JSC IDGC of the North-West considers the corporate governance system, first of all, as an instrument of the human rights protection and observance of shareholders' interests. The mission of the efficient corporate governance is to decrease the investment risks and the cost of the debt capital, increase the investment attractiveness and shareholder value of the Company, and strengthen the commercial goodwill.
The fundamental requirements of the Corporate Code of Conduct recommended by Regulation No. 421/р of the Federal Commission on the Securities Market of Russia of April 4, 2002, the Corporate Code of Conduct of JSC IDGC of the North-West in a new revision and best practices of corporate government underlie the corporate governance principles of JSC IDGC of the North-West:
- Accountability
The Code determines the accountability of the Company's Board of Directors to all the shareholders in accordance with the current legislation of the Russian Federation and serves as guidelines for the Board of Directors during the strategy making, management and control over the implementation of the activity of the Company's executive bodies.
- Justice
The Company is obliged to protect the shareholders' rights and ensure equal concern to all shareholders. The Board of Directors provides all the shareholders with the right to get efficient protection in case of any violation of their rights.
- Transparency
The Company ensures the timely disclosure of accurate information on its activity, including its financial position, social and ecological indicators, performance, property structure and management of the Company as well as provides a free access to such information to all the interested persons.
- Responsibility
The Company recognizes the rights of all the interested persons determined by the current legislation of the Russian Federation and is aimed to cooperate with such persons in order to ensure its development and financial stability.
All the principles mentioned above are implemented by JSC IDGC of the North-West in practice. In particular, they regulate the composition of the Board of Directors, committees of the Board of Directors, functions of the chairman of the Board of Directors, Director General, members of the Management Board, determine the leading role of the Board of Directors in formation of the Company's development strategy and creation of the Internal Audit and Risk Management Administration, regulate the issue of financial statements, including statements prepared in accordance with the International Financial Reporting Standards (IFRS) and publication of annual reports, and cover many other issues.
The Company tends to improve its corporate governance using positive experience of other companies, monitoring the latest changes of the legislation of the Russian Federation and the leading standards in this sphere, as well as making corresponding corrections to its corporate governance system.
Corporate Governance Improvement
In 2012 a preliminary assessment by the HR and Remuneration Committee of nominees for members of the Board of Directors was implemented for the purpose of provision of objective information on nominees for members of the Board of Directors to participants of the General Meeting of Shareholders and compliance with independence requirements of the Company's Corporate Code of Conduct.
The Company extended disclosure of information in English, for example, in the course of preparation of the General Meetings of Shareholders in 2012 information in English was available to shareholders for review within the period set by resolution of the Board of Directors of the Company for provision of information in Russian (30 days).
The Board of Directors of the Company reviewed the results of assessment of the efficiency of activities of the Company's Board of Directors and approved proposals for optimization of corporate governance practice made with regard to results of assessment of the efficiency of activities of the Company's Board of Directors, passed a resolution on expediency of annual assessment of efficiency of activities of the Company's Board of Directors which will enable the Company to review the dynamics of assessment results.
Holding meetings of the Board of Directors via video conference was widely practiced which resulted in the increase in the number of meetings held in presence, from three in 2011 to 6 in 2012. In the future it is planned to hold in-presence meetings of the Board of Directors and committees of the Board of Directors on the most topical issues relating to the Company's activities.
It is planned to create a portal of electronic document flow of activities of the Company's Board of Directors and Committees of the Board of Directors, the use of which will allow for optimization of the process of preparation of meetings of the Board of Directors and Committees of the Board of Directors of the Company.
The Company recognizes the importance of corporate governance development for the purpose of assurance of efficiency of the Company's activities of increase of its investment attractiveness so it plans to perform assessment of the quality and level of corporate governance.