Report of the Board of Directors on the Development of the Company and the Rosseti Group in Areas of Priority
In 2023, the Board of Directors paid special attention to the Company’s development in the areas of priority.
Areas of Priority
Key Issues and Solutions
Strategy
The progress report on the approved Long‑Term Development Programme of the Company and the achievement of key performance indicators was considered.
The results of the implementation of the concept of development of charging infrastructure for electric transport are considered.
The results and plans aimed at import substitution at the Rosseti Group were reviewed.
The Quality Policy of the Rosseti Group was approved.
Quarterly progress reports on the Company’s investment projects included in the Comprehensive Plan for Modernisation and Expansion of Backbone Infrastructure until 2024 were reviewed.
Draft amendments to the Company’s Investment Programme for 2020–2024 was approved.
The progress report on the Company’s Innovative Development Programme was approved.
Planning and control over business activities
Progress reports on the Company’s business plan and IFRS consolidated business plan for the Federal Grid Company — Rosseti Group of companies were reviewed.
The Company’s business plan for 2024 and forecasts for 2025–2028 were approved.
The key indicators of business plans for 2024–2028 of subsidiaries and affiliates of PJSC Rosseti engaged in electricity transmission activities are reviewed.
The Company’s report on the results of work on capital markets and interaction with rating agencies was reviewed.
The internal auditor’s assessment report on the implementation of the non‑core asset disposal programme and the action plan for the disposal of non‑core assets were reviewed.
Procurement reports were reviewed.
Risk management, internal control and internal audit
The Risk Management and Internal Control Policy of PJSC Rosseti and S&As (the Rosseti Group) and the Internal Audit Policy of PJSC Rosseti were approved.
The internal auditor’s reports on the assessment of the efficiency of risk management and internal control systems of PJSC Rosseti and the Rosseti Group for 2022 were reviewed.
The internal auditor’s report on the fulfilment of the work plan and performance results for 2022, including the results of the internal quality assessment of PJSC Rosseti’s internal audit activities were reviewed.
The preferred risk appetite of the Rosseti Group, as well as the report on key operational risks of PJSC Rosseti for 2022 was approved.
Sustainable development
Internal documents in the field of sustainable development were approved:
Sustainable Development Policy
Climate Policy
Anti‑Corruption Policy of PJSC Rosseti and S&A of PJSC Rosseti.
The results of the anti‑corruption monitoring of the Rosseti Group were reviewed.
The Report on Social Responsibility and Corporate Sustainability of PJSC Rosseti for 2022 was approved.
Corporate governance
The Corporate Secretary’s quarterly reports and the annual report on compliance with the Information Policy were reviewed.
A new version of the Information Policy was approved.
The results of the self‑assessment of the performance of the Board of Directors of PJSC Rosseti and Committees of the Board of Directors of PJSC Rosseti for 2022 were reviewed.
The report of the Company’s internal auditor on the assessment of corporate governance efficiency at PJSC Rosseti in the Rosseti Group based on the results of the 2022/2023 corporate year was reviewed.
Performance Results of the Board of Directors in 2023
In 2023, the Company’s Board of Directors held 36 meetings and reviewed 156 questions.
Since the Board of Directors of the Company operates on a prearranged schedule, the most significant matters were discussed during in‑person meetings. In 2023, four meetings were held in the form of joint attendance. The agendas of in‑person meetings included no more than five questions, which encouraged substantive discussion and the evaluation of various viewpoints during the decision‑making process.
The rest of the meetings were held in absentia and included issues, on which decision‑making is possible without the joint presence of the Board of Directors members.
Statistical data regarding the activities of the Board of Directors
Categories of matters reviewed by the Board of Directors
Attendance of the Board of Directors and Committees of the Board of Directors in 2023
Full Name
Board of Directors
Investment Committee
Strategy Committee
Personnel and Remuneration Committee
Audit Committee
Persons who served on the Board of Directors throughout 2023:
Director 2‑5
34/36Did not participate in the voting in accordance with clause 18.10 of Article 18 of the Articles of Association of PJSC Rosseti, pursuant to which the votes of members of the Company’s Board of Directors who are simultaneously members of executive bodies shall not be taken into account when resolving an issue under subparagraph 38 of paragraph 15.1 of Article 15 of the Articles of Association of PJSC Rosseti
94.4%
Director 2‑10
36/36
100%
100%
100%
100%
Personsresigned from the Board of Directors in 2023In the period from 1 January 2023 to 21 March 2023, the Board of Directors of the Company held eight meetings.:
Director 1‑1
6/8
75%
Director 1‑11
8/8
100%
100%
100%
Director 1‑10
6/8
75%
100%
100%
Director 1‑2
7/8Did not participate in the voting in accordance with clause 18.10 of Article 18 of the Articles of Association of PJSC Rosseti, pursuant to which the votes of members of the Company’s Board of Directors who are simultaneously members of executive bodies shall not be taken into account when resolving an issue under subparagraph 38 of paragraph 15.1 of Article 15 of the Articles of Association of PJSC Rosseti
87.5%
Director 1‑3
8/8
100%
Director 1‑4
7/8Did not participate in the voting in accordance with clause 18.10 of Article 18 of the Articles of Association of PJSC Rosseti, pursuant to which the votes of members of the Company’s Board of Directors who are simultaneously members of executive bodies shall not be taken into account when resolving an issue under subparagraph 38 of paragraph 15.1 of Article 15 of the Articles of Association of PJSC Rosseti
87.5%
Director 1‑5
7/8Did not participate in the voting in accordance with clause 18.10 of Article 18 of the Articles of Association of PJSC Rosseti, pursuant to which the votes of members of the Company’s Board of Directors who are simultaneously members of executive bodies shall not be taken into account when resolving an issue under subparagraph 38 of paragraph 15.1 of Article 15 of the Articles of Association of PJSC Rosseti
87.5%
100%
Director 1‑6
7/8
87.5%
100%
100%
Director 1‑8
5/8
62.5%
100%
Personsjoined the Board of Directors in 2023In the period from 22 March 2023 to 31 December 2023, the Board of Directors of the Company held 28 meetings.:
Director 2‑1
28/28
100%
Director 2‑9
28/28
100%
100%
100%
Director 2‑2
25/28
89.3%
Director 2‑3
27/28
96.4%
Director 2‑11
27/28
96.4%
100%
100%
100%
Director 2‑4
28/28
100%
Director 2‑6
28/28
100%
Director 2‑7
27/28
96.4%
Director 2‑8
28/28
100%
Skills sets and Diversification of the Composition of the Board of Directors
The Company’s Board of Directors is elected to consist of 11 members in compliance with the Company’s Charter. This number of Board members is in line with industry practice and also allows:
Balancing the members in terms of professional expertise, experience and business skills of the directors
Organising the proper work of the Committees the directors sit on
Ensuring high efficiency of the Company’s governance bodies
Due to the inclusion of the Company in the special list approved by Executive Order of the Government of the Russian Federation No. 91‑r dated 23 January 2003, nomination of candidates to the Board of Directors of the Company shall be made in accordance with the Executive Order of the Government of the Russian Federation.
The selection and evaluation of candidates who may be nominated to the Board of Directors of the Company shall be performed by the Commission of the Federal Agency for State Property Management (Rosimushchestvo) for the selection of independent directors and representatives of the interests of the Russian Federation for election to the government and control bodies of joint stock companies pursuant to the proposals of the Ministry of Energy of Russia and PJSC Rosseti. Herewith, potential candidates undergo a preliminary survey and assessment, including in terms of required experience, knowledge, business reputation and absence of a conflict of interest.
In 2023, candidates to stand for election to the Board of Directors of PJSC Rosseti were nominated by the Company’s major shareholder pursuant to Russian Government Order No. 392‑r dated 17 February 2023. The composition of the Board of Directors is balanced in terms of the key skills sets required for effective and continuous service on the Board of Directors. Members of the Board of Directors have skills in strategic management, corporate governance, corporate finance, risk management, accounting, power industry, as well as sustainability and ESG.
The Board of Directors of PJSC Rosseti includes three independent directors, while the Audit Committee and the Personnel and Remuneration Committee are composed mainly of independent directors, which complies with the requirements of the regulatory documents and Listing Rules of the PJSC Moscow Exchange. Candidates to the Board of Directors shall be elected based on their personal and business qualities, as well as their compliance with the independence criteria as set out in the Listing Rules of the PJSC Moscow Exchange.
When composing the Board of Directors of the Company, the following criteria shall be taken into account:
High level of experience, knowledge, business qualities and business reputation of Board members
Election of at least three independent directors, as well as one representative of NPP Market Council Association, to the Board of Directors
Number of executive directors, not exceeding 25% of the total number of Board members
Structure of the Board of Directors by age, status and period of service
Period of service on the Company’s Board of Directors, %
Structure of the Board of Directors by age, %
Structure of the Board of Directors by status
Competencies and industry‑specific experience of the members of the Board of Directors of the Company
Information on skills set and industry‑specific experience is based on the processing of information received from candidates to the Company’s Board of Directors during the questionnaire survey.
Competencies and industry‑specific experienceRating Scale. Expert — 3 points. Has experience — 2 points. Has a general idea — 1 point.
