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Sustainability Report 2013


Corporate governance system

The corporate governance system in Vnesheconombank Group is guided by the best corporate governance practices applied by leading Russian and international financial institutions and development banks. Vnesheconombank has been consistent in its efforts to introduce the uniform standards and corporate procedures across Vnesheconombank Group while contributing to the development of the Group’s organisations in line with the strategic goals applied within the Group.

Governance structure of Vnesheconombank

In line with Federal Law No. 82-FZ “On Bank for Development” dated 17 May 2007, Vnesheconombank’s governing bodies include the Supervisory Board of Vnesheconombank, the Management Board of Vnesheconombank and the Chairman of Vnesheconombank.

The Supervisory Board is Vnesheconombank’s supreme governance body that comprises 8 members appointed by the Russian Government for a 5-year term and the Chairman of Vnesheconombank. The Chairman of the Government of the Russian Federation acts as Chairman of the Supervisory Board.

Meetings of Vnesheconombank’s Supervisory Board are convened by the Chairman of Vnesheconombank’s Supervisory Board or by a member of the Supervisory Board designated by the Chairman of Vnesheconombank’s Supervisory Board as may be necessary, but no more than once per quarter.

The powers of the Supervisory Board:

  • determine the key business areas of Vnesheconombank;
  • approve the regulations on governing bodies, branches and representative offices of Vnesheconombank and approve the Annual Report;
  • approve the financial plan of income and expenditure (budget) of Vnesheconombank;
  • approve the appointment of an auditor for the annual mandatory audit of the Bank’s annual financial statements;
  • appoint the head of the Internal Control Service and dismiss him or her from office before expiry of the relevant term;
  • adopt decisions on issuing Vnesheconombank’s bonds;
  • approve major transactions.

The Chairman of Vnesheconombank

The Chairman of Vnesheconombank provides day-to-day management of Vnesheconombank’s operations and acts as the sole executive body of Vnesheconombank. The Chairman of Vnesheconombank is appointed to this office by the President of the Russian Federation as recommended by the Chairman of the Government of the Russian Federation.

Vnesheconombank’s Management Board

The Management Board acts as Vnesheconombank’s collective executive body. The Management Board comprises the Chairman of Vnesheconombank and 8 members of the Management Board appointed by the Supervisory Board as recommended by the Chairman of Vnesheconombank. The Management Board’s activities are managed by the Chairman of Vnesheconombank.

Vnesheconombank’s Internal Control Service

Vnesheconombank’s Internal Control Service (ICS) is a standalone structural unit of Vnesheconombank. The ICS’ director is accountable to the Bank’s Supervisory Board and directly reports on his or her day-to-day activities to Vnesheconombank’s Chairman. Vnesheconombank ensures that the ICS operates on an ongoing, independent, unbiased and professional basis and that the ICS is able to efficiently perform its functions without any constraints.

ICS’ purposes:

  • contribute to the efficient and sucessful financial and business performance of the Bank;
  • follow up the accounting and reporting for reliability, completeness, fairness and timeliness;
  • follow up compliance by all employees of the Bank with the requirements of legal and regulatory acts of the Russian Federation, other regulatory requirements, and corporate regulatory documents, including those related to its operations in the securities market;
  • on an ongoing basis, follow up (monitor) the operation of the Bank’s internal control system, including as a professional player in the securities market;
  • follow up operations of standalone structural units for efficient risk management and prevention of conflicts of interests between the Bank’s units and/or employees;
  • follow up the implementation of anti money laundering measures.

Vnesheconombank’s collegial working bodies

Vnesheconombank’s collective working bodies (committees) operate on a permanent basis. The key committees include the Committee for Development of Investment Operations, Credit Committee, Asset and Liability Management Committee, and Budget Committee. They prepare recommendations with regard to decisions on the Bank’s core business areas to be adopted by Vnesheconombank’s governing bodies.

The Expert Council

The Expert Council acts as a deliberative and advisory agency of Vnesheconombank that provides an in-depth analysis of Vnesheconombank’s key business areas and prepares proposals on decisions to be made by the Bank’s governing bodies.

Appointments to the Expert Council are subject to approval by Vnesheconombank’s Management Board. The candidates are selected among researchers, employees of research and educational institutions, and representatives of the business community. In 2013, the Expert Council held 3 meetings.

Size of remuneration, allowances and refundable expenses of governing bodies

In 2013, no remuneration, including salaries, bonuses, commission fees, allowances and/or refundable expenses, individual fees payable for involvement in the activities of a relevant governing body, or other types of remuneration were paid to Members of Vnesheconombank’s Supervisory Board.

Remuneration paid to members of Vnesheconombank’s Management Board in 2013
Types of remuneration Amount (RUB thousand)
Salary 150,367.94
The remuneration for 2012 performance was paid in June 2013.Bonuses 113,245.10
Financial aid 1,150.00
Commission fees 0
Allowances and/or refundable expenses 0
Standalone fees payable for involvement in the activities of a governing body 0
Other types of remuneration 0

Development of the governance system in Vnesheconombank Group

In its relations with subsidiaries, Vnesheconombank sets the following strategic goals:

  • build a robust governance system in subsidiary banks and entities aligned with the best corporate standards;
  • implement the development priorities of the group of subsidiary banks, including measures to enhance the bank’s performance in line with the existing development strategies;
  • provide legal support to corporate governance in subsidiaries and set unified requirements for Vnesheconombank and the Group’s entities.

In 2013, Vnesheconombank Group took a number of measures to improve its corporate governance system:

  • made the necessary changes to the regulations on collective governing bodies of Vnesheconombank as part of improvements to the corporate regulatory framework;
  • developed and launched systems for preparation of materials for meetings of Vnesheconombank’s collective governing bodies in soft copy, including the remote access;
  • took measures to improve and automate the system for following up the compliance with instructions given by Vnesheconombank’s collective governing bodies;
  • held an away training workshop “Supporting Activities of Collective Governing Bodies of Vnesheconombank and Its Subsidiaries” that was attended by more than 100 employees of Vnesheconombank’s structural units, subsidiary banks and entities, the Department of Economics and Finance of the Russian Government and the Russian Ministry of Economic Development;
  • in exchange of experience in corporate governance, organised a training workshop “Preparing Materials for Meetings of Collective Governing Bodies” for representatives of Prominvestbank in Kiev, Ukraine;
  • representatives of Vnesheconombank participated in a number of international hands-on workshops and conferences on corporate governance organised by global development banks and professional corporate governance associations;
  • in order to maintain a high level of awareness of Vnesheconombank Group’s staff, issued an updated version of the information brochure “Regulatory Documents Governing the Activities of Vnesheconombank’s Collective Governing Bodies”.

In 2013, to further improve the governance system in the Group, Vnesheconombank focused on developing the strategic governance system in subsidiary banks. Vnesheconombank prepared a unified development strategy structure and format for subsidiary banks and individual recommendations on the contents of strategy sections depending on specific operations of each bank. This format was used to develop strategies for all subsidiary banks of the Group.

The performance of subsidiary banks was assessed using a system of key performance indicators (KPI) that consist of corporate and individual KPI of members of the banks’ management boards associated with their areas of responsibility, thus increasing the motivation of subsidiary banks’ management in achieving the agreed goals.

In 2013, to enhance the efficiency of subsidiary banks’ management, the banks were connected to an automated management reporting system “Module for Collection, Verification and Analysis of Reports by Subsidiary and Related Banks”. The system improves the document exchange with subsidiary banks and allows promptly informing Vnesheconombank’s management of the banks’ performance.

In 2013, in developing its management system, Vnesheconombank Group focused, among other things, on expanding the relations between the Group’s entities to achieve synergy and enhance the Group’s performance. A Customer Marketing Division was set up within the Subsidiary Banks Department to align the credit and customer relations policies of subsidiary banks, prevent intra-group competition, and boost the volumes and profitability of subsidiary operations. Proposals on promoting products of subsidiary banks to Vnesheconombank’s entities and customers were also prepared to maximise income accumulation within the Group.