Corporate governance

Activities of the Board of Directors

In 2020, the Board of Directors held 32 meetings (3 in person and 29 in the form of absentee voting) and considered 139 items (16 at in-person meeting and 123 at meetings held in the form of absentee voting).

The Board of Directors is governed by the Regulations on the Board of Directors of Rosneft Oil Company.

Matters considered

Board Resolutions in Key Focus Areas

In 2020, the Board of Directors held 32 meetings (3 in person and 29 in the form of absentee voting) and considered 139 items (16 at in-person meeting and 123 at meetings held in the form of absentee voting).

Board Resolutions in Key Focus Areas

Review of the Rosneft–2022 Strategy execution. The Board of Directors noted achievement of most of the Strategy’s key goals for 2020.

Renewal of Rosneft’s Long-Term Development Programme to account for external factors, the independent auditor’s recommendations, the Company’s updated strategic targets and the Programme implementation results in 2019.

Approval of Innovation Development Programme for 2020–2024 with an outlook for 2030 to support Rosneft’s development as a high-tech energy company, ensure its technological leadership in oil and gas production and oil refining, and meet the stringent international environmental and industrial safety standards.

Approval of Rosneft’s business plan for 2020–2021. The document aims to maintain the Company’s production potential and ensure stable financial performance and leadership in unit production costs with due account of the Russian Government’s Directives No. 6883p-P13 dated 4 August 2020 on implementing the OPEC and non-OPEC ministerial meeting’s (ONOMM) decisions setting Rosneft’s oil production level in Russia for the period until May 2022. The Board of Directors took notice of the preliminary results of the business plan performance and normalisation in 2020.

It approved the implementation concept for Vostok Oil, a project to create a new oil and gas province in Russia’s north.

The Board approved the business projects to develop the Suzunskoye and Lodochnoye fields, Erginsky and Chupalsky licence areas, and Russkoye field.

It reviewed the Comprehensive Plan for the Enhancement of the RM&ICS in 2020–2022 and the report on the implementation of the Plan in 2019.

To ensure compliance with the orders of the Russian President and the Russian Government the following items were considered:

  • addressing the impact of COVID-19;
  • reducing crude oil production to provide for Russia’s compliance with the OPEC and non-OPEC ministerial meeting’s decision to that effect;
  • introducing tax monitoring;
  • improving labour productivity;
  • updating Rosneft’s Long-Term Development Programme to reflect the Company’s 2019 results.

Amendments to the terms of Rosneft’s Open Market Share Buyback Programme. To bring it in line with the current market environment, the programme was amended to simplify the buyback procedure.

Evaluation of the independent directors against independence criteria (Gerhard Schroeder, Matthias Warnig, Oleg Viyugin and Hans-Joerg Rudloff).

Self-assessment review of the Board’s performance in 2019 and 2020.

All surveyed Directors, senior executives, and heads of business units praised Rosneft’s Board performance as generally highly effective.

The self-assessment has revealed areas for the Board’s performance improvement and efficiency increase.

To this end and to help maintain strong performance in other areas, the Board approved the Action Plan to Improve the Performance of Rosneft’s Board of Directors that takes into account the 2019 external assessment by Ernst & Young as an independent consultant.

Update of the Succession Plan for Directors and Members of the Management Board to reflect Bank of Russia’s recommendations and the 2019 external assessment of the Board by Ernst & Young. The Plan seeks to guarantee succession in the Company’s management bodies and preserve the Board of Directors and Management Board’s best practices ensuring consistency with the Company’s development strategy.

Rosneft Oil Company’s Regulation on Evaluation of Rosneft Board of Directors Performance.

In 2020, the Board of Directors continued expanding its ESG and sustainable growth agenda. In particular, by vesting the Strategic Planning Committee, which was renamed the Strategy and Sustainable Development Committee, with additional powers to review ESG-related matters, the Board will be able to focus more closely on the Company's green projects.

The following internal documents were approved/amended:

  • Policy on Onshore Oil Production;
  • Policy on Gas Business;
  • Information Security Policy;
  • Working Capital Management Policy;
  • Policy on Internal Audit;
  • Regulations on Rosneft Board Committees.

The following programmes and reports were reviewed/approved:

  • Sustainability Report 2019;
  • reports on the activities of the Board's committees in 2019–2020;
  • Energy Saving Programme for 2020–2024 and report on the programme implementation in 2019;
  • report on the Company's HSE activities in 2019 and preliminary results of 2020;
  • report on the Information Policy implementation in 2020;
  • report on the Innovative Development Programme progress in 2019;
  • reporting on the identification of company-wide financial and operational risks for 2021.

The following documents and criteria related to remuneration were approved:

  • performance indicators of Rosneft's top managers for 2020;
  • normalised KPIs of top managers for the 2019 annual bonus calculation, and their performance and bonus amount for 2019.

The Board of Directors conducted corporate procedures with respect to more than 60 interested party transactions.

Plans for 2021

The Board of Directors approves its work plans and meeting schedule semi-annually.

The work plan takes into account the proposals of members of the Board, executive bodies and top management, and always includes the following matters:

  • oversight of the Strategy performance;
  • reviewing the business plans and results;
  • implementation/revision of Rosneft’s Long-Term Development Programme;
  • approval of management’s collective and individual KPIs;
  • assessment of the Board performance;
  • preparations for the General Shareholders Meetings.

The Company’s Corporate Governance Code defines the list of additional issues that the Board of Directors seeks to consider in person.

The committees of the Board of Directors plan their activities taking into account the schedule of the Board of Directors’ meetings.

Committees of the Board of Directors

The Board of Directors has three committees:

  • Audit Committee;
  • HR and Remuneration Committee;
  • Strategy and Sustainable Development Committee

The committees are set up and their chairs elected at the first meeting of the Board of Directors in its new composition (in 2020, the meeting was held in absentia).

The committees are appointed and perform their functions in accordance with Rosneft Regulations Procedure for Formation and Work of Rosneft Board of Directors Committees

Committees of the Board of Directors

Members of the Audit Committee

Hans-Joerg Rudloff — Chairman
(independent director)

Matthias Warnig
(independent director)

Oleg Viyugin
(independent director)

Members of the HR and Remuneration Committee

Matthias Warnig — Chairman
(independent director)

Hans-Joerg Rudloff
(independent director)

Faisal AlsuwaidiFaisal Alsuwaidi was elected to the Committees on 5 June 2020.

Members of the Strategy and Sustainable Development Committee

Robert Dudley — Chairman

Alexander Novak — Deputy Chairman

Faisal AlsuwaidiFaisal Alsuwaidi was elected to the Committees on 5 June 2020.

Oleg Viyugin
(independent director)

Hamad Rashid Al-Mohannadi