibility, SEC supports Portofranco Onlus, a non profit organization that created in Milano (and replicated in other cities in Italy) an extraordinarily effective and beautiful place for high school students to get support with studying.

Here, working and retired teachers, professionals, university students volunteer their time to help children with difficulties with individual lessons, and it is the children themselves who book the lessons and choose to come and study, with no obligation from the school or their family. Here, spontaneously, they have generated one of the most meaningful experiences in Italy, whichintegrates immigrant students of different generations. SEC's involvement will support theorganization's fundraising and the involvement of some of its directors. Moreover, from 2017 SECis partner of Valore D the first corporate association to promote women's talents, diversity andleadership in order to foster national enterprises development. SECacknowledges the association'sgoals that are:

• -to foster corporate welfare policies aiming at implementing innovative and flexible working places where personal needs are taken into account

• -taking inclusive and diversity driven strategies in

• -human resource management in order to improve on each individual know how and competence

• -to promote inclusive and balanced leadership and governance models to foster participation, collaboration and dialogue inside the organization

• -to offer sustainable and new social models aiming at orienteering girls study courses and overcoming gender based stereotypes in families and workplaces.

These principles stand strongly in our agency where a significant role is led by women employees:boththeGMandCFO,infact,arewomenaswellas7supervisorsoutof12and 7 account directors out of 9.

The different companies in each Country promote their own CSR activities.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

The board is responsible for putting in place and communicating a sound system to manage risk and implement internal control. The management of risk is an essential business practice. Boards are expected to balance risk and return, threat and opportunity. Setting strategy includes determining the extent of exposure to the critical risks the company is willing and able to bear.

The Company describes in its annual report, yearly updated, the potential risks across a number of categories including personnel, clients, competition, finance, legal and economical general frame. For each risk we estimate the impact, likelihood as well as identify mitigating strategies. This approach is reviewed yearly and published on the website (see Annual Report 2017, pag. 23 and following).

The Company receives regular feedback from its external auditors on the state of its internal controls and has established and internal audit function led by the Group Financial Director,reporting to the Chairman and Group Chief Executive Officer, to systematically review each area of its business to monitor the effectiveness of internal controls.

5. Maintain the board as a well-functioning, balanced team led by the chair

The board of SEC spa currently comprises three non executive directors, one of them being the Chairman.

The board meets monthly (except August) and all current board members have attended all board meetings in the current financial year. Each director or non-executive may be re-elected to the board by Annual General Meeting every three years.

Non-executive contracts require that they dedicate up to one additional day per month on request. The Company notes that best practice under the QCA code is to have at least two non executive independent directors and at the moment the company has three independent members and for now the board considers its composition appropriate given the size of the company, its revenues and profitability.

The three non executive directors are Luigi Roth, David Mathewson and Paola Bruno (see in Annual Report 2017, pag. 22 and in the website the full CV:https://www.secglobalnetwork.com/investors/) In addition, the Company notes that its Chairman Luigi Roth has a large experience in chairing listed companies and the two other independent directors as well, David Mathewson and Paola Bruno. The Company is satisfied as to their independence.

6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The directors of the Company during the current financial year, together with their experience, skillsand personal qualities relevant to the Company's business is outlined below:

Luigi Piergiuseppe Ferdinando Roth-Indipendent, Non-Executive Chairman.Luigi Roth was appointed to the Board as its Non-Executive Chairman in June 2016. He has significant board experience and his current roles include being President of Alba Leasing S.p.A. (since May 2012), Senior Advisor of Equita SIM S.p.A. (since October 2014), President of Italiana Valorizzazioni Immobiliari S.r.l. (since September 2013) and President of Melior Valorizzazioni Immobiliari S.r.l. (since June 2010), President of Gruppo Lombardo dei Cavalieri del Lavoro (since September 2013) and he holds positions on the boards of Pirelli & C. S.p.A., Autostrada Torino Milano S.p.A., Eurovita Assicurazioni S.p.A. and NTV S.p.A. Noteworthy previous experience includes roles as President of Terna S.p.A., Consorzio Città della Salute e della Ricerca di Milano, Fondazione Fiera Milano and Ferrovie Nord Milano Esercizio S.p.A., as 13well as various positions held on the boards of Meliorbanca, Cassa Depositi e Prestiti S.p.A., Ansaldo Trasporti S.p.A. and Breda Costruzioni Ferroviarie S.p.A. Luigi Roth is also a Knight Grand Cross of Merit of the Italian Republic, Knight of Labour and a Papal Gentleman.

Fiorenzo Vittorio Tagliabue-Chief Executive Officer.Fiorenzo Tagliabue is the founder and controlling shareholder of SEC. He has significant expertise in urban regeneration projects, such as Porta Nuova in Milan (for Hines Group), regeneration of the Fiera di Milano area (for Citylife and Generali-Allianz Group), development plan for Bovisa (for Euromilano) and construction of Fiera in Rho-Pero (for Fiera Milano Foundation). He was the CEO of Nuova Editoriale Italiana S.p.A. from

1983 to 1989 and, in 1985, he founded and became General Secretary for the first three years of Centro Televisivo Vaticano. Mr Tagliabue was a member of the Board of Directors of Teatro La Scala (Milan) Foundation from 2005 until January 2015 and is a member of the board of directors of Banco Alimentare Foundation and of Venice University Institute of Architecture.

Cesare Valli-Chief Operating Officer.Cesare Valli was appointed to the Board in July 2015 and has extensive expertise in managing integrated communication projects as well as corporate and product communication campaigns. His experience in the financial sector includes the first privatization campaign ever carried out in Italy, five major privatizations, more than 20 IPOs, M&A, litigation, restructuring and change management plans for large banks and associations. Mr Valli worked for Hill & Knowlton Strategies, Inc. from 1988 to 2015, where he rose through the roles of Strategy Director Europe, President and CEO for Southern Europe and Italy, President and CEO Mediterranean and Eastern Europe and Italy and was a member of the Company Global Council. He was also President of Italian Public Relation Association from 1994 to 1998 and Vice President of Assocomunicazione from 2005 to 2008. Mr Valli is a former Professor on theory and techniques ofimage promotion at University of Siena and Professor at CUOA Master in Vicenza and at Ca' Foscari

University in Venice. Mr Valli is responsible for the day-to-day running of SEC's Italian operations.

Mark Glover-Managing Director (also Chief Operating Officer at Newington).Mark founded Newington in 2006, and has overseen its growth into the dynamic and award winning consultancy that it istoday. He splits his time between Newington's London and Edinburgh offices -offering strategic counsel to board directors across a range of sectors at a local, devolved and national government level. Mark has been actively involved in politics since 1985-as a councillor for twelve years, which included serving as the Chair of the Labour Group in Southwark (2002-2014), London and sitting on the Federal Executive of the Liberal Democrats in the early 1990s. Mark also sits on the Independent Advisory Group of the Marston Group, is on the Court of the Company of PR Practitioners in the City of London. He was a Founding Director of the Reformer magazine, supports charity UK Youth and is a regular industry awards judge.

Thomas Edward Parker-Chief Sales Officer (also Chief Executive Officer of Cambre Associates-Brussels).Tom Parker co-founded Cambre Associates SA in 2013, based in Brussels, and was appointed to the Board in June 2016. Mr Parker was the Managing Director at Interel PR & PA from 2006 to 2007 and the Managing Director of Interel Cabinet Stewart in 2008. Mr Parker is the Vice President of the British Chamber of Commerce in Brussels. He is also a regular commentator on EU lobbying practice and the future of the advocacy profession. Mr Parker works with organizations at the highest levels across a wide range of sectors, counselling on EU affairs and pan-Europeanadvocacy campaigns and has advised on some of Europe's highest profile reputational challengesand counselled on issues management and crisis communication at European and global levels. Mr Parker is also on the boards of the SEC subsidiaries Kohl PR and ACH Cambre.

David Carr Mathewson-Indipendent, Non-Executive Director.David Mathewson was appointed to the Board in June 2016. Mr Mathewson has experience in advising private and public companies on strategy plus implementation of mergers, acquisitions, debt and equity fund raising and capital reconstructions. Mr Mathewson has spent much of his Executive career as Senior Director of Noble Grossart Ltd. More recently, Mr Mathewson was Finance Director of Playtech plc, between 2010 and 2013, which moved from AIM to the main market during his tenure. Prior to being Finance Director, he was a Non-Executive Director and chaired the audit and risk committees of Playtech plc. Mr Mathewson is a member of the Institute of Chartered Accountants of Scotland.

Paola Bruno-Indipendent, Non - Executive Director.Founder and Managing Director of Augmented Finance Ltd. Advisory company based in London and specialised in M&A, financial and corporate advisory for financial institutions, investment funds and European/North America industrial and tech companies. Independent Director, Chairman of Control and risk committee, member of RemCo and Related Party Committee in Alerion Clean Power SpA. Director and Member of the Risk Committee and Related Party Commitee in doBank S.p.A.

Anna Milito-Chief Financial Officer.She joined SEC in 2003 and since has worked in the administrative team, becoming Chief Financial Officer in 2014. Her role includes coordinating a team composed of seven finance and administration professionals. Prior to joining SEC, Mrs Milito worked for an Italian accountancy firm from 1998-1999 and from 2000-2002 she was consultant to a provincial consortium on regional, national and communitarian financing laws for enterprises in Parma. Mrs Milito has a degree in Business Economics from the University of Parma and is a chartered accountant.

The board provides to the Company a set of skills and competences that enable it to tackle the challenges of the market.

The COO and the CFO, together with the CEO, have the know how and skills to feed the Board with all the needed financial information allowing the management of the Company and its development to be fully aware of the potential opportunities and risks.

The CEO manages and updates the vision and the strategy of the Group working on its expansion (both organic and through acquisitions), taking care of the main partners of the Group, namely the managing directors of the subsidiaries operating in the different countries. Three main figures support in this task: Tom Parker who is the Chairmasn of the Management Committee, the body that gathers all the first line managers of each international company, Cesare Valli, the COO, who has a consolidated experience in managing companies in this industry and Mark Glover, whose contribution is key in assessing the strategy of the Group.

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The current Board of the Company has been nominated two years ago, in the occasion of the listing of the Company, and the evaluation of its performance is a topic that the Board will start to discuss during the next fiscal year which will be the last of this first mandate.

Though, given the size and total amount turnover of the Company, the board evaluation scheme will be implemented in an informal manner. The board will formally submit a plan for its evaluation to the General Assembly which will be summoned to approve 2018 balance sheet. The process and its results and recommendations will be published at a future date.

On an ongoing basis, board members maintain a watching brief to identify relevant internal and external candidates who may be suitable additions to or backup for current board members, however the directors consider that the Company is too small to have either an internal succession plan and that it would not be cost effective to maintain an external candidate list prior to the need arising.