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Improving the Corporate Governance Practices

On 21 March 2014, the Board of Directors of the Central Bank of Russia (CBR) approved the Corporate Governance Code. Application of the CBR Code by a company is voluntary and aimed at increasing its investment appeal for investors.

Drawing attention to the importance of having effective corporate practices in place, the Government of the Russian Federation has instructed that companies where the government owns an interest, included in the 91-r list, as a priority should make an analysis and suggest a roadmap for implementation of the CBR Code’s recommendations.

Certain provisions of the CBR Code are made mandatory to comply with through requirements stipulated in Listing Rules of CJSC Stock Exchange MICEX as applicable to companies listed on the Moscow Stock Exchange after passing the listing procedures.

On 13 March 2015, the Board of Directors of Rostelecom reviewed and approved the roadmap submitted by the management for the implementation of the Corporate Governance Code in the Company’s activities.

Rostelecom is among leading companies with state participation, which should be the first to demonstrate their better governance through further improvements of their corporate practices.

Key corporate governance improvements in 2015 are as follows:

  • informing the shareholders of the date of compiling a list of persons entitled to participate in the Annual General Meeting at least 7 days before the list compilation date;
  • expanded disclosures on certain issues on the agenda of the Annual General Meeting on results of 2014 were adopted in the process of the meeting preparation and holding;
  • shareholders were able to elect four independent directors to the Board of Directors at the Annual General Meeting in 2015 who were meeting criteria set out by the Code and Listing Rules of Moscow Stock Exchange, thus allowing Audit and Nomination and Remuneration Committees to include independent directors only;
  • a meeting of the Board of Directors may be convened at the request of a shareholder(s) holding 2 or more percent of voting shares of the Company;
  • most important matters of concern to the Company should only be considered at physical presence meetings;
  • в procedure of evaluating the Board of Director’s was added to the Company’s Charter and Regulations on the Board Of Directors.