The Board of Directors has three standing committees: Audit Committee, Nomination and Remuneration Committee and Strategy Committee.
The committees have been formed in compliance with the Corporate Governance Code of PAO TMK, which specifically requires that the Audit Committee and the Nomination and Remuneration Committee include independent directors only or, if reasonably impossible, independent directors and non-executive directors only.
In 2015, the composition of the Strategy Committee changed as Anatoly Chubais was elected its member and Alexander Shiryaev stepped down. The composition of other committees remained unchanged.
|Board of Directors||Audit
|(40 meetings)||(7 + 1 joint meetings)||(5 meetings)||(3 + 1 joint meetings)|
|D. Pumpyanskiy (Chairman)||40|
|A. Shiryaev||40||2 (2)*|
*Bracketed figures denote the number of meetings of a Director who was simultaneously a member of the Board of Directors and a member of the relevant committee.
|Peter O’Brien||Chairman of the Audit Committee, independent director|
|Mikhail Alekseev||Member of the Audit Committee and Chairman of the Nomination and Remuneration Committee, independent director|
|Igor Khmelevskiy||Member of the Audit Committee, non-executive director|
All functions of the Committee are listed in the Regulations on the Audit Committee of PAO TMK. The full text is available on the Company’s website athttps://www.tmk-group.ru/media_ru/files/51/pol_kom_aud2015.pdf.
Each Committee member has knowledge and experience required to perform their duties. Peter O’Brien, Chairman of the Audit Committee, and Mikhail Alekseev, Member of the Audit Committee, comply with the Russian Corporate Governance Code recommendations for the reporting review and assessment competencies.
Performance of the Committee was assessed as part of a broader assessment of the Board of Directors by an independent external auditor. According to the auditor’s opinion, the Committee’s performance has improved over the past few years, and key priorities on the annual agenda are properly addressed.
Ten meetings were held in 2015 and between 1 January 2016 and 31 March 2016, including one joint meeting with the Strategy Committee. Members of the Committee also had several meetings with the head of the Internal Audit Department and the leader of the external audit team, held without participation of the Company’s executives.
In 2015 and between 1 January 2015 and 31 March 2015, the Audit Committee’s principal activities included the following:
The Committee heard reports of the chairmen of the Revision Committee, Internal Audit Department, Risk Management Committee and Committee on Regulating Compliance Risks reporting to the CEO.
The Committee reviewed the following key matters regarding the preparation and audit of TMK’s FY 2015 and interim consolidated and separate accounting (financial) statements:
Following the review of external audit results, the Audit Committee concluded that the audit had been carried out to professional standards.
The Audit Committee gave a positive assessment of the current risk management and internal control framework.
The Audit Committee reviewed PAO TMK’s financial statements prepared under the Russian accounting (financial reporting) standards together with the auditor’s opinion and recommended that the Board of Directors submit the annual accounting (financial) statements for approval at the Annual General Meeting of Shareholders.
|Mikhail Alekseev||Chairman of the Nomination and Remuneration Committee and member of the Audit Committee, independent director|
|Sergey Papin||Member of the Nomination and Remuneration Committee, non-executive director|
|Robert Mark Foresman||Member of the Nomination and Remuneration Committee, independent director|
The Nomination and Remuneration Committee seeks to create a favourable environment for the engagement of qualified personnel in the Company’s governance and incentives for their efficient performance, as well as to streamline the corporate governance system and align it with international best practices.
1The revised versions of the Regulations on the Nomination and Remuneration Committee and the Regulation on the Corporate Secretary were approved by the Board of Directors in the first quarter of 2016.
Additionally, the Committee presented to the Board of Directors recommendations on electing the Chairman and members of the Board and its Committees for the 2015/2016 corporate year, as well as on the affirmation of the CEO’s authority for a new period and on electing the members of the Management Board.
The Committee carried out comprehensive assessment of the corporate governance framework and outlined its development objectives. The Committee’s recommendations aided the Board of Directors in making well-balanced decisions supported by effective implementation and control tools.
In the reporting period, the Committee followed the approved Regulations on the Nomination and Remuneration Committee and the Action Plan, which was duly amended on an as-needed basis to match the Company’s priorities.
The Committee meetings were regularly attended by TMK’s top executives and top managers, which facilitated efficient communication and resulted in more thought-out and constructive recommendations.
|Alexander Shokhin||Chairman of the Strategy Committee, independent director|
|Oleg Schegolev||Member of the Strategy Committee, independent director|
|Anatoly Chubais||Member of the Strategy Committee, non-executive director|
The Strategy Committee’s duties are to develop recommendations on the Company’s business priorities and its growth strategy and present these to the Board of Directors.