Committees of Rosneft’s Board of Directors

In order to enable a preliminary review of the most important matters within the authority of Rosneft’s Board of Directors, three standing committees of the Board of Directors have been set up.

The Committees have been formed with due regard for recommendations of the Bank of Russia’s Corporate Governance Code and relevant professional experience and expertise of members of the Board of Directors, which allows the Committees to efficiently achieve their tasks.

The Audit Committee of the Board of Directors is comprised solely of independent directors; the majority of members of the HR and Remuneration Committee are independent directors.

Audit Committee

monitors completeness and reliability of the Company’s accounting (financial) statements and other reports


ensures independent, unbiased, and efficient internal and external audit, and communication with the Audit Commission


monitors reliability and efficiency of the internal control and risk management system


monitors the Company’s corporate governance practice, develops recommendations for enhancement of the Company’s corporate governance framework


monitors the efficiency of the system for reporting potential wrongdoings by the Company’s employees (including misuse of insider or confidential information) and third parties, as well as other violations in the Company’s operations.

Donald Humphreys Chairman, Independent Director

Matthias Warnig Independent Director

Oleg Viyugin Independent Director

The HR and Remuneration Committee

assesses the performance of the governing bodies, in particular through developing an assessment methodology and assessing the performance of the Board of Directors, executive bodies, and top managers of the Company


involves best talent in Company management and creates incentives to drive their performance, in particular through evaluating nominees to the Board of Directors against the established eligibility criteria, assessing independent director compliance with independence criteria, and developing recommendations for shareholders on nominees to the Board of Directors


monitors information disclosure on the remuneration policy and practices as well as on holding of the Company shares by members of the Board of Directors, the Chief Executive Officer, members of the Management Board, and other top managers.

Membership of the Audit Committee and the HR and Remuneration Committee has not changed in the reporting year

Matthias Warnig Chairman, Independent Director

Donald Humphreys Independent Director

Guillermo Quintero

Strategic Planning Committee

assists the Board of Directors in setting the Company’s strategic goals and guidelines, and assessing the Company’s performance in the long term


contributes to determining the Company’s business priorities, in particular through previewing proposals on the Company’s strategy, business projects, and investment programs, as well as major stake/share acquisitions and disposals, and establishing joint ventures


is involved in monitoring the performance of the Company’s business plans


assesses the efficiency of Rosneft’s communications with investors and shareholders.

Membership of the Audit Committee and the HR and Remuneration Committee has not changed in the reporting year

Robert Dudley Chairman (since 29 September 2017, member of the Committee in the reporting year)

Alexander Novak Member of the Committee in the reporting year until 22 June 2017, re-elected to the Committee on 29 September 2017 Deputy Chairman

Oleg Viyugin Independent Director (Chairman until 29 September 2017)

Faisal Alsuwaidi (since 22 June 2017)

Andrey Belousov (since 29 September 2017)

Ivan Glasenberg (since 22 June 2017)

Performance of the Board Committees in 2017

In 2017, the Audit Committee held 14 meetings, during which the Committee:

  • as part of reviewing the completeness, accuracy, and reliability of the Company’s accounting (financial) statements and safeguarding the objectivity and independence of the external audit function:
    • on a quarterly basis, reviewed the Company’s consolidated financial results and financial statements, as well as their audit results (prior to submission for review by the Audit Committee, the draft financial statements and information prepared by the auditor had been discussed at conference calls attended by Committee members, Rosneft management, and representatives of the external auditor)
    • reviewed the audit results, the audit report on the accounting (financial) statements, and confirmed there were no potential indicators of non-independence of the auditor at the time of audit of the 2016 accounting (financial) statements prepared in accordance with Russian Accounting Standards
  • as part of ensuring an efficient internal control and risk management system:
    • reviewed reports on corporate risks for 2018 and approved the holistic development plan for the risk management and internal control system for 2017–2019
    • recommended for approval by the Board of Directors amendments to the Company’s Financial Control Policy, to maintain the efficiency of financial control through aligning financial control management with the Company’s Policy on Risk Management and Internal Control System
  • as part of assuring objective and independent internal audit:
    • reviewed internal audit reports for 2016 and the first six months of 2017, and information on independence and objectivity of internal audit, endorsed the Internal Audit Action Plan for 2017
    • on a quarterly basis, reviewed information on assessment and monitoring of potential conflicts of interest related to the head of Internal Audit holding the position of a Member of Rosneft’s Management Board
    • previewed and recommended for approval by the Board of Directors amendments to the Company’s Internal Audit Policy
  • as part of corporate governance – previewed and recommended for approval by the Board of Directors amendments to the Company’s Regulations on the Procedure for Managing Conflicts of Interest in Rosneft and Group Subsidiaries
  • as part of communication with the Audit Commission – reviewed the opinion of the Audit Commission based on the financial and business audit results of Rosneft for 2016.

The Committee also recommended for approval by the Board of Directors:

  • amendments to the Rosneft Dividend Policy, aimed at increasing the Company’s investment appeal and creating a favorable environment to increase the Company’s market capitalization and attract investors
  • proposals to the General Shareholders Meeting on distribution of the Company’s profit for the financial year 2016, the amount of dividend and dividend payout procedure for 2016 and six months of 2017.

In 2017, the Strategic Planning Committee held 11 meetings, during which the Committee:

  • as part of its contribution to determining the Company’s business priorities, recommended the Board of Directors:
    • to approve the Company’s long-term strategic guidelines until 2030, the updated Long-Term Development Program of Rosneft, and the Rosneft–2022 Strategy, as well as the Company’s business plan for 2018–2019
    • to approve key targets and investment for the Company’s business projects to develop and expand fields
    • to approve the 002R Rosneft Exchange-Traded Bonds Program, the Exchange-Traded Bond Prospectus for the bonds placed thereunder, and to approve Rosneft’s exchange-traded bond placements
    • to approve the progress report on the Company’s Innovative Development Program for 2016
  • as part of involvement in monitoring the performance of the Company’s business plans – recommended that the Board of Directors take into account the information on the results of performance and KPI normalization of Rosneft’s business plans for 2016 and 2017
  • as part of investor and shareholder relations – recommended to approve Rosneft’s Information Policy.

The Strategic Planning Committee also recommended the Board of Directors to approve the Register of the Company’s non-core and inefficient assets.

In 2017, the HR and Remuneration Committee held 14 meetings, during which the Committee:

  • as part of involving best talent in Rosneft management and creating incentives to drive their performance:
    • recommended top manager candidates for appointment to the Management Board of Rosneft
    • reviewed the proposed remuneration of members of the Board of Directors and the Audit Commission for the 2016–2017 corporate year, and compensation of expenses they incurred when discharging their duties
    • previewed and recommended for approval by the Board of Directors of Rosneft the Regulations on Holding by Members of Rosneft’s Board of Directors of Rosneft Shares, Shares of, and Equity Stakes in, Group Subsidiaries
  • as part of assessing the performance of the Company’s governing bodies:
    • reviewed the 2017 KPIs for Rosneft’s top managers, normalized the criteria for achievement of the top manager KPIs for 2016 and the progress against the KPIs for the purposes of the 2016 annual bonus program
    • previewed and recommended for approval by the Board of Directors the Regulations on Evaluation of the Board of Directors Performance.