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Corporate Governance

One hundred per cent of the Company's ordinary shares are owned by the Russian Federation represented by the Federal Agency for State Property Management, whereas preferred shares are included in the Level One Quotation List of the Moscow Exchange and in its unified list of constituents for key indices calculation.

The Company strictly follows the current corporate governance law, provisions of the Corporate Governance Code approved by the Bank of Russia and the Listing Rules of the Moscow Exchange.

The Company seeks to bring its corporate governance system into conformity with the world's best practice and realises that an efficient and transparent relationship between its governing bodies, shareholders, investors and stakeholders will allow it to implement corporate strategic goals and objectives, enhance its goodwill, increase its investment appeal and ramp up capitalisation.

Transneft’s governing bodies include the General Meeting of Shareholders, the Board of Directors, the Management Board and the President, the Revision Commission being the control body. The Company's Board of Directors includes three independent directors; specialised committees function under the Board of Directors.

Transneft’s Corporate Governance System

General Meeting
of Shareholders
Russian Federation (78,55% of the AC; 100% of ordinary shares) Chairman of the
Board of Directors
Board of Directors President Management Board Strategy, Investments and Innovation Committee Human Resources and Remuneration Committee Corporate Governance Department Minority shareholders (21.43% of AC; 99.9% of preferred shares Shares owned by Transneft subsidiaries (0.02% of AC; 0.1% of preferred shares) External independent auditor Revision Commission Audit Committee Department of Internal Audit and Analysis of Core Business Activities Risk Management Council The Risk Assessment Section

Dotted lines represent functional connections, while solid lines stand for administrative subordination

The Company adheres to most key principles reflected in the Corporate Governance Code (CGC) and continues implementing the CGC requirements.

Since the end of 2015, the corporate Risk Management System (RMS) formation process has been underway. The process is coordinated by the Risk Management Council formed by the Management Board. Since early 2017, critical risks have been analysed and their change has been monitored by authorised business units that develop risk management measures and plans.

An internal control system is in place at the Company, called to raise the efficiency of corporate governance and the Company and ensure accuracy of financial statements and compliance with the law. Internal control is exercised, among others, by the Board of Directors, the Audit Committee, the Revision Commission, executive governing bodies and the Company's business units authorised to perform internal control.

Internal audit within the Company is performed by the Department of Internal Audit and Analysis of Core Business Activities.

The functions of the corporate secretary are performed by a specialised business unit: the Corporate Governance Department.

 

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