Corporate Governance Structure
The Company’s corporate governance conforms to the applicable Russian laws, the Articles of Association of the Company, and internal documents of the Company and is based on the principles of accountability, fairness, transparency, and responsibility.
The management and control bodies of the Company include as follows:
- General Meeting of Shareholders;
- Board of Directors;
- Management Board (collegial executive body);
- Sole executive body;
- Internal Audit Commission.
The Company’s highest management body is the General Meeting of Shareholders, enabling shareholders to exercise their rights to participate in running the Company’s business. The General Meeting of Shareholders adopts decisions on issues of utmost importance to the Company’s operations.
The Board of Directors of the Company formulates the Company’s strategy, is in charge of the general management of the Company’s activities, and controls the work of the Company’s executive bodies. In order for the Board of Directors to perform its functions in the most effective way and with the aim of preliminarily considering the most important issues falling within the competence of Board of Directors, the Board of Directors of the Company has profile committees.
With a view to achieving the goals of the Company and implementing its strategy, the Company’s day-to-day activities are managed by a collegial executive body, the Management Board of the Company, and the sole executive body of the Company. The sole executive body and the Management Board are accountable to the Board of Directors of the Company. As specified in Articles of Association of the Company, the members of the Management Board are elected by the Board of Directors of the Company. The Management Board is chaired by the Chairman of the Management Board. The sole executive body is in charge of the Company’s day-to-day activities, dealing with issues except those falling within the competence of the General Meeting of Shareholders, the Board of Directors, and the Management Board of the Company.
On June 30, 2012, the Annual General Meeting of Shareholders resolved to transfer the powers of the Company’s sole executive body to a management organization, Open Joint-Stock Company Federal Grid Company of Unified Energy System (FGC UES). Before that, the functions of the Company’s sole executive body were performed by the Director General of the Company, who also was the Chairman of the Company’s Management Board.
In order to control its financial and economic activities, the Company annually elects the Internal Audit Commission, which is accountable to the General Meeting of Shareholders of the Company. The competence of the Internal Audit Commission includes carrying out audits (inspections) of the financial and economic activities of the Company and validating the information contained in the Company’s Annual Report and annual accounting statements that should be approved by the Annual General Meeting of Shareholders.
Therefore, the existing corporate governance system of the Company complies with the applicable Russian laws and aims to ensure the management and control of the Company’s activities and enable shareholders to exercise their rights.