The major functions of the Board of Directors include resolving matters of general management of the Company's activities, determination of strategy and priority trends of the Company's development, supervision over the activities of the executive bodies, and implementation of the objective assessment of the Company's financial standing. The powers of members of the Board of Directors are quite wide enabling them to influence considerably on activities of JSC IDGC of the North-West. This determines the high level of responsibility of members of the Board of Directors JSC IDGC of the North-West members to shareholders and the Company for decisions they make. The accountability to the shareholders is one of the generally accepted principles of the corporate governance realized in the practical activity of JSC IDGC of the North-West.
The Articles of Association and internal documents of IDGC of the North-West specify a number of regulations describing the activity of the Board of Directors from the point of view of the Corporate Governance Code observance, in particular:
- powers of the Board of Directors concerning the quarterly and annual assessment of the financial condition of the Company are defined;
- the accountability principle of the executive body to the Board of Directors is being implemented, including through the inclusion of issues of election and early termination of powers of Director General to the competence of the Board of Directors;
- the responsibility of the members of the Board of Directors to refrain from any kind of activities which can lead to a conflict between their interests and the interests of the Company, the obligation to inform the Board of Directors in case of occurrence of such a conflict as well the obligation to refrain from voting on respective issues are set forth;
- meetings of the Board of Directors should be held at least once in six weeks;
- in order to increase the efficiency of activities of the Board of Directors, the right of its members to require and timely receive qualitative and complete information on the Company's activities, including information containing commercial secret, is provided;
- inclusion of independent directors in the composition of the Board of Directors contributes to its balanced state in terms of possibilities for exercising rights and considering interests of all the shareholder groups.
The cumulative voting used in election of the members of the Company's Board of Directors makes it possible to introduce the representatives of minority shareholders into its structure in accordance with the structure of the Company's property and to consider the interests of all general categories of shareholders.
Procedural matters relating to activities of the Company's Board of Directors are controlled by the Regulations of JSC IDGC of the North-West for the Procedure of Convening and Holding of the Board of Directors' Meetings.
Report of the Board of Directors on Results of Development of JSC IDGC of the North-West by Priority Activity Areas
Determination by the Board of Directors of the Company's development strategy, assurance of effective control over financial and business activities and accountability of the Board of Directors to the General Meeting of Shareholders are implemented by approval by the Board of Directors of priority activity areas of JSC IDGC of the North-West and making by the Board of Directors decisions on the most important issues relating to the performance of financial and business activities.
In the reporting year the Board of Directors of JSC IDGC of the North-West developed the Plan of Actions for Implementation of IDGC Holding Development Strategy till 2015 and prospectively till 2020 in the Company. It was prepared with an active participation of representatives of minority shareholders whose proposals were taken into account in the final version of the Plan.
The Plan of Actions was preliminary reviewed by the Strategy and Development Committee of the Board of Directors and then approved at the in-presence meeting of the Board of Directors. The Board of Directors made a decision to review the report on the course of implementation of the Plan twice a year.
In order to determine the Company's development areas in the field of information technology, automation and telecommunications on the basis of the analysis of the current level of development and automation of key business processes of the Company and its compliance with best international practice and standards, the Company's Strategy in the Area of Information Technology, Automation and Telecommunications for the period until 2016 was approved. The Company's Plan of Actions for Implementation of the Strategy for 2012 was developed and approved.
The Board of Directors determined the following priority activity areas:
- switch to regulation of tariffs for electricity transmission services using the return on investment capital method (RAB), including filing applications to tariff regulating authorities within the period set forth by the Board of Directors;
- development and implementation of the Program for Investment Development of JSC IDGC of the North-West;
- assurance by the Company of a set level of reliability and quality of rendered services in accordance with relevant legal acts;
- implementation of a construction management system for major investment projects;
- carrying out activities for registration of titles to real estate properties and registration/re-registration of titles to land plots;
- carrying out a mandatory energy inspection of the Company in accordance with legal requirements of the Russian Federation;
- implementation of a production asset management system;
- making amendments to the system of key performance indicators for Director General and top managers of the Company.
In its meetings in 2012 the Board of Directors reviewed, inter alia, matters reflecting the results of the Company's development by priority activity areas.
One of the key elements of financial security of the Company's activities is the setting of fair tariffs for the Company's services which, in particular, can be achieved by using the return on investment capital method (RAB) in regulating tariffs. At the moment, this method is used for the said purposes in regions where four out of seven of the Company's branches operate.
In the reporting year implementation of a set of organizational measures continued, including interaction with executive authorities of constituent entities of the Russian Federation in the area of state regulation of tariffs in order to switch to the RAB-regulation of tariffs in the regions of operation of the three remaining branches of the Company.
In order to extend the use of scientific and innovative developments on electric grid facilities of the Company for the purpose of increasing the level of reliability of equipment operation, the Program for Investment Development of JSC IDGC of the North-West providing for R&D expenses was developed and approved. In the reporting year the Board of Directors reviewed the report on implementation of the Program on a quarterly basis, approved the adjusted Program for Investment Development of JSC IDGC of the North-West for 2012-2016.
The quality and reliability of services rendered by the Company are two of the key indicators of effective performance of the Company. In 2012 the Board of Directors at one of its meetings reviewed the Company's annual information on indicators of reliability and quality of the services rendered by the Company's branches which are subject to tariff regulation on the basis of long-term parameters of regulation of activities and proposals on planned values of reliability and quality indicators for 2012-2017.
The construction management system for major investment projects minimizes the decision-making process for each separate facility and enables to determine a specific person responsible for organization of construction production stages and full completion of the entire set of operations. In order to improve the capital construction management process the Company realizes the Plan of Actions for Implementation of the System which is performed using the examples of pilot projects outlined in the list of major investment projects. The report on realization of the Plan is presented to the Board of Directors for review.
The unconditional necessity and the high degree of relevance of carrying out activities for registration of titles to real estate properties and registration/re-registration of titles to land plots make this activity area one of the priority ones. The Company prepared the Program of Activities in the said area for 2011-2014. In 2012 the Board of Directors reviewed the Director General's Report on Implementation of the Program in 2011. In the future a similar report will be presented to the Board of Directors for review based on results of each year of the Program's operation.
In accordance with Article 16 of Federal Law No. 261-FZ on Energy Saving and Energy Efficiency Enhancement and Amending Certain Legislative Acts of the Russian Federation of November 23, 2011 an energy inspection of JSC IDGC of the North-West as an entity transmitting electric energy is mandatory.
The Company's Board of Directors approved the Plan of Actions required for carrying out the mandatory energy inspection of production and business facilities as well as electric grid facilities of JSC IDGC of the North-West and reviewed reports on its implementation on a quarterly basis.
In the 4th quarter of 2012 the implementation of the Plan of Actions was completed in full. Based on the results of the mandatory energy inspection the Company obtained an energy passport.
In order to ensure an optimal management of expenses, risks and productivity of assets (equipment) during the entire life cycle and achievement of target performance indicators, the Company implements the production asset management system. The Board of Directors approved the Plan-Schedule of Actions for Implementation of the Production Asset Management System and the Production Asset Management Standard of JSC IDGC of the North-West and reviewed reports on realization of the Plan-Schedule on a quarterly basis.
In order to achieve the goals set by the IDGC Holding Development Strategy till 2015 and prospectively till 2020 the Board of Directors approved the System of KPEs for Director General and top managers of the Company prepared with regard to opinions of minority shareholders.
The approved system of KPEs with the increased number of indicators, which takes into account all important aspects of the Company's activities, is aimed at achievement of the Company's long-term goals, increase of control over activities and additional motivation of Director General and top managers of the Company. In accordance with the resolution of the Board of Directors the system of KPEs was introduced from March 1, 2013.
Furthermore, during the year the Board of Directors constantly paid its attention to other significant matters:
- business planning, including preparation and approval of the investment program for one year and in the mid-term;
- long-term development of electricity metering systems in the retail electricity market in distribution networks of the Company;
- energy saving and increase of energy efficiency of the Company, including carrying out a mandatory energy inspection of production, business and electric grid facilities of the Company;
- purchasing policy and innovative activities;
- HR policy and corporate management;
- approval of transactions, approval of internal documents and risk management.
Information on the composition of the Board of Directors
The quantitative composition of the Board of Directors is determined by the Articles of Association and accounts for 11 members.
Due to the fact that a corporate year is a period between the dates of two consecutive Annual General Meetings of Shareholders and in the view of the early termination of powers of members of the Board of Directors of the Company in 2012 and election in the extraordinary General Meeting of Shareholders of a new composition of the Board of Directors, the Board of Directors of the Company worked in three different compositions in the reporting period.
From June 17, 2011 to June 21, 2012 the composition of the Board of Directors included: A.V. Demidov (Chairman), T.P. Dronova, V.V. Inozemtsev, A.M. Kukhmay, A.V. Korshunov, M.Y. Kurbatov, A.V. Kurochkin, A.A. Popov, S.Y. Remes, R.A. Filkin, T.V. Shevchenko.
From June 22, 2012 to August 28, 2012 the Board of Directors worked in the following composition: A.V. Demidov (Chairman), T.P. Dronova, A.Y. Katina, A.V. Korshunov, A.V. Kurochkin, A.E. Murov, A.A. Popov, A.M. Pyatigor, S.Y. Remes, R.A. Filkin, T.V. Shevchenko.
The current members of the Board of Directors of JSC IDGC of the North-West were elected in the extraordinary General Meeting of Shareholders of the Company held on August 28, 2012.
The members of the Board of Directors have considerable managerial and industrial experience. The following members were re-elected to the Board of Directors of the Company, thereby ensuring succession: Seppo Ykha Remes, Tatiana Petrovna Dronova, who are reputable specialists in the energy area and make valuable contribution to activities of the Board of Directors and its Committees. Minority shareholders' interests are presented in the Board of Directors by Roman Alexeevich Filkin, Co-Director of the Representative Office of Prosperity Capital Management (RF) Ltd., and Denis Victorovich Kulikov, Executive Director of the Association for Protection of Investors' Rights.
The balanced professional composition of the Board of Directors allows for creation of an objective opinion on discussed matters which, in the end, contributes to the strengthening of shareholders' and investors' trust in the Company.
The members of the Board of Directors actively participate in activities of the Committees of the Board of Directors of the Company.
| Full name | Status in the Board of Directors | Audit Committee | HR and Remuneration Committee | Strategy and Development Committee | Technological Connection Committee | Reliability Committee |
|---|---|---|---|---|---|---|
| A.E. Murov | Chairman of the Board of Directors | |||||
| V.V. Ageev | Member of the Board of Directors | Member of the Committee | Member of the Committee | |||
| D.O. Akhrimenko | Member of the Board of Directors | Member of the Committee | Member of the Committee | |||
| A.A. Bashindzhagyan | Member of the Board of Directors (public sector employee) | Member of the Committee | ||||
| V.A. Goncharov | Deputy Chairman of the Board of Directors | Member of the Committee | Chairman of the Committee | |||
| T.P. Dronova | Member of the Board of Directors | Member of the Committee | Member of the Committee | Chairman of the Committee | ||
| D.V. Kulikov | Member of the Board of Directors | Member of the Committee | Member of the Committee | |||
| D.L. Pankov | Member of the Board of Directors | Member of the Committee | Member of the Committee | Chairman of the Committee | Member of the Committee | |
| S.Y. Remes | Member of the Board of Directors | Chairman of the Committee | Member of the Committee | |||
| O.B. Trishkin | Member of the Board of Directors | |||||
| Member of the Board of Directors | Member of the Board of Directors | Member of the Committee | Member of the Committee | Member of the Committee |
The Current Composition of the Board of Directors
Andrey Evgenievich Murov (Chairman of the Board of Directors)
Date of the first election to the Board of Directors of the Company: June 21, 2012.
Elected as Chairman of the Board of Directors on September 19, 2012.
Born in 1970.
In 1993 he obtained a diploma of higher education upon graduation from the Saint-Petersburg State University, majoring in Legal Science, qualified as a lawyer. Doctor of economic sciences.
From 2007 to 2012 he worked as Director General of JSC Pulkovo Airport. In 2012 he was appointed Deputy Director General of JSC IDGC Holding. At the moment he is First Deputy Chairman of the Management Board of JSC FGC UES and Executive Director of JSC IDGC Holding.
Currently he is a member of management bodies of the following organizations: Chairman of the Board of Directors of JSC Lenenergo, JSC IDGC of Volga, JSC IDGC of the Center; member of the Boards of Directors of JSC Kubanenergo, JSC Moscow Unified Electric Grid Company.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Valery Anatolievich Goncharov (Deputy Chairman of the Board of Directors)
Date of the first election to the Board of Directors of the Company: February 28, 2012.
Elected as Deputy Chairman of the Board of Directors on September 19, 2012.
Born in 1963.
In 1987 he obtained a diploma of higher education upon graduation from the Order of Lenin Leningrad Shipbuilding Institute, majoring in Equipment Engineering, qualified as an electrical and mechanical engineer. Doctor of economic sciences.
From 2006 to 2012 he worked as First Deputy Director of Roszheldorsnab branch of JSC Russian Railways and in 2012 as Director General of JSC Roszheldorproekt. Since 2012 until now he has been working as Deputy Chairman of the Management Board of JSC FGC UES and Deputy Executive Director for Investment Activities of JSC IDGC Holding.
From 2006 to 2012 he worked as First Deputy Director of Roszheldorsnab branch of JSC Russian Railways and in 2012 as Director General of JSC Roszheldorproekt. Since 2012 until now he has been working as Deputy Chairman of the Management Board of JSC FGC UES and Deputy Executive Director for Investment Activities of JSC IDGC Holding.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Valery Valentinovich Ageev
Date of the first election to the Board of Directors of the Company: June 29, 2007.
Date of the last reelection to the Board of Directors of the Company: February 28, 2012.
Born in 1966.
In 1998 he obtained a diploma of higher education upon graduation from the North-West Correspondence Polytechnic Institute, majoring in Industrial Electronics, qualified as an engineer.
Since 2006 until now he has been working as Director General of Main Electric Grids of the North-West branch of JSC FGC UES.
Currently he is a member of management bodies of the following organizations: member of the Board of Directors of JSC Lenenergo.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Dmitry Olegovich Akhrimenko
Date of the first election to the Board of Directors of the Company: February 28, 2012.
Born in 1977.
In 1998 he obtained a diploma of higher education upon graduation from the Kiev National Economic University, in 2000 he graduated from the Russian Legal Academy, in 2002 — from the Diplomatic Academy of the Ministry of Foreign Affairs of Russia.
Since 2008 until now he has been working as Deputy (from June 2012 First Deputy) Head of the Corporate Governance and Interaction with Shareholders Department of JSC IDGC Holding.
Currently he is a member of management bodies of the following organizations: Chairman of the Board of Directors of JSC Real Estate of Siberian Energy Scientific and Research Center, member of the Boards of Directors of JSC North-West Energy Management Company, JSC Dagestan Energy Selling Company.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Astkhik Artashesovna Bashindzhagyan
Date of the first election to the Board of Directors of the Company: June 21, 2012.
Born in 1990.
In 2011 she obtained a diploma of higher education upon graduation from the State University of Management, majoring in Organization Management, qualified as a manager.
From 2010 to 2011 she worked as a sales manager and specialist in dealing with agents in LLC GorKom. From 2011 to 2012 she was a chief expert in the group for interaction with the Ministries and Administrations of the RF of the Corporate Government Service of JSC Far-East Energy Management Company. Since 2012 until now she has been working as a Chief Expert of the Corporate Governance Division of the Department of Corporate Governance, Pricing Structure and Control and Revision Work in industries of the fuel and energy complex of the Ministry of Energy of Russia.
Currently she is a member of management bodies of the following organizations: member of the Boards of Directors of JSC Yantarenergo, JSC Sibirenergoremont, JSC IDGC of Volga.
She did not hold any shares in JSC IDGC of the North-West in 2012 nor did she perform any transactions with securities of the Company during 2012.
Tatiana Petrovna Dronova
Date of the first election to the Board of Directors of the Company: June 10, 2009.
Born in 1954.
Higher education, graduated from Finance Academy under the Government of the Russian Federation, majoring in Finances and Credit, qualified as an economist.
From 2001 to 2008 worked in the electric energy sector at JSC Mosenergo in the position of the Chief Accountant, was a member of the Management Board of JSC Mosenergo.
Since 2008 until now has been Deputy Director General for Strategy and Development of CJSC Energosoyuz Investment Holding.
Currently she is not a member of management bodies of any organizations.
She did not hold any shares in JSC IDGC of the North-West in 2012 nor did she perform any transactions with securities of the Company during 2012.
Denis Victorovich Kulikov
Date of the first election to the Board of Directors of the Company: June 24, 2010.
Born in 1975.
In 2005 he obtained a diploma of higher education upon graduation from the Moscow State Law Academy, qualified as a lawyer.
Since 2001 until now he has been working as Executive Director of the Association for Protection of Investors' Rights.
Currently he is a member of management bodies of the following organizations: member of the Boards of Directors of JSC IDGC of the Center, JSC WGC-2, JSC VEROFARM.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Dmitry Leonidovich Pankov
Date of the first election to the Board of Directors of the Company: February 28, 2012.
Born in 1971.
In 1993 he obtained a diploma of higher education upon graduation from the V.I. Lenin Ivanovo State Energy University, majoring in Electric Energy Systems and Grids, qualified as an electrical engineer.
From 2007 to 2011 he worked as Director for Operation and Repairs of JSC IDGC of the Center.
From 2011 until now he has been working as Director for Strategy, Development and Innovations of JSC IDGC Holding.
Currently he is a member of management bodies of the following organizations: Chairman of the Board of Directors of JSC Scientific, Research and Testing Center of IDGC.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Remes Seppo Yukha
Date of the first election to the Company's Board of Directors: December 9, 2004.
Born in 1955.
In 1984 he graduated from University of Oulu (Finland), economist. In 1994 graduated from the Higher School of Business Economy and Management (Finland), candidate of economic sciences.
Since 2008 until now has been working as the Director General of Kiuru Ltd.
Currently he is a member of management bodies of the following organizations: member of the Board of Directors of: JSC IDGC Holding, JSC Lenenergo, JSC IDGC of Volga, JSC Sollers, JSC Sibur Holding, JSC RAO Energy System of East, Association for Protection of Investors' Rights, Chairman of the Board of Directors of EOS Russia.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Oleg Borisovich Trishkin
Date of the first election to the Board of Directors of the Company: February 28, 2012.
Born in 1964.
In 1989 he obtained a diploma of higher education upon graduation from the M.I. Kalinin Order of Lenin Leningrad Polytechnic Institute, majoring in Electric Systems, qualified as an electrical engineer. Candidate of economic sciences.
From 2008 to 2011 he worked as a chairman of the Committee for Energy and Engineering Support of the Government of Saint-Petersburg. Since 2011 until now he has been working as Director of the Scientific and Research Institute of Energy at the Saint-Petersburg State Polytechnic University.
Currently he is not a member of management bodies of any organizations.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Roman Alexeevich Filkin
Date of the first election to the Board of Directors of the Company: June 16, 2011.
Born in 1983.
In 2005 he obtained a diploma of higher education upon graduation from the Finance Academy under the Government of the Russian Federation, majoring in Finances and Credit, qualified as an economist.
Since 2009 until now he has been working as Co-Director at the Representative Office of Prosperity Capital Management (RF) Ltd. (electric energy, machine building).
Currently he is a member of management bodies of the following organizations: member of the Board of Directors of JSC IDGC of the South, JSC IDGC of the Center, JSC IDGC of the Center and Volga Region, JSC Territorial Generating Company No. 6, JSC Kurganmashzavod, JSC Smolensk Energy and Repair Company, JSC Dalenergomontazh, JSC Energospecmontazh.
He did not hold any shares in JSC IDGC of the North-West in 2012 nor did he perform any transactions with securities of the Company during 2012.
Statistical information on activities of the Board of Directors in 2012
In 2012 31 meetings of the Board of Directors of the Company were held, 6 of them were in presence. Compared to 2011 the number of meetings held increased by 11 (or by 50%) and the number of in-presence meetings grew twice.
Information on participation of members of the Board of Directors in meetings is laid out in the table below:
| Name | Participation In-presence/External | Participation % |
|---|---|---|
| From January 1, 2012 to June 21,2012 (total number of meetings — 13) | ||
| A.V. Demidov (Chairman) | 3/9 | 92.3 |
| T.P. Dronova | 3/8 | 84.6 |
| V.V. Inozemtsev | 3/10 | 100 |
| A.M. Kukhmay | 3/10 | 100 |
| A.V. Korshunov | 2/6 | 61.5 |
| M.Y. Kurbatov | 2/7 | 69.2 |
| A.V. Kurochkin | 3/10 | 100 |
| A.A. Popov | 3/9 | 92.3 |
| S.Y. Remes | 3/10 | 100 |
| R.A. Filkin | 3/8 | 84.6 |
| T.V. Shevchenko | 3/10 | 100 |
| From June 21,2012 to August 28, 2012 (total number of meetings — 7) | ||
| A.V. Demidov (Chairman) | 1/6 | 100 |
| T.P. Dronova | 1/4 | 71.4 |
| A.Y. Katina | 1/6 | 100 |
| A.V. Korshunov | 1/2 | 42.9 |
| A.V. Kurochkin | 1/6 | 100 |
| A.E. Murov | 1/6 | 100 |
| A.A. Popov | 1/6 | 100 |
| A.M. Pyatigor | 1/6 | 100 |
| S.Y. Remes | 0/5 | 71.4 |
| R.A. Filkin | 1/4 | 71.4 |
| T.V. Shevchenko | 0/6 | 85.7 |
| From August 28, 2012 to December 31, 2012 (total number of meetings — 11) | ||
| A.E. Murov (Chairman) | 2/9 | 100 |
| V.V. Ageev | 2/9 | 100 |
| D.O. Akhrimenko | 2/9 | 100 |
| A.A. Bashindzhagyan | 2/8 | 90.9 |
| V.A. Goncharov | 2/9 | 100 |
| T.P. Dronova | 1+1/7 | 81.8 |
| D.V. Kulikov | 2/9 | 100 |
| D.L. Pankov | 1+1/9 | 100 |
| S.Y. Remes | 1/6 | 63.6 |
| O.B. Trishkin | 1/5 | 54.5 |
| R.A. Filkin | 2/9 | 100 |
In 2012 the Board of Directors reviewed 251 matters (206 in 2011), among them:
21 matters of strategy, investment policy, innovative activities, energy efficiency and energy saving;
29 matters relating to planning, financial statements, internal control policy and risk management;
65 matters relating to Director General Reports by activity areas;
40 corporate governance matters;
33 matters of approval of transactions;
17 matters of approval of internal documents;
10 HR policy matters;
7 matters of corporate governance of subsidiaries and dependent entities;
5 purchasing policy matters;
24 other matters in accordance with the competence of the Board of Directors.
Out of the 251 matters reviewed in the meetings productive decisions were made on 241 matters (96%) and the review of 10 matters (4%) was adjourned. 134 matters were resolved unanimously (53.39%):
Peculiarities of the voting process in meetings of the Board of Directors in 2012:
- Unanimously (on average) — 53.39% (134 matters);
- Non-unanimously (on average) — 46.61% (117 matters).
- «For» — 2,272 votes (82.29%).
- «Against» — 27 votes (0.98%).
- «Abstained» — 125 votes (4.52%).
- Absent in the meeting — 326 votes (11.81%).
- Did not participate in voting in accordance with legal requirements — 11 votes (0.4%).