Organization and principles of corporate governance
Information about the organization and general principles of corporate governance applied in the Company:
RusHydro Group’s corporate governance aims to protect the rights and interests of the shareholders, build and maintain trusted relationships between the Company and its investors, and grow the Company’s value and dividend yields.
The Group’s corporate governance principles and procedures are laid out in the Company’s Charter and internal regulations. The corporate practices are formalized in the Corporate Governance Code.
The corporate governance system is based on the principles enshrined in it:
- Equitable and fair treatment of all shareholders;
- Professionalism, responsibility and accountability of the Board of Directors to the Company’s shareholders;
- Transparency and accessibility of information about the Company;
- Effective system of internal control and risk management;
- Exercise by all shareholders, the Company, its management bodies, officers and other stakeholders of their rights in good faith, prevention of abuse of rights;
- Prevention of any shareholder actions aimed at causing harm to other shareholders or the Company;
- Continuous improvement of corporate governance practices.
The company continues to implement corporate governance principles by bringing internal documents in line with it, as well as applying the rules in everyday practice.
Corporate governance in the Company is carried out in accordance with:
Corporate governance structure
The General Meeting of Shareholders is the supreme governing body of the Company, which operates in accordance with the laws of the Russian Federation, the Company’s Charter and the Regulations on the Procedure for Convening and Holding General Meetings of Shareholders of RusHydro.
Board of Directors
The Board of Directors consists of 13 directors and operates based on the Regulations on the Procedure for Convening and Holding the Board of Directors’ meetings of RusHydro.
The Board of Directors is a governing body that sets the priority areas of the Company’s operations, approves its development strategy and determines the core principles and approaches to the organization of the Company’s internal control and risk management functions. The Board of Directors also supervises the Company’s executive bodies and performs other key functions, including such as investment and business planning, performance management, innovative development, risk management, and sustainable development, including social policy, charity and environmental aspects.
RusHydro’s Board of Directors has six committees:
Nomination and Compensation Committee;
Committee on Energy Development of the Far East;
Committee on Reliability, Energy Efficiency and Innovation.
The Committees include persons with experience and knowledge in relevant fields, which increases the efficiency and quality of the work of the Board of Directors. Committees act on the basis of the Provisions on Committees under the Board of Directors. In accordance with the best corporate governance practice, only members of the Board of Directors who are independent directors are elected to the Audit Committee and the HR and Nomination and Compensation Committee.
The Management Board
The Management Board carries out its activities on the basis of the Regulations on the Management Board of PJSC RusHydro, guided by the decisions of the General Meeting of Shareholders and the Board of Directors of the Company. The composition of the Management Board includes managers responsible for managing financial and economic activities, production activities, innovations, and strategies. General management of the Company's activities is carried out by the Chairman of the Management Board - General Director N. Shulginov, elected by decision of the Board of Directors in 2015.
RusHydro (including indirectly through subsidiaries) has stakes in authorized capital of companies engaged in electricity and heat generation and, energy facilities design, construction, repair, maintenance, rehabilitation and modernization, and other activities.
The Company contributes to subsidiaries’ strategy delivery, stable economic growth and investment appeal, and protection of rights and interests of the shareholders of both the Company and its subsidiaries.
The Company manages its subsidiaries by being represented at general meetings of shareholders/participants, on boards of directors and supervisory bodies of the subsidiaries.
Deciding on matters reserved to supreme governing bodies of the subsidiaries where the Company exercises the rights of the sole shareholder (participant) falls within the remit of the Management Board. Establishing the Company’s position on key matters regarding subsidiaries (reorganization, liquidation, increase of the authorized capital, approval of major transactions, participation of the subsidiary in other energy organizations, disposal of energy assets) falls within the remit of the Board of Directors.
The Company’s position on other important matters regarding subsidiaries (KPI approval (adjustment), participation of the subsidiary in non-energy organizations, nomination of candidates to the subsidiary’s management and supervisory bodies, etc.) is established by the Management Board.
The Internal Audit Commission is a permanent body responsible for the monitoring of the Company’s financial and business operations.
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