Corporate governance

Corporate structure

TMK is committed to high standards of corporate governance.

Our corporate governance principles are developed in accordance with the general requirements of Russian Law on Joint Stock Companies, other regulatory acts governing the activity of public joint stock companies in Russia, stock exchange listing rules, best Russian and foreign practice and are confirmed in TMK’s Corporate Governance Code adopted in 2011. As a company with shares traded on stock exchanges, we are also guided by the provisions of the Corporate Governance Code approved by the Board of Directors of the Bank of Russia on March 21, 2014.

Corporate Governance Principles:

1. Shareholders are provided with a real opportunity to exercise their rights related to participation in the Company’s equity capital:

- shareholders are provided with reliable and effective methods for recording their share ownership, as well as the possibility to freely and quickly dispose of their shares;
- shareholders have the right to participate in the Company’s management by making decisions on the most important Company issues at general meetings of shareholders;
- shareholders are provided the opportunity to share in the Company's profits;
- shareholders have the right to receive full and reliable information about the Company’s performance on a regular and timely basis;
- the Company ensures equal treatment of shareholders holding an equal number of shares of the same type (category), all shareholders have the opportunity to receive effective protection in case of violation of their rights.
- Shareholders should not abuse the rights granted to them.

2. The Board of Directors carries out strategic management of the Company and effectively controls the activities of the Company’s executive bodies, members of the Board of Directors are accountable to the Company’s shareholders.

- The Board of Directors determines the Company’s development strategy, as well as effectively overseeing the Company’s performance;
- the composition of the Company’s Board of Directors ensures its functions are most efficiently fulfilled;
- Board of Directors meetings are convened regularly in accordance with a dedicated plan and can be held in person or in absentia, depending on the importance of the issues under consideration;
- Board of Directors committees were created to oversee the most important issues related to the competencies of the Board of Directors;
- the Board of Directors ensures and oversees the effectiveness of the Company’s executive bodies.

3. The Company’s executive bodies are able to carry out efficient management of the current activities of the Company reasonably, in good faith, and exclusively in the interests of the Company. The executive bodies are accountable to the Company’s Board of Directors and its shareholders.

- a collegial executive body (Management Board) has been created in the Company. Its responsibilities include solving the most complex issues related to managing the current activities;
- the composition of the Company’s executive bodies ensures the most efficient implementation of the functions assigned to the executive bodies;
- the executive bodies act in accordance with the Company’s financial and business plan;
- the remuneration of the CEO and members of the collegial executive body is consistent with their qualifications and takes into account their real contribution to the results of the Company.

4. The Company provides timely disclosure of complete and reliable information about the Company, including its financial position, economic indicators, ownership and management structure in order to ensure the possibility of informed decisions by the company's shareholders and investors.

5. The Company monitors the use of confidential and insider information.

6. The Company provides effective control over its financial and economic activities in order to protect the rights and legitimate interests of shareholders.

We have approved standards for engagement with our shareholders, the composition and procedures of the Board of Directors, the roles of top managers, information disclosure and financial statements audit. They comply with the recommendations of the Corporate Governance Code approved by the Bank of Russia Board of Directors on March 21, 2014 and recommended by issuers whose valuable securities are admitted to trading on stock exchanges.

We report annually on compliance with the Code (see appendices to TMK's annual reports) and provide quarterly reports on compliance with corporate governance standards on the Moscow Exchange.

Our corporate governance structure is described in relevant provisions in the section “Documents

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