Performance of the Board of Directors
In 2018, 24 meetings of the Board of Directors were held (4 meetings in person, 20 meetings by absentee voting), 127 issues were reviewed (23 issues in person and 104 at virtual meetings).
Additional initiatives to Rosneft–2022 Strategy have been approved in the field of social development, human resources, environment, regional development, accelerated digitization, and technological capacity development (Digital Rosneft).
The Information Technology Strategy has been approved for 2018–2022 (IT-strategy), defining the focus areas and basic development scenario for the Company’s information technologies, the target model of meeting the demands in the field of information technologies, metrology, automatic process control systems, test instruments, and automatics.
The strategic guidelines and Public statement of the Company - “Rosneft: Contributing to Implementation of UN Sustainable Development Goals” have been approved, and five goals of strategic priority which are directly supported by its core operations have been determined: Good Health and Well-being, Affordable and Clean Energy, Decent Work and Economic Growth, Climate Action, and Partnerships for the Goals.
The Long-Term Development Program has been updated to reflect new strategic guidelines and to review its progress in 2017.
The financial and business plan has been approved, its results have been reviewed and the 2017 plan has been normalized.
Carrying out instructions given by the President of the Russian Federation and the Government of the Russian Federation, the issues have been reviewed in the field of:
- implementing recommendations on managing intellectual property rights and inventory auditing intellectual property rights;
- introducing professional standards into the Company’s operations;
- innovative development;
- compliance with the laws on the procurement of goods, works, and services;
- approval of planning and program-targeted documents on the development of the Far East by the Ministry for Development of the Russian Far East.
Implementation of business projects on developing the Zohr field in Shoruk block (Egypt), the Chupalsky license area, the East Messoyakhsky license area and the Suzunskoye field has been approved.
Compliance of the members of Rosneft’s Board of Directors (Gerhard Schröder, Matthias Warnig, Oleg Vyugin, and Hans-Joerg Rudloff) with the independence criteria has been assessed.
The progress against the Roadmap for Incorporating Key Provisions of the Bank of Russia’s Corporate Governance Code in Rosneft’s operations has been reviewed.
Parameters and layout of the Rosneft’s shares acquisition plan at an open market (share repurchase program) have been approved.
The amendments have been approved or incorporated into the following internal documents:
- the Policy on Anti-Corruption and Prevention of Corporate Fraud;
- the HSE Policy;
- the Policy on the Risk Management and Internal Control System;
- the Regulations on Procurement of Goods, Works, and Services;
- the Regulations on Rosneft’s Audit Committee of the Board of Directors;
- the Regulations on Insider Information;
- the Regulations on the Procedure for communications via Interagency website of State Property Management;
- the Regulations on the Procedure for Managing Conflicts of Interest at Rosneft and Group Subsidiaries.
The following programs and reports have been reviewed/approved:
- the performance reports of the Committees of the Board of Directors in the 2017–2018 corporate year;
- the progress report on the 2017–2021 Energy Saving Program in 2017;
- the progress reports on Non-Core Assets Disposal Program for 2017 Q4 and 2018 Q1-Q3;
- the report on Rosneft’s related party transactions in 2017;
- the reports on the Company’s HSE activities;
- the report on the Company’s internal audit results for 2017 and H1 2018;
- the report on the Company’s compliance with the legislative requirements to countering the misuse of insider information and market manipulation for H2 2017 and H1 2018;
- the progress report on the Company’s Information Policy for 2018;
- the progress report on the Company’s Innovative Development Program for 2017;
- the progress report on the Company’s Risk Management and Internal Control Holistic Development Plan for 2017;
- the progress report on the Action Plan of Introducing Professional Standards in the Company’s Operations as at 1 November 2018.
The following has been approved in the sphere of incentive system:
- 2018 KPIs for Rosneft’s top managers;
- normalized top management KPIs for the purposes of the 2017 annual bonus program, as well as the achievement of these KPIs by top managers and their remuneration in 2017.
Over 150 related party transactions have been approved.
In the reporting year, the self-assessment of the Board of Directors’ performance has been carried out for 2017/2018 corporate year. According to the results of the assessment, the members of the Board of Directors have confirmed their high level of organization and performance in the core activities.
The members of the Board of Directors provided recommendations on the ways to improve certain focus areas of the Board of Directors’ operation, these improvements being recorded in the approved 2019 Improvement Plan of the Board of Directors.
Meetings of the Board of Directors are held on a scheduled basis. The Plan is approved by the Board of Directors semiannually and considers the following matters:
- implementation of the Strategy;
- financial and business plans and results;
- implementation (of results) / updating of the Long-Term Development Program;
- approval of team and individual management KPIs;
- preparations for, and conduct of, the general shareholders meeting.
Strategic matters, which are listed in the Rosneft’s Charter, are discussed by the Board of Directors in person.
An additional list of matters the Board of Directors tends to discuss in person is stipulated by the Rosneft’s Corporate Governance Code.
With due account to the schedule of the Board of Directors’ meetings, the Board Committees shall approve their own action plans.