Performance of the Board of Directors in 2017
In 2017, the Board of Directors held 28 meetings (5 meetings in person and 23 meetings by absentee voting) addressing various matters of the Company’s business, including the following key resolutions:
- On approval of the Rosneft-2022 Strategy aimed at quantum changes in the Company's business by introducing advanced management approaches and new technologies, and on increasing returns on the Company’s existing assets
- On updating Rosneft’s Long-Term Development Program Approved by the Board of Directors in December 2014. to reflect new strategic guidelines, and on reviewing its progress in 2016
- On approval of Rosneft’s business plan, and on reviewing its performance and normalization results in 2016
- Carrying out instructions given by the President of the Russian Federation and the Government of the Russian Federation concerning:
- developing and implementing initiatives to reduce operating expenses and enhance import substitution and procurement
- disposing of non-core assets, and reviewing the progress reports on Rosneft’s Non-Core Assets Disposal Program on a quarterly basis (in Q1 – Q3 2017)
- introducing professional standards in the Company’s operations
- On implementing business projects to develop and expand large fields
- On Rosneft’s director compliance with the independence criteria described in the Moscow Exchange Listing Rules (in 2017, the independence of Gerhard Schroeder, Matthias Warnig, Oleg Viyugin, and Donald Humphreys was determined)
- As part of introducing the Bank of Russia’s Code provisions, on:
- the progress against the Roadmap for Incorporating Key Provisions of the Bank of Russia’s Code in Rosneft’s Operations
- the results of the annual self-assessment of Rosneft’s Board of Directors’ performance in the 2016–2017 corporate year
- performance reports of the Committees of Rosneft’s Board of Directors in the 2016–2017 corporate year
- Approving the Company’s internal documents:
- Amendments to Rosneft Dividend Policy
- Policy on Sustainable Development
- Information Policy
- Policy on Innovation Activity
- Company’s Credit Policy and amendments to the Available Cash Policy
- Amendments to the Policy on Internal Audit
- Regulations on the Procedure for Managing Conflicts of Interest in Rosneft and Group Subsidiaries and amendments thereto
- Regulations on Evaluation of Rosneft’s Board of Directors Performance
- Regulations on Holding by Members of Rosneft’s Board of Directors of Rosneft Shares, Shares of, and Equity Stakes in, Group Subsidiaries
- Amendments to the Regulations on the Procedure for Formation and Work of Board of Directors Committees
- On approval/review of Rosneft’s programs and reports:
- Energy Saving Program for 2018–2022 and the progress report on the Company’s 2016–2020 Energy Saving Program for 2016
- Progress report on the Company’s Innovative Development Program for 2016
- Report on the Company’s compliance with legislative requirements to countering the misuse of insider information and market manipulation for 2H 2016 and 1H 2017
- Reports on the Company’s internal audit results for 2016 and 1H 2017
- As part of the incentive system – approval of the 2017 KPIs for Rosneft’s top managers, and normalized top manager KPIs for the purposes of the 2016 annual bonus program, as well as their achievement of these KPIs and remuneration in 2016
- On membership of Rosneft’s Management Board (in 2017, Yuri Kurilin and Vlada Rusakova were appointed to the Management Board)
- On approval of the Exchange-Traded Bonds Program in the total amount of up to RUB 1.3 trln (to refinance the existing loans and bonds and finance the investment program and Rosneft’s foreign projects)
- On approval of over 70 related party transactions. The Report on Rosneft’s Related Party Transactions in 2017 was approved by Rosneft’s Board of Directors on 25 April 2018 and posted on the Company’s official website in the Investors section. In addition, according to the amendments to the Federal Law On Joint-Stock Companies dated 1 January 2017, the Board of Directors reviewed more than 250 related party transactions, as established by paragraph 1.1 of Article 81 of the Federal Law On Joint-Stock Companies .
Meetings of the Board of Directors are run on a scheduled basis, taking into account deadlines for processing the Company’s strategic matters. Action plans are approved by the Board of Directors every six months, assuming its meetings have to be held at least once in six weeks.
The Board of Directors’ action plan also contains items outlined in directives of the Russian Government, which need to be regularly reviewed by the Board of Directors, items relating to the preparation of the General Shareholders Meeting, as well as standard items such as approval of the Company’s transactions, business projects, and local regulations, determining the stance on significant matters of Group Subsidiaries’ operations, etc.
Strategic matters are discussed by the Board of Directors in person. The Charter determines a list of matters to be decided in person only. Rosneft’s Corporate Governance Code also determines matters that the Board of Directors seeks to consider in person. The format of a meeting is determined by the Chairman of Rosneft’s Board of Directors.
Action plans of the Board of Directors’ Committees are approved based on the meeting schedule of the Board of Directors. Matters that require preliminary assessment by a dedicated committee are decided by the Board of Directors taking into account the recommendation of the respective committee.
The Board of Directors annually/semi-annually considers the following key matters:
Rosneft’s Long-Term Development Program audit results and annual approval of the updated Long-Term Development Program Approved by the Board of Directors in December 2014. (taking into account changes in strategic guidelines, objectives and measures related to the development of the Company’s business segments, the independent auditor’s recommendations based on the implementation audit results, and directives of the Government of the Russian Federation).
Approval of the Company’s business plans, review of their results, and normalization of approved targets.
Progress reports on the innovative development and energy saving programs for the reporting year, and program approvals for the next year.
Approval of team and individual management KPIs, normalization of targets, progress assessment, and determining remuneration amounts for the Company’s top managers.
Review of reports on:
- Introducing professional standards in the Company’s operations;
- Progress under the Non-Core Assets Disposal Program;
- The Company’s HSE activities;
- Internal audit of the Company’s operations;
- The Company’s compliance with legislative requirements to countering the misuse of insider information and market manipulation.
The results of the self-assessment of the Board of Directors’ performance, etc.