Corporate Governance

Considering the use of advanced standards and traditions of corporate governance as one of the most important conditions of its development, the Bank pays much attention to further improvement of this process on the basis of universal standards and recommendations in this field, including such of the Basle Committee on Banking Supervision, Organisation for Economic Cooperation and Development (OECD), International Finance Corporation (IFC), and so on.

The Bank’s current corporate governance practice is aimed at clear division of authorities of the management bodies and other participants of corporate relations, as well as at inadmissibility of unwarranted interference of the Board of Directors and shareholders with the everyday activity of the management bodies and restriction of their ability to promptly decide upon issues relating to the Bank’s activity with account for economic situation.

The optimal model of corporate governance is built on the basis of the objective needs of the Bank and its shareholders and with account for such factors as the stage of development and the Strategy of the Bank, the Bank’s role in the investment interests of co-owners and the required degree of control on their part, the need for and forms of external attraction of investment.

The regular evaluation of the Bank's corporate governance organised based on techniques used by rating agencies and recommendations of the Bank of Russia, the implementation of actions developed on the basis of such evaluations, the study of the experience of the other companies contribute to the introduction of new and the development of the available procedures related to organising the efficient activity of the executive and control bodies, enhancement of business manageability. The plan of actions aimed at the development of the Bank’s corporate governance system stipulates the relevant measures in such fields as the protection of shareholders' rights and the management of risk connected to their violation, activity of the Board of Directors and executive bodies, internal control, audit and risk management, transparency of activities, corporate social responsibility, and support of corporate governance practice. The implementation of actions on the improvement of the Bank’s corporate governance system is considered quarterly at the meetings of the Board of Directors.

The general management of the Bank’s activity on the part of the Board of Directors is based on the approved Development Strategy, the conclusions of a systemic analysis of its implementation, and consideration of internal and external factors. The Board of Directors goes deeply in the processes taking place at the Bank and supports their qualitative improvement. The qualification of members of the Board of Directors, most of whom are top managers of successful enterprises, have good reputation, rich professional and managerial experience, including such in the banking sector, enables them to make decisions on all key issues of the Bank’s activity that fall within the competence of the Board of Directors. Over a half of the Board of Directors are independent directors. The Regulations for the Board of Directors contain the Rules of participation of the Bank’s Directors in the management bodies of other entities, specify the list of cases of improper execution of duties by Directors, as well as the forms and instruments of personal protection of members of the Board of Directors in cases of inception of liability on their part. The Bank introduced the practice of self-certification by the Board of Directors and individual self-certification by its each member by filling-in an anonymous questionnaire, as well as the new procedure for the payment of remuneration to Directors that stipulates a differentiated approach to calculation of payments to Directors for the period of their authorities depending on the Bank’s performance and personal activity.

Within the Board of Directors, there are the Strategic, Audit, Personnel and Remuneration, and Risk Committees, which help implement the managerial and control authorities of the Board of Directors. President of the bank (non-executive director) and Corporate Secretary of the Bank, as well as the Office of the Board of Directors and the Working Group for Corporate Governance contribute to ensuring the efficient performance by the Board of Directors of its functions, meeting by the Bank’s bodies and officials of the rules of practice that guarantee the implementation of rights and interests of shareholders.

The executive bodies – Chairman of the Board of Management and the Board of Management of the Bank – exercise management of the Bank’s day-to-day activity and direct implementation of the corporate governance procedures. The Board of Management decides on the most complicated issues related to everyday management that require collegial decision. Under the Board of Management there are permanent and interim working bodies (Financial Committee, Products and Sales Committee, Information Security Committee, working groups, commissions, and so on), whose task is to consider separate issues within the competence of the Board of Management, develop recommendations on such and make decisions within their scope of authorities, ensure the implementation of decisions of the Bank’s management bodies.

The Board of Directors and executive bodies of the Bank manage and control, on regular basis, the work aimed at further improvement of the internal regulatory and legal framework and at the introduction of best practices of corporate governance into the Bank’s activity.