7.4.Management and Control Bodies

Corporate Governance System
Structure of Governing and Control Bodies
Governing/control body Fundamental competences Regulatory documents Meeting frequency
General Meeting of Shareholders Transneft’s supreme governing body.
Its competences include the most important issues of the Company’s management, including:
  • – to approve the Company’s annual report and annual accounting (financial) statements;
  • – to elect members of the Board of Directors and the Revision Commission;
  • – to pass resolutions on paying dividends;
  • – to select external auditors.
Competences, timeframes, preparation and holding procedures for the General Meeting of Shareholders are determined by the Federal Law On Joint-Stock Companies, the Articles of Association, and the Regulations on the General Meeting of Shareholders of Transneft.

The Annual General Meeting of Shareholders is held once a year.

In 2019, no Extraordinary General Meetings of Shareholders (EGMS) were held.

Board of Directors The Board of Directors of the Company is in charge of the overall management of the Company’s business.
It is the competence of the Board of Directors:
  • – to protect and ensure the rights of shareholders;
  • – to monitor the development and approval of the Company’s strategy, long-term plans and major programmes regulating the Company’s activities, as well as to consider reports on their implementation;
  • – to participate in the establishment of effective mechanisms for internal monitoring of the Company’s financial and operational activities, as well as the risk management system;
  • – to approve the Company’s budget;
  • – to determine the KPIs for the Company, its President and Board members;
  • – to facilitate timely disclosure of complete and accurate information on the Company’s activities;
  • – to pass resolutions on the key projects and major transactions.
The procedure for forming the Board of Directors, its status, membership, functions, goals and objectives, its competences, the procedure for its work and cooperation with other management bodies of Transneft are stipulated in the Company’s Articles of Association and the Regulations on the Board of Directors.

On average, the Board of Directors holds 5-7 in-person meetings per year.

In 2019, 24 meetings were held (including 7 inperson meetings and 17 in-absentia meetings).

Committees under the Board of Directors Committees under the Board of Directors are advisory bodies which provide preliminary examination of issues and prepare recommendations to the Board of Directors. The Regulations on the Strategy, Investments and Innovations Committee under the Board of Directors of the Public Joint Stock Company Transneft, the Regulations on the Audit Committee under the Board of Directors of the Public Joint Stock Company Transneft and the Regulations on the Human Resources and Remuneration Committee under the Board of Directors of the Public Joint Stock Company Transneft were approved by the resolution of the Board of Directors of Transneft on 19 January 2017 (Minutes No. 1).

The frequency and the format of meetings of Committees under the Board of Directors depend on the specifics of each Committee.

In total, 32 meetings of Committees under the Board of Directors were held in 2019.

President

President is the sole executive body who manages day-to-day operations and reports to the Board of Directors and the General Meeting of Shareholders. President is appointed by the General Meeting of Shareholders for 5 years

and serves as the Chairman of the Management Board.Nikolay Tokarev has been the President of Transneft since 2007.

The President acts in accordance with the current legislation, the Articles of Association and the Regulations on the President of Transneft.
Management Board

The Management Board of the Company is a collective executive body

responsible for day-to-day management of Transneft.The Management Board is chaired by the President of Transneft.

The Management Board is guided by the current legislation, the Articles of Association and the Regulations on the Management Board of Transneft.

Meetings of the Management Board are held according to the approved plan (at least once a month).

In 2019, the Management Board held 46 meetings.

Revision Commission The Revision Commission is a permanent elective body controlling financial and operational activities of Transneft. The Revision Commission’s activities are regulated by the Articles of Association and the Regulations on the Revision Commission of Transneft. An inspection of financial and operational activities of Transneft was performed in 2019.