RU

6.

CORPORATE GOVERNANCE











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issues were considered at the Board physical and teleconference meetings held in 2016

6.1

Corporate governance system

BOARD OF DIRECTORS OF THE RUSSIAN EXPORT CENTER AS OF 31 DECEMBER 2016

Chairman of the Board of Directors

  • Igor I. Shuvalov
    First Deputy Vice Prime Minister of the Russian
    Federation
  • Maksim A. Akimov
    First Deputy Head of the Russian Government
    Executive Office
  • Andrey R. Belousov
    Presidential Aide
  • Sergey N. Gorkov
    Vnesheconombank Chairman
  • Denis V. Manturov
    Minister of Industry and Trade of the Russian
    Federation
  • Maksim S. Oreshkin
    Minister of Economic Development of the
    Russian Federation
  • Anton G. Siluanov
    Minister of Finance of the Russian Federation
  • Petr M. Fradkov
    CEO of the Russian Export Center

CEO of the Russian Export Center

  • Petr M. Fradkov

6.2

Corporate social responsibility

In 2016, REC Group developed the concept of corporate social responsibility (CSR). Its main objective is to assist the export-oriented operations of Russian organizations in providing the positive input in the economic, social and environmental spheres. The concept of CSR sets out the top-priority lines of activities in this area in accordance with the best global practices and standards.

TOP-PRIORITY LINES OF REC GROUP’S CSRЦ

DEVELOP RESPONSIBLE FINANCING PRACTICES
  • Include the following elements in the project of due diligence as required by the Recommendations of the OECD Council on Common Approaches for Environmental and Social Due Diligence (the Common Approaches): 1) environmental impact; 2) social impact and human rights.
  • In the environmental and social due diligence use a combination of the World Bank Safeguard Policies (10) and IFC Performance Standards (8)
CREATE PROFESSIONAL ENVIRONMENT IN FOREIGN ECONOMIC ACTIVITY
  • Raising awareness
  • Educational project
RESPONSIBLE BUSINESS PRACTICES
  • Compliance with the Russian and international law
  • Fair purchasing
  • Anti-corruption
  • Code of Conduct
  • Client Service Regulation
ENVIRONMENTAL IMPACT MANAGEMENT
  • Green Office program
  • Control over paper consumption, electronic document flow
  • Separate collection and recycling of waste
  • Control over water and energy consumption
  • The Group’s core business does not have a direct impact on the environment
RESPONSIBLE EMPLOYMENT PRACTICES
  • Compliance with labor regulations and ILO recommendations
  • Investments in human capital development
  • No discrimination
CHARITY AND VOLUNTEERING
  • Compliance with labor regulations and ILO recommendations
  • Investments in human capital development
  • No discrimination

In pursuance of promoting the practices of responsible financing and by reason of its willful efforts to comply with international standards applicable to export lending, the Company regularly assesses the social and environmental impacts from the export projects. Indeed, when assessing the environmental and social impact from the export transactions, the REC Group relies on the Recommendations of the OECD Council on Common Approaches for Environmental and Social Due Diligence (the Common Approaches).

STAKEHOLDER ENGAGEMENT

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The REC Group is guided by the principle of transparency and actively cooperates with the stakeholders and also takes into account their requests and interests in its operations.

REC Group’s key stakeholders

Stakeholders Interests
Exporters Financial and non-financial support
Russian Ministry of Finance Participate in drafting regulatory acts on financial support
Vnesheconombank Provision of financing
Russian Ministry of Industry and Trade Subsiding
Russian Ministry of Economic Development Provision of financing (using separate instruments)
Commercial banks and other financial organizations Provision of financing and other financial services
Sectoral and expert organizations (Agency for Strategic Initiatives, Russian Foreign Trade Academy, e-commerce companies etc.) Provision of expertise and services
Business and public organizations (Russian Union of Industrialists and Entrepreneurs, Business Russia, Opora Rossii, Chamber of Commerce and Industry etc.) Representation of exporters
State corporations, development institutions (Skolkovo, RVC, MSU Patenting Foundation, Industrial Development Fund, Russian Direct Investment Fund etc.) Provision of expertise and services
Regional state support institutions (regional government entities, local bodies of the Ministry of Industry and Trade, Ryazan Export Support Center, Regional Information Center, regional business support foundations and centers, business incubators) Provision of services, primary selection and preparation of projects locally
Foreign state support institutions (trade missions in Russia, economic counsels in diplomatic missions) Promotion
Government entities, regulatory authorities (Ministry of Economic Development, Ministry of Industry and Trade, Federal Customs Service, Federal Service for Technical and Export Control, Ministry of Foreign Affairs, Ministry of Finance, Ministry of Communications, Ministry of Agriculture, Ministry of Transportation, Federal Tax Service, Ministry of Energy, Ministry of Education, Ministry for the Development of the Russian Far East, Ministry of North Caucasus Affairs, Federal Service for Military and Technical Cooperation, Ministry of Labor, Federal Service for Financial Monitoring, Federal Antitrust Service) Provision of public services

6.3

Risk management

One of the key elements of REC Group’s integration is building up a single risk management system which should meet the following criteria:

1

Common approaches to risk management at the level of the REC Group in the context of the common risk appetite

2

Taking into account the specifics of operations and regulatory framework within which each REC Group’s organization is functioning

3

Harmonizing risk management instruments, risk monitoring and reporting processes, risk-related decision-making process etc

For example, in 2016, the REC Group developed unified methodological approaches to credit risk assessing, setting credit limits and credit risk monitoring in line with the priorities based on the ongoing risk exposure. Such approaches imply availability of competences common for EXIAR and REC’s Center of Excellence and

Credit Committee, as well as using a single automated system for credit risk analyzing.

Subsequently, unified risk management processes and approaches will be developed and extended to other categories of risks which are material for REC Group’s operations.

6.4

Business ethics

CUSTOMER SERVICE

REC Group has its own Code of Customer Service which is intended to improve and maintain the corporate style and customer service culture as part of a single corporate outline, and to maintain higher client service standards.

The main principles of the customer service is the client-oriented and flexible approach while unconditionally maintaining the level of competence and professionalism.

The key customer service standards are as follows:

  • responsiveness and availability,
  • support and feedback,
  • quality of advice and custom-tailored approach,
  • transparency and clarity of procedures.

6.5

Anti-corruption activities

The REC Group and its management stick to higher ethical standards of doing open and fair business and seek to improve the corporate culture, follow the best practices in corporate governance and maintain the Group’s business reputation at a high level. The REC Group and its employees do not accept corruption in any its forms or manifestations.

In 2016, the Company approved the Regulation on Countering Corruption in REC Group which is binding on all Company’s employees. Under the Regulation, all of the contractors are tested for tolerance to corruption, and the anti-corruption clause is incorporated in all contracts. When publishing the information about procurement of goods or services, the required transparency is ensured so as to facilitate the free and good faith competition.

In order to increase the general level of anticorruption culture, the Company regularly informs and trains its employees. Further, in the context of the Russian Federation’s obligations arising out of the ratification of the OECD Convention on Combating Bribery of Foreign Public Officials, REC Group’s companies introduced the relevant system to identify whether the applicants and exporters have ever been involved in any activities connected with bribery of foreign public officials.

6.6

Procurement management

For the purpose to streamline the procurement procedures, the Russian Export Center approved a new version of the Regulation on Procurement of Goods, Works and Services (the Regulation).

The document adjusts and unifies various aspects connected with all stages of procurement, from setting out the requirements to suppliers to contracting.

Under the Regulation, the customer may define the requirements to the ecological performance of the procured goods, works or services.

The new version of the Regulation will be used as a model regulation for all REC Group’s companies. This will enable them to conduct the procurement process on a consolidated basis concurrently for REC, EXIAR and Eximbank of Russia.

The Regulation on Countering Corruption in REC Group is binding on all Company’s employees