Improving the corporate governance system
Corporate Governance quality audit
Annual report JSOC Bashneft 2013
102
Annual report JSOC Bashneft 2013
103
ABOUT
THE COMPANY
OPERATING RESULTS
CORPORATE GOVERNANCE
APPENDICES
INFORMATION FOR
SHAREHOLDERS AND INVESTORS
Improving the Company’s governance system is an important
part of work to create solid development prospects.
The following events that took place in 2013 were particularly
important in helping the Company improve its corporate gov-
ernance efficiency:
· The Budget and Audit Committee of the Board of Directors
was reformed. In its place the Audit Committee and Finance,
Budget and Risk Committee of the Board of Directors were
established. These сhanges are aimed at bringing the struc-
ture in line with best international practice regarding how
the Audit Committee is organised and with the goal of op-
timising the work carried out by members of the Board of
Directors.
· A Board of Directors Project Assurance Committee was
formed. Its objectives include organising independent ap-
praisals of Bashneft’s large/capital-intensive projects.
· The Regulation on the Board of Directors details members’
responsibilities regarding informing the Group of any pos-
sible conflict of interest. A redrafted Board of Directors
work regulation was endorsed, detailing processes involved
in preparations for Board of Directors meetings and organ-
isational nuances regarding holding these meetings. The
regulation clarifies and expands statutes dealing with the
“new Board member induction process”.
· Regulations were approved governing the process of “prep-
aration, agreement and submission for approval by JSOC
Bashneft’s collegiate governance agencies” defining the
sequence governing planning, processes and individuals re-
sponsible for the timely and appropriate preparation of ma-
terials on all Management Board, Board of Directors and
Board of Directors committee agenda matters.
· The budget execution report format was significantly ex-
panded. In addition to other information, the report now
contains competitor comparisons, an overview of the stock
market, key project fulfilment status and HSE event status.
· Work to optimise the Group’s structure has continued.
Internal documents regulating individual
corporate conduct procedures, principles
and practices are available on Bashneft’s
website:
Regulations on the General Meeting of Shareholders
Regulations on the Board of Directors
Regulations on the Committees of the Board of Direc-
tors
Regulations on the Management Board
Regulations on the President
Regulations on the Audit Commission
Regulations on the Corporate Secretary
Regulations on Information Policy
Regulations on Insider Information
Regulations on Dividend Policy
Regulations on Rewards and Compensation to the
Members of the Board of Directors
Code of Corporate Conduct
Code of Ethics
Anti-Corruption Policy
The Company continues to demonstrate its
commitment to the best corporate gover-
nance practices, retaining a significant rep-
resentation of independent directors in the
Board. Independent directors are present in
five out of seven active Board of Directors
committees.
Corporate Governance quality audit
Since 2010 the Company has performed an annual internal
corporate governance quality audit, which allows us to expose
the main drawbacks of existing corporate governance prac-
tice and determine the key areas for improvement.
The corporate governance quality audit is carried out against
the following three aspects of corporate governance:
· shareholders’ rights and relations with other stakeholders;
· the structure and effectiveness of corporate governance and
control;
· information disclosure.
Corporate governance audit results are reviewed by the Board
of Directors’ Corporate Conduct Committee and presented
to Board members.
In 2013, the Company attracted an external corporate gover-
nance quality auditor (Russian Institute of Directors). The au-
dit gave the corporate governance practice a good rating and
recommendations on optimising how governance agencies
work and the Company’s information policy functions have
been incorporated into the Company’s corporate governance
improvement plans.
