Corporate governance
3.2.2

Board of Directors

Role of the Board of Directors

The Board of Directors handles overall management of the Company’s operations and is vital element of the corporate governance system of OAO IDGC of Urals. Its competence is defined in the Charter (clause 15.1 Article15) and is clearly demarcated from the purview of executive bodies that manage Company’s day-to-day operations. The Board of Directors’ expertise comprises issues stipulated by the Federal Joint-Stock Companies’ Law as well as a wide range of additional issues in the spheres of:

  • Finance and investments,
  • Business planning,
  • Procurements,
  • Management of affiliates and associates in terms of core operational issues
  • Internal control, risk management and internal audit.

The Board of Directors’ Chair

The Chair of the Board of Directors bears personal responsibility for leading the activities of the Board of Directors and its performance. The Chair keeps the focus of the Board of Directors on strategic management of the Company delegating operational control to the executive team. The Chair oversees that the Board of Directors receives accurate, reliable and relevant information in a timely manner to foster a substantive discussion of issues. The Chair fosters constructive interaction among the members of the Board of Directors and between the Board of Directors and Executive Board.

In December 2016 – September 2017 Sergey Aleksandrovich Semerikov headed the Board of Directors. Since September 2017 the Board of Directors is chaired by Aleksandr Nikolaevich Fadeev.

Independent Directors and Their Role 4

The independent directors provide an independent perspective to the work of the Board of Directors, through their knowledge, experience and qualifications. The independent directors demonstrate a high level of expertise, independent judgment and independent votes on agenda items. The objectivity of the independent directors and their constructive criticism are of great value to the Board of Directors and Company on the whole. The Company highly values the significant contribution that the independent directors make to improve the performance of the Board of Directors. To foster objectivity of resolutions and balance interests of various stockholder groups the Company strives to have at least three independent directors in the Board of Directors.

Corporate Secretary

To embed key elements and provisions of the Corporate Governance Code into the corporate governance system of OAO IDGC of Urals a position of the Corporate Secretary was introduced to our payroll schedule in 2016. The status of the corporate secretary, candidate specification, appointment and removal of the corporate secretary, reporting line, order of interaction with the governing bodies and units of the Company and other relevant activities are defined in the Regulations on the Corporate Secretary of OAO IDGC of Urals[59] 5. The Corporate Secretary of the Board of Directors is appointed by the Board of Directors as advised by the Chair of the Board of Directors.

The Regulations stipulate the following functions of the Corporate Secretary:

  • Facilitation of Company’s cooperation with regulators, trading institutions, registrar, other professional participants of the securities market;
  • Involvement into arrangement and conduct of Company’s general meetings of stockholders;
  • Involvement into promotion of the Company’s information disclosure policy and oversight of custody of Company’s corporate documents;
  • Involvement into improvement of Company’s corporate governance system and practices;
  • Administration of day-to-day performance of the Board of Directors;
  • Facilitation of Company’s relationships with stockholders, prevention of corporate conflicts, implementation of procedures enforcing rights and interests of stockholders, set forth by the Russian laws and Company’s bylaws, oversight of the progress.
The Corporate Secretary of OAO IDGC of Urals is Sergey Anatolyevich Gusak.
...

Sergey Anatolyevich Gusak

  • Background information: Born in 1977
  • Educational background: Urals State Law Academy (graduate degree).
  • Since 2008 – Head of Corporate Governance and Stockholder Relations Department at OAO IDGC of Urals.
  • Share in the charter capital of the Company and its SACs / common stock owned: none. Family ties with members of executive and/or oversight bodies: none.

Composition of the Board of Directors

Clause 16.1 Article 16 of the Company’s Charter states that the Board of Directors consists of 11 directors. The quantitative composition perfectly matches the goals and objectives of the Company and industry practices and secures a required balance of purviews of the Board of Directors.

The specificity of the structure of shareholder capital (Rosseti owns 51.52% of the voting power) explains the fact that the vast majority of the Board of Directors is elected as advised by the controlling stockholder – PAO Rosseti. 11-director composition of the Board of Directors comprises eight non-executive directors (representatives of the controlling stockholder), two independent directors and one executive director.

Taking into account the strategic importance of the challenges facing the Board of Directors, the Board members must have the confidence of stockholders and ensure that duties entrusted to them are performed in the most efficient manner possible. The existing structure of the Board of Directors fosters appropriate level of independence from the Company’s management to oversee the latter’s work in the proper way.

OAO IDGC of Urals has a transparent procedure for electing members of the Board of Directors, specifically:

  • The Company provides stockholders with two months to promote nominees to the Board of Directors, while laws stipulate one month;
  • The Company shares information regarding nominees to the Board of Directors with stakeholders in a timely manner (immediately after minutes of a Board of Directors meeting to examine the item are prepared) by disclosing a relevant corporate event/action newsletter (detailed information on nominees is posted on the Company’s web-site in materials to a General Meeting with “Election of the Board of Directors” item on the agenda);
  • The Company employs the principle of cumulative voting to elect the Board of Directors and explains its procedures;
  • The Company announces the voting results on the issues examined, with presence of quorum and number of votes for each voting alternative disclosed;
  • The Company posts minutes of the general meetings of stockholders on its official web-site.

The list of directors serving on the Company’s Board of Directors in 2017 and now (prior to the report adoption date) is as follows:

Name Short biography6 Interest/Common stock owned 2016-2017 Security transaction statements Composition No. 1
(06.06.2016 – 05.06.2017) [60]
Composition No. 2
(05.06.2017 – 14.09.2017) [61]
Composition No. 3
(14.09.2017 – present day) [62]
Aleksandr Nikolaevich FADEEV
  • Born in 1949
  • Educational background: Moscow Institute of Geodesy, Aerial Photography and Cartography Engineers (graduate degree).
  • PAO Rosseti’s Chief Advisor.
0 No statements filed
Sergey Georgievich DREGVAL
  • Born in 1971
  • Educational background: Kiev International Civil Aviation University, Tyumen State Oil&Gas University (graduate degrees).
  • OAO IDGC of Urals’ General Director.
0 No statements filed
Yuri Vladimirovich GONCHAROV
  • Born in 1977
  • Educational background: Moscow State Mining University (graduate degree).
  • PAO Rosseti’s Deputy General Director for Corporate Governance.
0 No statements filed
Yulia Vitalyevna YASCHERITSYNA
  • Born in 1978
  • Educational background: Moscow State Institute of Economy and Statistics (graduate degree).
  • PAO Rosseti’s Director of Economic Planning and Budgeting Department.
0 No statements filed
Natalya Aleksandrovna OZHE
  • Born in 1974
  • Educational background: Lomonosov Moscow State University (graduate degree).
  • Project director at AO GK Renova in 2012-2015,
  • AO Gazeks’ Deputy General Director for Legal and Corporate Affairs.
0 No statements filed
Yakov Savelyevich TESIS
  • Born in 1974
  • Educational background: Lomonosov Moscow State University (graduate degree).
  • Project director at AO GK Renova in 2012-2016. OOO Renova Aktiv’s M&A and Project Director
0 No statements filed
Sergey Aleksandrovich SEMERIKOV
  • Born in 1979
  • Educational background: Urals State Technical University – UPI (graduate degree).
  • PAO Rosseti’s Chief Advisor.
0 No statements filed
Vladimir Vladimirovich SOFYIN
  • Born in 1969
  • Educational background: Urals State Technical University – UPI (graduate degree).
  • PAO Rosseti’s Director of Technological Development and Innovations Department.
0 No statements filed
Aleksandr Viktorovich SHEVCHUK
  • Born in 1983
  • Educational background: Finance Academy under the Government of the Russian Federation (graduate degree).
  • Association of Professional Investors’ Executive Director.
0 No statements filed
Roman Avgustovich DMITRIK
  • Born in 1971
  • Educational background: Perm State Technical University, Perm State University (graduate degree).
  • OOO Regional Distribution Grid Company’s General Director.
0 No statements filed
Aleksey Yuryevich SEROV
  • Born in 1979
  • Educational background: Lomonosov Moscow State University, Russian School of Economics (graduate degree).
  • PAO Rosseti’s Finance Department Director.
0 No statements filed
Denis Viktorovich KULIKOV
  • Born in 1975
  • Educational background: Moscow State Law Academy (graduate degree).
  • Association of Professional Investors’ Advisor to Executive Director.
0.002%, 2,000,000 No statements filed
Pavel Nikolayevich SNIKKARS
  • Born in 1978
  • Educational background: Siberia Academy of Civil Service, Siberia University of Consumer’s Cooperation (graduate degrees), Candidate of Economic Sciences.
  • Russian Ministry of Energy’s Director of Energy Sector Development Department.
0 No statements filed

Board of Directors’ Progress Report

In 2017 the Company’s Board of Directors has conducted 41 meetings: 32 in-absentia meetings and 9 mixed (in-presentia/in-absentia) meetings. The Board of Directors has scrutinized 226 agenda items on its meetings.

Board of Directors meetings conducted Agenda items examined
total In-absentia In-presentia Mixed (in-presentia/in-absentia)
2017 41 32 0 9 226
2016 30 26 0 4 276
2015 25 20 1 4 235

Key aspects examined by the Board of Directors in 2017

..

Key topics, examined by the Board of Directors in 20177:

Corporate Governance
  • examination of agenda items to be included into the general meeting’s agenda, proposed by stockholders;
  • examination of nominees to be elected to the Board of Directors and Board of Internal Auditors, proposed by stockholders;
  • examination of practical arrangements related to convention of the 2016 annual general meeting of stockholders and its location, date and time;
  • examination of practical arrangements related to convention of the extraordinary general meeting of stockholders and its location, date and time;
  • preliminary adoption of the Company’s 2016 annual report;
  • examination of issues related to FY2016 profit distribution and dividends;
  • preparation of recommendations to agenda items of the annual general meeting of stockholders;
  • approval of forms and wording of voting papers for the annual general meeting;
  • definition of the AGSM announcement procedure;
  • approval of AGSM-related expenses;
  • adoption of a contract between the Company and its registrar;
  • examination of agenda items regarding election of the Chair of the Board of Directors, Deputy Chair and Corporate Secretary;
  • adoption of the Board of Directors action plan for 2017-2018 corporate year;
  • reshuffling of the Board of Directors Committees;
  • adoption of the Committees’ budgets;
  • determination of positions of Company’s representatives serving on governing bodies of Company’s affiliates.
Budgeting and Finance
  • adoption of a scenario for the Company’s business plan;
  • adoption of the Company’s business plan.
Strategic and Investment Planning
  • adoption of the action plans to reduce overdue transmission receivables and reconciliation;
  • examination and adoption of drafts of the Company's investment program;
  • adoption of the Company’s Smart Metering Perspective Development Programs;
  • Adoption of the Company’s Innovative Development Program for 2016-2020 to be potentially extended till 2025.
  • Company’s 2017 action plan with regard to loss reduction.
  • Adoption of the Company’s Grid Upgrade (Revamp) Blueprint;
  • Adoption of the Company’s Insurance Coverage Program for 2018;
  • Adoption of the Company’s 2018 Procurement Program.
Revision of Bylaws
  • Adoption of the Amended and Restated Anticorruption Policy of PAO Rosseti and its SACs;
  • Revision of the Internal Audit Policy of OAO IDGC of Urals;
  • Adoption of the Corporate Ethics and On-duty Conduct Code;
  • Adoption of the Amended and Restated Regulations on Insurance Coverage.
Oversight and Reporting
  • adoption of the quarterly completion reports with regard to the business plan;
  • examination of reports regarding execution of Board of Directors assignments;
  • examination of insurance coverage reports;
  • examination of progress reports regarding sale of non-core assets;
  • examination of progress reports prepared by the Executive Board;
  • examination of reports regarding management of key operating risks;
  • examination of the 2016 Internal Auditor report regarding efficiency of internal control and risk management system;
  • examination of the Audit Committee progress report for 2016-2017 corporate year;
  • examination of Company’s progress report prepared by the General Director.
Other aspects
  • authorization of a related-party transactions;
  • preliminary approval of Company’s transactions regarding alienation of immovables that are not used for production, transmission, dispatching, distribution of electric and thermal power or regarding acquisition of assets used for production, transmission, dispatching, distribution of electric and thermal power;
  • preliminary approval of Company’s charity programs;
  • reshuffling of the Central Procurement Body;
  • approval of the Company’s HQ organizational structure;
  • approval of Company’s underwriters;
  • determination of the auditor fee.

Meeting attendance by members of the Board of Directors in 2017:

Board of Directors member Board of Directors Audit Committee Personnel and Remunerations Committee Strategy and Development Committee Reliability Committee Technological Connection Committee
A.N. Fadeev 41/41 (100%) 10/10 (100%) 6/6 (100%)
S.G. Dregval 26/26 (100%)
Y.V. Goncharov 41/41 (100%) 8/8 (100%)
Y.V. Yascheritsyna 40/41 (98%) 17/17 (100%) 5/5 (100%)
N.A. Ozhe 41/41 (100%) 8/8 (100%) 14/15 (93%) 7/7 (100%)
Y.S. Tesis 41/41 (100%)
S.A. Semerikov 41/41 (100%)
V.V. Sofyin 41/41 (100%) 7/7 (100%) 15/15 (100%)
A.V. Shevchuk 40/41 (98%) 17/17 (100%) 3/3 (100%) 13/15 (87%)
R.A. Dmitrik 41/41 (100%) 17/17 (100%) 15/15 (100%) 10/10 (100%)
A.Y. Serov 24/24 (100%) 9/10 (90%)
D.V. Kulikov 15/15 (100%)
P.N. Snikkars 8/17 (47%)

SETTLEMENT OF COMPETING INTERESTS OF THE BOARD OF DIRECTORS MEMBERS

The Board of Directors members shall take reasonable and bona fide actions, in particular by taking decisions in consideration of all the information available, in the absence of any conflicts of interest and by treating the Company’s shareholders equally and assuming standard levels of risk. The Company has a comprehensive system for dealing with any conflicts of interest between the Board of Directors members by providing reasonable assurance that any conflict situation will be settled at an early stage and that the Company's interests will not be adversely affected.

As the Regulations on the OAO IDGC of Urals Board of Directors state8, once a director encountered a potential conflict of interest, incl. interest in a Company’s transaction, such director shall be obliged to inform the Board of Directors on that immediately and always put interests of the Company before personal interests. The announcement shall always be made prior to the discussion of the item with a director’s conflict of interest. Besides, within two months after they have or should have come to know of circumstances by virtue of which they may be acknowledged as interested in Company’s transactions, Board members shall notify the Company of:

  • legal entities in which they, their spouses, parents, children, siblings and half-siblings, adoptive parents and adoptees and (or) their controlled firms, are controlling entities or entitled to instruct;
  • legal entities in which government bodies are occupied by them, their spouses, parents, children, siblings and half-siblings, adoptive parents and adoptees and (or) their controlled entities;
  • implemented or future transactions, known to them, in which they may be acknowledged as interested entities.

Should this information change, the Board members shall notify the Company of the changes within 14 days since they have or should have come to know of the changes.

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Full report or any of its chapters can be downloaded as pdf files on this page.
1About company
1.1Mission and strategic goals
1.2Market share
1.3Management systems
1.4Key 2017 events
2Board of directors’ progress report
2.1Letter to stockholders
2.2Production capital formation
2.2.1Network exploitation
2.2.2Electricity transmission
2.2.3Technological connection
2.2.4Development of telecommunications and IT systems
2.2.5Investments
2.2.6Innovations
2.2.7Efficacy enhancement
2.3Financial capital formation
2.3.1Description of tariff policy
2.3.2Analysis of revenues and expenses
2.3.3Analysis of receivables and payables
2.3.4Credit ratings and bonds
3Corporate governance
3.1Corporate governance practices
3.2Corporate governance system
3.2.1General meeting of stockholders
3.2.2Board of Directors
3.2.3Board of directors’ committees
3.2.4General director and executive board
3.2.5Remuneration and compensation policy
3.3Oversight system
3.3.1Board of internal auditors
3.3.2Independent auditor
3.3.3Internal control
3.3.4Security and anti-corruption
3.3.5Risk management
3.4Investor and stockholder relations
3.4.1Shareholder capital structure
3.4.2 Shareholder rights
3.4.3The company and stock market
3.4.4Communications with market participants
3.4.5FAQ
3.4.6Allocation of profit
3.4.7Contact information
4Stakeholder
4.1Human resources management
4.2Customer support
4.3Supplier relationship management
4.4Public and goverment relations
4.5Company’s transactions
4.6Subsidiaries and financial investments
4.7Environment protection
5Appendices
5.1Prepared under Russian accounting standards
5.2Prepared under international financial reporting standards
5.3Corporate governance code compliance report
5.4References
5.5Abbreviations and acronyms
5.6Sitemap