The primary goals of the Gazprom Neft corporate governance system are to support the effective implementation of the sustainable development strategy, the Company’s continuous growth and its long-term competitiveness.
Gazprom Neft continuously makes improvements to its corporate governance system with the results of this work reviewed annually at meetings of the Board of Directors.
The corporate governance system meets the standards and requirements of Russian legislation, the Gazprom Neft Charter and the Company’s internal standards. Gazprom Neft is also guided by the best international experience and most successful practices in corporate governance.
The principles and rules of the corporate governance system are enshrined in the Code of Corporate Governance (hereinafter the Code). The Code aims to ensure the thorough protection by the Company of the rights and interests of its shareholders, the transparency of decision-making by its governance bodies, the professional and ethical responsibility of members of internal governance and control bodies to the Company, its employees and counterparties, greater information transparency and the development of a system of business ethics standards.
The General Meeting of Shareholders is the supreme governing body whose purview includes the most significant issues concerning the Company’s activities: approval of the annual reports, annual accounting (financial) statement, distribution of profit and amendments to the Charter, among other things. The General Meeting of Shareholders elects the Board of Directors.
Gazprom Neft held its annual General Meeting of Shareholders in June 2016.
The Board of Directors handles the strategic day-to-day management of the Company. The Board determines the priority areas for the Company’s development, monitors the executive bodies to ensure they perform their duties effectively and is responsible for managing the key risks that influence the achievement of the Company’s strategic goals.
The Board of Directors is comprised of thirteen people, including members of the Gazprom PJSC Management Board who represent the interests of the controlling shareholder, and two independent directors. Twelve of the thirteen Board members are non-executives. The Board of Directors is chaired by Gazprom PJSC Management Board Chairman Alexey Miller.
The Board of Directors is balanced insofar as its members possess the key skills that are essential for effective work. The members of the Board of Directors have skills in accounting, strategic management, corporate governance, corporate finance and risk management as well as knowledge specific to certain areas of the Company’s businessA list of the members of the Board of Directors, their specific skills as well as the number of meetings at which each member was present is presented in the Company’s Annual Report for 2016 on the Company’s website.. When performing their functions, Board members actively interact with the Company’s management, structural units, the registrar and the auditor.
The Board of Directors monitors improvements in the corporate governance system and practices at the Company and reviews reports on the implementation of an action programme to improve corporate governance on an annual basis.
The Board of Directors conducts a self-assessment of its work each year. This analysis concerns both the nature of the Board’s activities as well as the procedures it employs.
The analysis of the Board’s performance over the reporting period revealed improvements in the following areas: identification of strategic priorities, interaction with executive management, balanced membership and functioning of the Board of Directors. In addition, issues falling within zones for development based on the assessment results included the increased awareness of members of the Board of Directors, including the timely provision of information and improvements to communication channels with management and other individuals.
In 2016, the Board of Directors considered the following matters concerning sustainable development:
- the approval of the Report on the Implementation of the Gazprom Neft PJSC Innovative Development Programme for 2015;
- the procurement activities of the Gazprom Neft Group in the changing market conditions and measures to minimise the proportion of imported procurements;
- the status of energy conservation and improved energy efficiency work at the Company;
- the implementation of the programme to utilise and increase the effective utilisation of associated petroleum gas (APG);
- industrial safety measures;
- the approval of sponsorships for sports clubs in the regions where the Company operates during the sports seasons – Hockey Club SKA and NP Avangard SC.
The Secretary of the Board of Directors handles regular interaction with shareholders and the coordination of the Company’s actions to protect the rights and interests of shareholders and also supports the effective work of the Board of the Directors.
The Audit Committee and Human Resources and Remuneration Committee operate under the Board of Directors.
The Audit Committee evaluates the effectiveness of the internal control systems for the Company’s financial and business operations and also monitors the risk management system.
The Human Resources and Remuneration Committee contributes to the creation of the Company’s human resources policy and handles matters involving remuneration for members of governing bodies and the Audit Commission.
The executive bodies are the Management Board (collective executive body) and CEO (sole executive body who performs the functions of the Chairman of the Management Board). The CEO and the Management Board are accountable to the Board of Directors and the General Shareholders Meeting. As of 31 December 2016, the Management Board was comprised of eleven membersA list of the members of the Management Board and their specific skills as well as the number of meetings at which each member was present is presented in the Company’s Annual Report for 2016. . The Company’s CEO is Alexander Dyukov.
The Company has mechanisms that aim to eliminate the possibility of a conflict of interests in the supreme governing bodies Read more about compliance with the Code of Corporate Governance in the Company’s Annual Report for 2016.