Efficiency and accountability: Our management structure

The structure of Bank Vozrozhdenie management is regulated through internal documentation and complies fully with the legislation of the Russian Federation on joint stock companies.

The highest management body is the General Meeting of Shareholders, matters within whose competence include, among other things, approval of internal documents, regulating the activity of the Bank’s bodies, approval of transactions that are provided for in the current legislation, election of members of the Board of Directors.

The Board of Directors conducts general management of the Bank’s activities during periods between the General Meetings of Shareholders. The Board of Directors is engaged in strategic management, defines the fundamental principles and the approach to organising a system of risk management and internal controls, and controls the activities of the management bodies of the Bank.

For ensuring effective operational management, the Board of Directors elects a corporate executive body — the Management Board of the Bank, headed by the Chairman of the Management Board. The Management Board is responsible for realisation of the Bank’s strategy and policies, defined by the General Meeting of Shareholders and the Board of Directors. The Chairman of the Management Board manages the current activities of the Bank.

Corporate governance of Bank Vozrozhdenie is focused on a number of issues:

  • Assignment of responsibilities between the management bodies
    • Observance of collegiate principles in decision-making regarding the conduct of transactions, including those bearing credit risks
    • Improvement of the procedures of accountability of the management bodies to the Board of Directors
  • Organisation of the activities of the Board of Directors, including those in the spheres of collaboration with the management bodies of the Bank
    • Improvement of the procedure of self-assessment and the criteria for assessment of the activities of the Boardof Directors
    • Insurance policies relating to the responsibility of members of the Board of Directors and the management bodies
  • Definition and approval of the Bank’s strategy and control over its realisation (including a system of planning, risk management and internal controls).
  • Management of the Bank’s risks
    • Controlling, from the perspective of the Board of Directors, the realisation of a plan of action, developed in accordance with the risk management strategy
    • Regular communication of the joint risk level and the results of stress-testing to the Board of Directors
    • Approval by the Board of Directors of any changes made to the strategy of risk management and any internal regulations on risk management
  • Prevention of conflicts of interest between shareholders, members of the Board of Directors and management bodies of the Bank, the employees, creditors, investors and clients
  • Definition of rules and procedures that ensure compliance with principles of professional ethics
  • Disclosure of information about the Bank

Structure of Corporate Governance

General Meeting of Shareholders

The Bank ensures equal participation of all shareholders in meetings. Shareholders are provided with information and materials necessary for taking decisions on issues included in the agenda. Those who own at least 2% of voting shares are entitled to submit issues for inclusion in the agenda and nominate candidates to the Board of Directors and the Audit Commission.

The Bank conducts an annual General Meeting of Shareholders with the purpose to provide opportunity to all shareholders to sum up and discuss the results of financial and operating activities. In the period between annual meetings, extraordinary General Meetings of Shareholders can be held, the decision on convocation of which is adopted by the Board of Directors on its own initiative, on demand of the Audit Commission, the auditor or shareholders holding not less than 10% of the voting shares of the Bank.

Notice of the date, place and time for the General Meeting of Shareholders, and also about the form of the meeting and the agenda is given by placing the information on the website of the Bank not later than 30 calendar days before the meeting date, and through a publication in the printed edition of newspaper “Izvestia”.

Board of Directors

The Board of Directors is a management body of the Bank responsible for providing general direction for the Bank’s activity, formation of its strategy, control over financial and business activities, the activities of the executive bodies of the Bank, and for the protection of shareholders’ rights.

In accordance with the Russian law on joint stock companies, the members of the Board of Directors are elected during the annual General Meeting of Shareholders until the next annual or extraordinary General Meeting of Shareholders of the Bank (in the instance that the agenda for an extraordinary meeting contains an item on the election of the new Board of Directors).

At the beginning of 2013, the Board of Directors consisted of 12 people, elected at the annual General Meeting of Shareholders held on June 29, 2012. In accordance with the decision of the AGM held on June 28, 2013, a new member was elected to join the Board of Directors - the Head of the Corporate Department Mr. Sergey Malinin. Mr. Yuri Marinichev left the Board of Directors. Other members of the Board of Directors were re-elected for a further term.

The Board of Directors is chaired by Mr. Dmitry Orlov.

The work of the Board of Directors is conducted in accordance with the Plan of work of the Board of Directors of the Bank, developed on the basis of the Plan of measures of improving corporate governance in the Bank (approved at the meeting of the Board of Directors held on August 23, 2013, minutes #3).

Independent Directors

The criteria of independence of members of the Board of Directors are defined in the Articles of Association and comply with the code of corporate conduct recommended by the FCSM of the Russian Federation, and the requirements of MICEX stock exchange, where the shares of the Bank are listed. According to the Articles of Association, the Board of Directors shall include not less than three independent members who meet the following requirements:

  • are not at the date of election and have not within the three years preceding the election, been officials or employees of the Bank
  • are not officers of another company, where any official of the Bank is a member of the nomination and remuneration committees of the Board of Directors
  • are not close relatives of an official of the Bank
  • are not affiliated with any officials of the Bank
  • are not affiliated with the Bank (except through membership in the Board of Directors)
  • are not parties to commitments of the Bank, in accordance with which they could acquire assets, the value of which is ten or more percent of their total annual income, except for the receipt of remuneration foli participation in the activities of the Board of Directors of the Bank

  • are not a major counterparty of the Bank
  • have not been members of the Board of Directors for over 7 years
  • are not representatives of the state

In the reporting period there were 6 independent directors:

  • Oleg Lapushkin
  • Vladimir Malinin
  • Nikita Mikhalkov
  • Vladimir Panskov
  • Yuri Poletaev
  • Mukhadin Eskindarov

In 2013, 11 ordinary and 2 extraordinary meetings of the Board of Directors were held. In the framework of regular meetings, matters associated with the approved Plan of work of the Board of Directors were considered, including approval of the financial plan (Budget) for the year, review of the implementation of the plan and other regular reporting, approval of internal documents, establishment of limits on the authority of the Management Board relating to products bearing credit risk. During the reporting year 96 items were discussed.

The extraordinary meetings of the Board of Directors were devoted to the approval of the Policy of the Bank on the management and monitoring of liquidity and approval of a transaction bearing credit risk, between the Bank and the individual borrower, due to the fact that the amount of the transaction exceeded the established limit of the power of the Management Board on providing credit products.

It should be noted that in order to increase the efficiency of the Board of Directors work, a self-assessment is conducted on an annual basis and a report on the performance of its resolutions is considered.

Management Board

Operational management of the activities of Bank Vozrozhdenie is conducted by the Management Board, formed by the Board of Directors. The Management Board is responsible for the implementation of the objectives, strategy and policy of the Bank, as determined by the General Meeting of Shareholders and the Board of Directors. The competence of the Management Board includes decision making on issues of everyday operations of the Bank that require collegiate approval.

Currently, the Management Board consists of 11 members. In 2013, Mrs. Tatiana Gavrilkina, and Mrs. Alla Novikova left the Management Board.

During the course of the year there were 83 Management Board meetings, at which the following matters were discussed: preliminary consideration of the financial plan (budget) of the Bank for the year and a regular review of progress of performance to the financial plan, approval of internal documents, determination of the necessary authority to make decisions on operations bearing credit risk, approval of transactions bearing credit risk, approval of property transactions, approval of tariffs and products, consideration of reports on securities, risk and internal control, formation of committees, commissions, councils, formation (or dissolution) of internal divisions, and other matters connected with daily management of the Bank.

Internal Control System

The Bank’s internal control system ensures identification, prevention and limitation of financial and operational risks, as well as identification of violations in the activities of the executive management bodies of the Bank.

The Audit Committee of the Board of Directors coordinates the system of control over the daily financial and economic activities of the Bank.

The Audit Commission, elected by the General Meeting of Shareholders, is responsible for controlling the financial and economic activities of the Bank in accordance with the current legislation and the Articles of Association.

Monitoring of the internal control system is undertaken by the Internal Control and Audit Service (ICAS) that also assists the management bodies of the Bank in ensuring the effective functioning of the Bank.

ICAS is an independent body responsible to the Board of Directors. The work of ICAS is conducted without any involvement of management bodies, divisions, officers or employees, who are not direct employees of ICAS. The management of the Bank has no right or authority to restrict or prevent any internal audit activities conducted by the Service. The Head of ICAS, on his own initiative, reports to the Board of Directors on issues arising from the implementation of the activities of the Service, and makes proposals for their resolution. He also discloses the same information to the Management Board and the Chairman of the Management Board of the Bank.

The following aspects of activity are controlled:

  • control by the management bodies over the compliance of the Bank with legislation on joint stock companies and the Articles of Association
  • control of the system of risk management and measurement of the level of risks
  • control over the distribution of authority when conducting banking activity
  • control over flows of information and information security
  • control of the system of counteracting the legalisation of criminal proceeds, and the financing of terrorism
  • control of compliance of the Bank’s activities as a professional participant of the securities market with the legislation and regulations of the Bank of Russia

Bank Vozrozhdenie defined ensuring compliance of the internal control system with the scale of conducted operations, and the elimination of violations, identified by the members of the control bodies in the course of reviews of the units of the Bank as its key priorities for 2013.

It is important to emphasise, that the internal control system allows for the identification, analysis and minimisation of additional risk factors arising from escalation of external factions.

In total, as part of the routine work of the internal control system of Bank Vozrozhdenie, 33 complex reviews of branches of the Bank and 5 complex reviews of the internal divisions of the Head Office were conducted in 2013.

System of the Bank’s internal control

Audit Commission and Auditor

Members of the Audit Commission shall be elected at the General Meeting of Shareholders for a period until the next ordinary General Meeting. The Audit Commission consists of 4 people who cannot be members of the Board of Directors or members of the Management Board of the Bank.

An audit of the financial and economic activity of the Bank by the Audit Commission is conducted prior to the release of the results of the Bank’s activity for the year and also at any other time on the decision of the General Meeting of Shareholders, Board of Directors, at the request of a shareholder (or shareholders) of the Bank holding at least 10% of voting shares or on their own initiative in accordance with the approved plan.

In addition, for the purposes of the annual audit and confirmation of the reliability of the annual financial statements and their compliance to Russian accounting standards and international financial reporting standards, the Bank appoints an independent auditor, not connected through interests with it or its shareholders. The Bank also ensures the participation of representatives of the auditor at the annual General Meetings of Shareholders. The outcomes of consideration of the auditor’s opinion are prepared by the Audit Committee and are presented at the AGM for the shareholders. The auditor is elected by the General Meeting of Shareholders on the proposal of the Board of Directors. Since the founding of the Bank in 1991, its auditor has been PricewaterhouseCoopers Audit (before 1999 “Coopers & Lybrand” CJSC).

Risk Management

The development of the risk-management system of the Bank in 2013 was managed in accordance with the Board of Directors approved risk management Strategy, developed with consideration for recommendations of the Bank of Russia and the Basel Committee on Banking Supervision.