Corporate Governance overview
SUEK’s corporate governance system is designed to ensure the business operates in an effective and responsible way that creates value for all stakeholders.
Our corporate governance system is underpinned by the following principles:
- Treating all shareholders equally, recognising and protecting their rights
- Ensuring the efficiency of our strategic and operational management and internal control and audit mechanisms
- Ensuring the company’s informational and financial transparency by providing stakeholders with accurate information in convenient formats
- Adhering to rigorous ethical standards in business
- Providing a decent, safe and healthy working environment for our employees
The key internal documents relating to corporate governance at SUEK are our Charter, Regulation on the Board of Directors, Regulation on the Management Board, Corporate Governance Code and SUEK’s Code of Corporate Ethics.
The procedure for preparing, convening and holding the General Meeting of Shareholders is also governed by relevant regulations.
In developing our corporate governance system, we are guided by the provisions of the Corporate Governance Code recommended by the Bank of Russia, as well as by the best international practices. The company has adopted a set of recognised international approaches, namely:
- The positions of Board Chairman and CEO are separate
- The Board includes the Strategy Committee, the Audit Committee and the Nomination and Compensation Committee, all of which include Independent and Non-Executive Directors with relevant experience
- When making decisions, Board members avoid potential conflicts of interest
- The status of Independent Director and the number of such Directors are monitored and confirmed by the Board of Directors
- The Board’s work is reviewed on an annual basis
SUEK’s governing bodies are the General Meeting of Shareholders, the Board of Directors, the Management Board and the CEO.
General Meeting of Shareholders
In 2019, the Annual General Meeting of Shareholders elected the members of the Board of Directors, approved the 2018 Annual Report and financial statements and re-appointed KPMG as SUEK’s external auditor for 2019. It also made a resolution on the сompany’s participation in a non-governmental organisation (Transportation Security Association).
Board of Directors
The Board of Directors is a key element of SUEK’s corporate governance system. The legislation of the Russian Federation and internal documents of the company vest the Board with the authority to ensure the efficient management of the company. The Board of Directors runs three Committees:
- Strategy Committee
- Audit Committee
- Nomination and Compensation Committee
The activities of all Committees are aimed at improving the efficiency and quality of decisions made by the Board of Directors.
Composition of the Board of Directors
To ensure the Board of Directors is efficient, its highly qualified members take individual responsibility and overall accountability for all decisions made by the Board. The composition of the Board of Directors is balanced and complies with all applicable requirements from the shareholders and best international practices. The directors’ experience in mining, energy and finance contributes to quality strategic management and helps address the challenges faced by the company.
SUEK regularly rotates its Board of Directors. In August 2019, Tom Cairns and Natalia Izosimova left the company. At the same time, Vladimir Hlavinka, a power industry expert, and Michael Baumgärtner, experienced in finance, joined the Board.
Four Directors are Independent: Michael Baumgärtner, Klaus-Dieter Beck, Vladimir Hlavinka and Iain Macdonald (their independence is confirmed by the Board’s decision). Seven Board members are Non-Executive Directors: Michael Baumgärtner, Klaus-Dieter Beck, Vladimir Hlavinka, Stefan Judisch, Alexander Landia, Iain Macdonald and Andrey Melnichenko. The Board also includes SUEK’s CEO, Vladimir Rashevsky. Alexander Landia serves as the Chairman of the Board.
Selection and nomination policy
The Nomination and Compensation Committee oversees the selection and nomination of new Board members and ensures that it is well balanced and that the competences of Directors will support the achievement of the company’s strategic objectives.
Candidates for the Board are Directors who have knowledge of the coal-mining sector, the electric power and the heat generation industries; they should also be highly proficient in finance, investment and risk management.
The criteria that Independent Directors must satisfy are defined in SUEK’s Corporate Governance Code and comply with the Corporate Governance Code recommended by the Bank of Russia. Board members are elected for the period up until the next Annual General Meeting, with the possibility of re-election. The Nomination and Compensation Committee evaluates the compliance of prospective Board members with the independence criteria.
Induction and familirisation procedure
The company has developed an induction programme for newly elected Board members, which aims to familiarise Non-Executive Directors with the business, the activities of its subsidiaries and the rules and practices adopted by the management bodies.
Upon election, Directors are granted full access to materials and minutes from all previous Board of Director and Committee meetings.
Control over the induction procedure is exercised by the Corporate Secretary.