Severstal Annual Report 2015 Home > Governance > Corporate Governance Statement

Corporate Governance Statement

Severstal’s Board of Directors and management are committed to the creation of shareholder value and meeting the expectations of all its stakeholders to practice sound corporate governance. We remain strongly committed to ensure the highest international and national standards of corporate governance.

Severstal’s corporate governance system underwent major changes in preparation for the company’s London listing at the end of 2006. Severstal is determined to continue developing and evolving its corporate governance practices.

What are the governance initiatives we have implemented at Severstal?

Our corporate governance evolution is strengthened by the processes and procedures that we have put in place, including:

  1. Separating the roles of Chairman and CEO,
  2. Putting in place a Senior Independent Director,
  3. Having a Board of ten members – 50 per cent of the Board are Independent Non-Executives in accordance with the Russian and UK Corporate Governance Codes,
  4. An Audit Committee consisting of three members, all of whom are Independent Non-Executives,
  5. A Remuneration and Nomination Committee consisting of Independent Non-Executives and chaired by the Senior Independent Director,
  6. A Health, Safety and Environmental Committee,
  7. The introduction of the Company’s Corporate Governance Code,
  8. The adoption of the Company’s new Charter, Regulations on Board Committees, Dividend Policy, Corporate Secretary Regulations, and,
  9. The instigation of insider dealing regulations.

The following initiatives further complement the above processes:

  1. Quarterly statements of Internal Audit and Risk Management to the Audit Committee prepared on the basis of International Standards for the Professional Practice of Internal Auditing,
  2. A policy of information transparency (Severstal complies with the applicable laws of the Russian Federation and international corporate governance standards and ensures a high level of interaction between all company shareholders, the Board of Directors and management),
  3. The participation of the independent Auditor in all the meetings of the Audit Committee, as well as separate private meetings between the Auditor and Audit Committee members and its Chairman,
  4. Separate regular meetings of Independent Directors with the Board Chairman and with the CEO,
  5. A formal annual evaluation of the Board’s performance at both internal and external levels, and,
  6. Non-scheduled site visits by Board members.

Which corporate governance codes do we observe?

Severstal continues to follow the provisions of:

  1. The Severstal Corporate Governance Code (2015) – available on www.severstal.com,
  2. The UK Corporate Governance Code (2014) – available on www.frc.org.uk, and,
  3. Recommendations from the Corporate Governance Code (2014) approved by the Central Bank of Russia (CBR) and recommended for application by the joint stock companies with listed securities – available on www.cbr.ru/eng/.

What corporate governance principles are we adhering to?

Severstal’s Corporate Governance Code has been prepared following the recommendations of the Code of Best Practice, as set out in section one of the Financial Reporting Council’s Code on Corporate Governance, and is based on the following main principles:

  • A solid commitment to full alignment with shareholders’ interests,
  • A unified, well-shaped business structure supported by a focused corporate strategy,
  • A disciplined merger and acquisition strategy supported by a qualified majority of Board members,
  • A reliance on a stable, deep-rooted and incentivised management team,
  • Industry-leading disclosure practices and transparent corporate reporting, and,
  • A solid platform for delivering superior, long-term returns to all our shareholders.

Along with the Corporate Governance Code and Charter of the company, the activities of Severstal’s management and supervisory bodies, as well as internal activities, are also governed by a set of internal corporate documents, including:

  • General Shareholders Meeting Regulations (2006),
  • Board of Directors Regulations (2014),
  • Board Committees Regulations (2014),
  • Internal Audit Commission Regulations (2006),
  • General Director Regulations (2006), and,
  • Insider Information Regulations (2014).

The full set of the company’s documents is available online on www.severstal.com. All principles and rules presented in the company’s documents are compliant with the UK Corporate Governance Code (2014). Severstal has a ‘standard listing’ for its depository receipts on the London Stock Exchange.

In addition, Severstal complies with the Russian corporate governance law requirements and meets the corporate governance mandatory requirements of MICEX for Russian listed companies. In April 2014 the Moscow Exchange transferred Severstal’s listing from Quotation List ‘B’ to the Quotation List ‘A’ of the First Level, which demands higher requirements in corporate governance, transparency, disclosure and liquidity of the stocks.

Severstal is a member of the Russian Institute of Directors, the leading expert and resource centre for corporate governance, established by the largest Russian companies to develop, incorporate and monitor standards of corporate governance in Russia.

How are we structured in order to ensure good, strong governance?

1 Audit Committee members: Alun Bowen (Chairman), Philip Dayer, Vladimir Mau
2 Remuneration and Nomination Committee members: Sakari Tamminen (Chairman), Philip Dayer, Alun Bowen
3 Health, Safety and Environmental Committee members: Philip Dayer (Chairman), Alexey Mordashov, Vadim Larin, Vladimir Lukin, Alexander Auzan

Governance calendar for 2015

Overall calendar of General Meetings of Shareholders, in-person Board meetings and Board committees’ meetings are shown below:

Severstal governing bodiesJanFebMarAprMayJunJulAugSepOctNovDec
AGM    V       
EGM        V  V
In-person Board V V  V  V  
Audit Committee V V  V  V  
Remuneration and Nomination Committee V    V  V  
Health, Safety and Environmental Committee      V  V  
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