Committees

The main role of the Committees is to provide assistance to the Board in preparation and adoption of decisions in the respective functional areas, as well as in ensuring a detailed scrutiny of the issues submitted for consideration to the Board of Directors. The Board Committees have considerable procedural powers, have a right to bring in external experts and use other resources of the Corporation.

Sistema PJSFC has five committees of the Board of Directors:

  • Strategy Committee
  • Audit, Finance and Risk Committee
  • Nomination, Remuneration and Corporate Governance Committee
  • Ethics and Control Committee
  • Investor Relations and Dividend Policy Committee

Only members of the Board of Directors may be elected to the Board's Committees, with some rare exceptions. The main role of the Committees is to provide assistance to the Board in preparation and adoption of decisions in the respective functional areas, as well as in ensuring a detailed scrutiny of the issues submitted for consideration to the Board of Directors.

The Board Committees have considerable procedural powers, have a right to bring in external experts and use other resources of the Corporation.

Strategy Committee

The Strategy Committee includes 8 Board members: V. Evtushenkov (Committee Chairman), S. Boev, A. Dubovskov, F. Evtushenkov, D. Iakobachvili, R. Kocharyan, M. Shamolin, R. Sommer.

The Committee discusses and analyzes strategic issues related to the management of the Sistema Group, and monitors the strategic management issues of Sistema PJSFC and its subsidiaries, including the following:

  • reviewing the strategy planning methodology;
  • reviewing of M&A transactions with a value exceeding USD 100 mln;
  • reviewing large investment projects related to entry into new geographies or industries and projects with significant state ownership.

In 2018 the Strategy Committee held 12 meetings where the following areas were reviewed:

  • value creation by the Corporation's investments in various industries and investment projects;
  • investment projects;
  • strategic management and planning system.

Audit, Finance and Risk Committee

The Audit, Finance and Risk Committee includes 5 Board members: R. Munnings (Committee Chairman), A. Belova, J. Krecké, R. Sommer, D. Iakobashvili.

Roger Munnings, the Chairman of the Committee, is an expert in finance and audits and has an extensive experience in the field. J. Krecké also has an extensive background in finance.

The Committee conducts a detailed discussion and analysis of the issues related to managing Sistema in the following areas:

  • facilitiating and supervising the processes of preparing and auditing the Company's financial statements;
  • assessing the quality of audit services based on the audit of Sistema's financial statements and making preliminary recommendations to the Board of Directors with respect to selecting RAS and IFRS auditors;
  • assessing the risk management system and ensuring compliance with applicable legal requirements in financial reporting, audit and planning;
  • provisional appraisal of transactions submitted to the Boards of Directors;
  • budgeting and financial modelling.

In 2018 the Audit, Finance and Risk Committee held 14 meetings at which the following items were reviewed:

  • assessment of the quality of audit services;
  • results of the tender for provision of audit services;
  • recommendations for the Board of Directors on appointing an external auditor;
  • review and approval of the Corporation's quarterly and annual financial statements, annual report, annual budget and report on performance against the budget;
  • review of management's reports on risk management at Sistema, risk maps and mitigation plans;
  • preliminary review of transactions submitted to Sistema's Board of Directors.

Nomination, Remuneration and Corporate Governance Committee

The Nomination, Remuneration and Corporate Governance Committee includes 5 Board members: R. Kocharyan (Committee Chairman), A. Belova, S. Boev, R. Munnings, R. Sommer.

The President of Sistema attends Committee meetings as a permanent invitee and does not vote on matters submitted for consideration of the Committee.

The purpose of the Committee is to facilitate the preparation and implementation of the Corporation's HR policy and to support and develop an efficient corporate governance system that would meet international standards and make it easier to improve the quality of governance processes. The Committee conducts a detailed discussion and analysis of the issues related to managing Sistema in the following areas:

  • preliminary review of candidates:
    • to the Board of Directors of Sistema PJSFC;
    • to the boards of directors of portfolio companies;
    • to senior management positions at the Corporation and its portfolio companies;
    • to the position of the Corporation's Corporate Secretary;
  • development of the incentive and remuneration policy for the employees of the Corporation;
  • organising the procedure of assessment of the Board of Directors' performance.

In 2018 the Nomination, Remuneration and Corporate Governance Committee held 10 meetings at which the following items were reviewed:

  • development of corporate governance at Sistema, including the structural transformation of the Corporate Centre;
  • incentive system, performance assessment and bonuses for key managers and employees of Sistema;
  • HR process and preliminary review of candidates for top management positions at Sistema and nominees for the boards of directors of the key portfolio companies.

Ethics and Control Committee

The Ethics and Control Committee includes 5 Board members: F. Evtushenkov (Committee Chairman), A. Belova, S. Boev, R. Kocharyan, R. Munnings.

The Committee conducts a detailed discussion and analysis of the issues related to managing Sistema in the following areas:

  • forming an efficient system of economic and corporate security;
  • monitoring compliance with the requirements of the Ethics Code of the Corporation;
  • introducing a system for prevention of corruption and fraud and other misconduct related to violations of applicable laws at Sistema Group companies.

In 2018 the Ethics and Control Committee held 8 meetings at which the following items were reviewed:

  • performance of the Internal Control and Audit Department in 2017 and work plan for 2019;
  • results of ethics assessment of the Corporation's employees;
  • compliance system at Sistema
  • system for preventing fraud and corruption at Sistema.

Investor Relations and Dividend Policy Committee

The Investor Relations and Dividend Policy Committee includes 4 Board members: A. Belova (Committee Chairwoman), D. Iakobachvili, J. Krecké, R. Munnings.

The Committee conducts a detailed discussion and analysis of the issues related to managing Sistema in the following areas:

  • strengthening the Corporation's investment case;
  • supporting effective relations with the financial community;
  • developing Sistema dividend policy, including recommendations for the Corporation's Board of Directors with respect to the amount of payable dividends;
  • protection of the rights and interests of Sistema's shareholders.

In 2018 the Investor Relations and Dividend Policy Committee held 5 meetings at which the following items were considered:

  • communications and interaction with minority shaeholders;
  • amount of dividends and dividend policy of the Corporation;
  • the Corporation's charity strategy;
  • market analysis and monitoring, perception of Sistema by the investment community.

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