Governing Bodies

General Shareholders’ Meeting

The General Shareholders’ Meeting is the Company’s supreme governing body; its activities are regulated by Russian laws, Rostelecom’s Charter,Version No. 18 was approved by the Company’s AGM on 18 June 2018; Minutes No. 1 dated 20 June 2018. The full text of the new version is available here and here.

In 2018, Rostelecom’s Annual General Shareholders’ MeetingMinutes No. 1 dated 20 June 2018 is available here and here. was held on 18 June, and the Extraordinary General Shareholders’ MeetingMinutes No. 2 dated 26 December 2018 is available here and here. was held on 24 DecemberFor more details on key resolutions passed by the Annual and the Extraordinary General Shareholders’ Meetings see Appendix 2 Governing and Control Bodies (in Russian) to this Annual Report..

The General Shareholders’ Meeting is the Company’s supreme governing body; its activities are regulated by Russian laws, Rostelecom’s Charter,Version No. 18 was approved by the Company’s AGM on 18 June 2018; Minutes No. 1 dated 20 June 2018. The full text of the new version is available here here and here..

In 2018, Rostelecom’s Annual General Shareholders’ MeetingMinutes No. 1 dated 20 June 2018 is available here and here. was held on 18 June, and the Extraordinary General Shareholders’ MeetingMinutes No. 2 dated 26 December 2018 is available here and here. was held on 24 DecemberFor more details on key resolutions passed by the Annual and the Extraordinary General Shareholders’ Meetings see Appendix 2 Governing and Control Bodies (in Russian) to this Annual Report..

Board of Directors

The Board of Directors is a collective governing body responsible for the Company’s grow strategy and general management. The powers of the Board are detailed in the Charter and the Regulations on the Board of Directors Version No. 16 was approved by the Company’s AGM on 18 June 2018; Minutes No. 1 dated 20 June 2018. The full text of the new version is available here and here..

Assessment of the Board of Directors’ performanceFor more details on the assessment of the Board of Directors’ performance see Appendix 2 Governing and Control Bodies (in Russian) to this Annual Report.

In May 2019, the Board of Directors self-assessed its 2018 performance. The self-assessment comprised the overall assessment of the Board of Directors, the assessment of its Committees and each member of the Board in particular, including the Chairman.

In April 2019, an independent consultant, JSC VTB Registrar, assessed the overall performance of the Board of Directors, the performance of its Committees and each member of the Board, including the Chairman. The average score for the Board of Directors’ performance assessment was 4.96 out of 5.

Induction of Board members

We have in place induction procedures for newly elected members of the Board of Directors. New members get familiar with all of the Company’s internal documents regulating the proceedings of the Board, and hold meetings with members of the Management Board as well as internal and external auditors.

Key functions and tasks of the Board of Directors

• Set up and advance business objectives and strategic goals of the Company
• Protect the rights and legitimate interests of shareholders
• Ensure integrity, reliability, and fairness of public information about the Company

Key principles of the Board of DirectorsMake decisions based on reliable information on the Company’s operations

• Ensure the Company’s adherence to long-term interests of its shareholders and receipt by shareholders of all relevant information on the Company’s operations
• Balance the interests of various groups of shareholders and make most objective and well-balanced decisions for the benefit of all shareholders
• Interpret ambiguities in the rules of any laws and regulations in favour of enhancement of the rights and legitimate interests of shareholders

The Board of Directors is annually elected with 11 members. The average age of directors is 50 years and the average tenure of the Company’s directors is 4.3 years. Five committees function under the Company’s Board of Directors.

Membership of the Board of Directors

For detailed biographies of all members of the Board of Directors see Appendix 2 Governing and Control Bodies to this Annual Report.

Qualifications of the Board of Directors

The liability of the Company’s directors was insured for EUR 150 million, with the additional insurance coverage of EUR 920 thousand for independent directors.

No conflicts of interest involving members of the Board of Directors were identified in 2018.

Board of Directors’ and its Committees’ performance report  For more details on voting of members of the Board of Directors and its Committees at the 2018 meetings held in person/in absentia, as well as on the matters discussed at the meetings of the Board of Directors and its Committees see Appendix 7 Information on Meetings of the Board of Directors and Its Committees to this Annual Report.

The Board of Directors held 27 meetings, including 3 in person and 24 in absentee form, 199 matters were discussed.

Board of Directors

Key 2018 results

Approved the following documents:

• Updated PJSC Rostelecom’s Strategy 2022
• New Dividend Policy

Arranged for the first independent assessment of the Board of Directors’ performance.

Delivered on the 2018 tasks within the key strategic projects:

• Bridging the Digital Divide
• Arranging for Video Surveillance and Ensuring the Operation of the Broadcasting Portal during the Elections in Russia
• Providing Internet Access for Hospitals and Out-Patient Clinics
• Launching the Unified Biometric System
• Installing the Sakhalin–Kuril Islands Submarine FOCL.

Plans for 2019

Monitoring the implementation of the overall strategy and strategic projects:

• Digital Economy of the Russian Federation nationwide programme
• 5G deployment
• Data centre network expansion
• Cyber security provision.

Approving the action plan for the Company’s migration to predominantly Russian software.

Updating the Programme for Disposal of Non-Core Assets.

Electing the Management Board.

Audit Committee

Key 2018 results

6 meetings (1 in person), 26 matters

Enhanced the Risk Management Programme.

Monitored the quality of internal controls and audit.

Positively assessed the internal and external audit.

Plans for 2019

Strengthening control over technology risks related to import substitution programmes.

Nomination and Remuneration Committee

Key 2018 results

5 meetings (2 in person), 16 matters

Developed the Long-Term Incentive Programme for 2020–2022.

Plans for 2019

Monitoring the implementation of the Long-Term Incentive Programme.

Reviewing the existing approaches to, and policies on, the remuneration of members of the Board of Directors, executive bodies, and other key executives of the Company.

Strategy Committee

Key 2018 results

7 meetings (4 in person), 8 matters

Developed the updated Strategy 2022 and updated the Long-Term Development Programme accordingly.

Developed the new Dividend Policy.

Based on the recommendations of the Committee, the Company paid out interim dividends for 9M 2018 for the first time.

Plans for 2019

Closer monitoring of M&A transactions, reviewing the efficiency of the acquired asset integration.

Corporate Governance Committee

Key 2018 results

1 meeting in absentia, 1 matter

Reviewed the compliance with the Company’s Information Policy.

Plans for 2019

Monitoring of compliance with the Company’s Information Policy.

Enhancing corporate governance standards.

Investment Committee

No meetings of the Committee were held in 2018.

Corporate Secretary

President and Management Board

The Management Board consists of 9 members, whose average age is 44.2 years. In 2018, 21 board meetings were held, including 20 in person and 1 in absentia. The average tenure of the Management Board is 5.3 years.

Management Board’s performance report

Membership of the Management Board