**7. Risk of overlapping and possible remedies**

To be efficient and effective, the system of controls and their distribution among the various players that make it up, with different roles, functions and responsibilities, must necessarily reduce areas of overlaps and systematically structure the methods of interaction between the various players involved. The control functions can be described by identifying three different levels of subdivision:

1.*First level controls* – these manage and define the "line" controls of the operational processes, i.e. the checks carried out both by those who perform a given activity, and by those who have direct supervisory responsibility for it: in other words, these are the analytical accounting, management, budgeting, planning

and reporting systems that allow the administration and control of the business activities;


It is precisely on the latter that the activities of the parties mentioned in the previous paragraphs are concentrated. Polycentric control systems, like those described, present areas for improvement, but overlapping is a risk that, like other risks, must be monitored, can be reduced and, in some cases, can be an opportunity. This objective can and must be pursued by means of instruments necessarily operating *ex-ante* and involving all the bodies involved, which are asked to pay specific attention and be aware of potential issues and of the need/opportunity to manage them.

The following tools can be used:


As far as control roles and functions are concerned, integration can only be achieved with the establishment of procedures that facilitate an in-depth exchange of information between the various players and the planning of an integrated activities plan. The text of 2020 Italian Corporate Governance Code is also working in this direction, taking an important step forward. On the one hand, the document stresses the centrality of the Board of Directors as the entity responsible for the internal control and risk management system. On the other hand, it goes further by recognising the need for structured coordination between the various parties involved to avoid inefficiencies and duplications. This implies to formulate and set up procedures that allow periodic and systematic exchanges of information among all the parties involved in various capacities and tasks in the system.

Recommendation included in the 2020 Italian Corporate Governance Code for listed companies and those aiming to be listed represent a relevant benchmark for all companies, regardless of their size, called to comply in the next future with the IC-Code.
