Page 58-59 - MMK annual report 2011

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/ 2011 /
Social Sphere
Sales Markets
About Us
Corporate Governance
Corporate Governance Objectives:
MMK maintains high standards of corporate governance. The company’s strong governance, combined
with its solid financial performance, makes it a reliable partner for investors.
The overall objective of MMK’s corporate governance is to increase the Company’s value while balancing
the interests of all stakeholders.
The Company seeks to achieve this objective by:
1. Protecting the rights and interests of all shareholders;
2. Ensuring transparency of information on the Company’s activities;
3. Establishing a governance structure to support the Company's strategic management, as well as to
oversee and ensure accountability of the management;
4. Building trusted relations with all key stakeholders including shareholders, suppliers, customers and
MMK’s corporate governance guidelines and procedures are set out in the Company’s Corporate
Governance Code (posted on MMK’s official website:
internal_documents/code_of_corporate_governance, as approved by the Board of Directors on 21
September 2001.
In 2011, MMK’s Charter was revised and supplemented as follows:
The governance structure was changed. The Company does not have a collective executive body in the
form of a Management Board. The governance structure includes the General Shareholders’ Meeting,
Board of Directors and the Individual Executive Body (General Director).
The criteria for determining Directors’ independence are in accordance with the UK Corporate
Governance Code.
Certain responsibilities were shifted from the General Director to the Board of Directors. The Board’s
responsibilities now include adoption of resolutions on transactions exceeding 0.3% of the book value of
the Company’s assets, and approval of the Company’s organizational chart.
Due to amendments to the Federal Law “On Joint Stock Companies” coming into effect, the dividend
payment period was changed. Previously annual dividends were paid by the end of the year, while
interim dividends were paid within 180 days of the decision to pay the dividends. According to new
provisions, dividends are to be paid to all shareholders at the same time and within 60 days of a
resolution by the shareholders’ meeting to pay dividends.
The number of Audit Committee members was changed from 3 to 12.
The Charter states that the Head of the Audit Committee is accountable to the Board of Directors.
To enhance operations further, the Company also adopted a Code of Business Ethics, approved by the
Board of Directors on 17 July 2009. The Code of Business Ethics and other corporate bylaws can be found
on the Company’s website at:
The General Shareholders’ Meeting is the supreme governance body.
The Board of Directors is in charge of managing the Company’s activities (except for matters for which
the General Shareholders’ Meeting has responsibility), and it is also responsible for overseeing the
implementation of resolutions adopted by the Board of Directors or General Shareholders’ Meeting.
The Individual Executive Body, which is the Company’s General Director, is in charge of the Company’s
day-to-day operations.
In accordance with Russian legislation and international standards, an independent Auditor and the
Audit Committee supervise the Company’s financial and economic activities.
MMK’s Corporate Governance Rating
In July 2011, the consortium of the Russian Institute of Directors and Expert RA Rating Agency increased
MMK's corporate governance rating to 8 (on a scale of 1-10), indicating “advanced corporate governance”
in accordance with the National corporate governance scale. MMK was considered to observe relevant
corporate governance legislation, while also adhering to most recommendations of the Russian Code of
Corporate Conduct and being in line with many aspects of best international corporate governance practice.
General Shareholders' Meeting
Board of Directors
Единоличный исполнительный орган -
Генеральный директор
for Nominations
and Remuneration
for Strategic
and Corporate
for Audit
BoD Members
(10 members including 5
Independent Directors )
of the Board of Directors
Individual Executive Body
– General Director