The Board of Directors

The Board of Directors is a collegial management body of the bank, supervising its executive bodies’ activities and carrying out the bank’s general management, including elaboration of strategy, control over its financial and economic activities and protection of the shareholders’ rights.

The Board of Directors, having twelve members, is elected by cumulative voting of the General Meeting of Shareholders. The Board of Directors shall have at least three independent directors. The Management Board members cannot exceed one quarter of the Board of Directors and cannot act as the Board of Directors’ Chairman. The Board of Directors elects the Chairman and Deputy Chairman of the Board at its first meeting.

The Board of Directors’ activities are governed by the Articles of Associations and Regulations on the Board of Directors. These documents are available on the bank’s website under “Investor relations / Information disclosure”. During the reporting period, the documents governing the activities of the Board were brought into compliance with the new legal requirements and listing rules of the Moscow Exchange.

As of early 2014, the composition of the Board of Directors elected by the annual General Meeting of Shareholders held in 2013 was in effect. On June 27, 2014, the annual General Meeting of Shareholders elected a new Board shown in the table “Structure of the Board of Directors”. By decision of the extraordinary General Meeting of Shareholders of October 23, 2014, the bank’s Board of Directors was reelected. Biographies of the current Board of Directors’ members are shown in the Biographies of the Board of Directors' Members section. There was no conflict of interest among the members of the Board of Directors in 2014.

Board of Directors

Director Elected on June 27,
2014
Elected on October 23,
2014
Management
Board members
(MBM)
Independent Directors (ID) Participation in BD’s
meetings *
Lyudmila Goncharova MBM   17/17
Alexander Dolgopolov MBM***   17/17
Nikolay Zatsepin     17/17
Igor Kuimov     ID 6/6
Oleg Lapushkin   ID 17/17
Vladimir Malinin   ID 16/17
Sergey Malinin MBM   17/17
Otar Margania     16/17
Nikita Mikhalkov     13/17
Dmitry Orlov **     11/13
Vladimir Panskov       5/11
Yuri Poletaev   ID 17/17
Mukhadin Eskindarov   ID 16/17
TOTAL 12 12 3 5  

Independent Directors and the Corporate Secretary

Shareholders and the Board of Directors consider the balance of the Board as a guarantee of its efficiency. Objective judgment and independent directors’ experience in other companies, combined with a deep understanding of the bank’s business, allows the Board to consistently develop the bank’s activities and preserve all the existing key advantages.

There was a change in the independence criteria for the Board of Directors’ members in 2014. The independence criteria are stipulated in the Regulations on the Board of Directors, the Corporate Governance Code recommended by the Bank of Russia and the requirements of the organiser of trade, in whose quotation lists the bank’s shares are included. The number of independent directors cannot be less than one fifth of the Board of Directors and cannot be less than three members.

Independent directors are understood to be persons with sufficient independence to form his/her own standpoint and ability to make objective judgments, independent of the influence of the bank’s executive bodies, specific groups of shareholders or other stakeholders and also a sufficient level of professionalism and experience.

A member of the Board of Directors is recognized as an independent director, if he/she:

  • Is not associated with the bank
  • Is not associated with a major shareholder of the bank
  • Is not associated with a major contractor of the bank
  • Is not associated with a competitor bank
  • Is not associated with the state (the Russian Federation, subject of the Russian Federation) or a municipal unit

The current interaction with shareholders and coordination of the bank’s actions aimed at protecting shareholders’ rights and interests and efficient support of the bank’s Board of Directors, is provided by the Corporate Department, functioning as the Corporate Secretary.

In March 2015, the Board of Directors approved the Code of Corporate Governance of the bank, which describes the procedure of assessment of the Board of Directors’ members’ conformity to the independence criteria stipulated in the Moscow Exchange listing rules. The bank’s Code of Corporate Governance is aimed at enhancing and systematizing the bank’s corporate governance, increasing its transparency of operations and confirming the bank’s invariable readiness to maintain high corporate governance standards.

MUKHADIN ESKINDAROV
member of the bank’s Board of Directors, Independent Director

Independent Director Mukhadin Eskindarov, a member of the bank’s Board of Directors, - was included in the rating of “Top 50 best independent directors” of the National Award “Director of the Year 2014”. The organisers of the award and ratings are the Association of Independent Directors and the Russian Union of Industrialists and Entrepreneurs, in partnership with PwC.


SERGEY MALININ
member of the bank’s Board of Directors and the Head of the Corporate Department

Sergey Malinin, a member of the bank’s Board of Directors and the Head of the Corporate Department, was included in the rating of “Top 25 Corporate Governance Directors / Corporate Secretaries” of the National Award “Director of the Year 2014”. The organisers of the award and ratings are the Association of Independent Directors and the Russian Union of Industrialists and Entrepreneurs, in partnership with PwC.

Biographies of the Board of Directors’ Members

The full versions of biographies of the members of the Board of Directors are available on the bank’s website in the section “Corporate Governance / Board of Directors”. Information on the ownership percentage of shares is given as of December 31, 2014. Members of the Board did not perform any transactions with Vozrozhdenie Bank shares during 2014, thus no changes in the percentage of share ownership occurred.

Otar Margania

Chairman of the Board of Directors

Member of the Board of Directors since 2003

Member of the Board of Directors since 2003

Mr Margania has held the position of Dean of the School of Economics of the St. Petersburg State University from 2011 to the present time. His job responsibilities include management of academic, educational and scientific activities at the School, organisation of work to ensure the educational process and organisation and monitoring of educational process. He held the position of Senior Vice President of VTB Bank from 2004-2010.

Mr Margania was born in 1959. He graduated from the Leningrad State University with a degree in Economics in 1985 and is an economist by qualification. He holds a PhD in Economics and is the author of four monographs in Economics. Mr Margania was awarded with the Order of Honour by Presidential Decree in 2009.

Stake in the bank’s authorised capital: 18.65%

Ownership of ordinary shares: 19.67%

Lyudmila Goncharova

Executive Director

Member of the Board of Directors since 1996

Lyudmila Goncharova has been working for Vozrozhdenie Bank since its foundation in 1991. Presently, she holds the position of Deputy Chair of the Management Board, manages the Credit and Investment Committee and supervises the activities of the Corporate Lending Department, Corporate Business Department, Legal Department and Asset Restructuring Department. She has been a member of the Management Board since 1992.

Ms Goncharova is the Chair of the Board of Directors of V-REGISTER CJSC, the Chair of the Board of Directors of Vozrozhdenie-Finance LLC, the Chair of the Board of Directors of YUNOST OJSC, the Chair of the Board of Directors of Baltiisky Kurort LLC and a member of the Management Board of the Chamber of Commerce of the Moscow Region.

Ms Goncharova was born in 1958. She graduated from the Ternopol Institute of Finance and Economics in 1979, specialising in Finance and Credit and is an economist by qualification. She has been awarded with the medal of the Order of Ivan Kalita, the plaque of distinction “For Contribution to the Moscow Region” and the awards of the Governor of the Moscow Region “For Contribution” and “In Gratitude”, the medal of the President of the Russian Federation “In Commemoration of the 850th anniversary of Moscow”, the golden medal of the Minister of Agriculture “For Contribution to the development of agriculture in Russia”. She has also been named “Honoured Economist of the Moscow Region”.

Stake in the bank’s authorised capital: 1.25%.

Ownership of ordinary shares: 1.26%

Alexander Dolgopolov

Non-executive Director since March 31, 2015

Member of the Board of Directors since 1997

Mr Dolgopolov has been working for Vozrozhdenie Bank since 1994. He was Chairman of the Management Board from 2012 to March 2015. He was Head of the Assets and Liabilities Management Committee and supervised the Retail Business Department, Corporate Department, and Marketing and Communications Department. He acted as Deputy Chairman of the Management Board from 2002 to 2012.

Mr Dolgopolov was a member of the Board of Directors of OJSC Avista in 2002-2010, and was a member of the Board of the Non-Governmental Pension Fund Harmony in 2007-2010.

He is a member of the Public Advisory Council on coordination and interaction of the Government of Moscow with credit institutions.

Mr Dolgopolov was born in 1961. He graduated from the Moscow Plekhanov Institute of the National Economy in 1985 with a degree in Economic Cybernetics, and is a mathematical economist by qualification. He is a candidate of Economic Sciences. Mr Dolgopolov has a qualification certificate of the Federal Securities Commission, confirming the right to carry out professional activities in the securities market. Mr Dolgopolov has been awarded with the Honour of the Governor of the Moscow Region “In Gratitude” and “For Contribution and Dedication”.

Stake in the bank’s authorised capital: 0.36%

Ownership of ordinary shares: 0.37%

Nikolay Zatsepin

Non-Executive Director

Member of the Board of Directors since 1994

Mr Zatsepin has held the position of CEO of Mozhaisk Retail Trade Company JSC from 1997 to present. He is also CEO of SP Dorokhovo-NK LLC and Director of Edelweiss LLC. Previously, he was Deputy Director and then Director of Mozhaisk Timber Trading Enterprise. He was CEO of CJSC Mozhaisk in 2008-2011.

Mr Zatsepin was born in 1951. He graduated from the Moscow Institute of Civil Aviation Engineers in 1980, majoring in Operation of Aircraft and Engines and is a mechanical engineer by qualification.

Stake in the bank’s authorised capital: 0.16%

Ownership of ordinary shares: 0.07%

Igor Kuimov

Independent Director

Member the Board of Directors since 2014

Mr Kuimov has held the position of CEO of OJSC Elinar Holding Company from 1999 to present. He has been President of the Chamber of Commerce of the Moscow Region since 2013, and has been Chairman of the Association of Entrepreneurs and Employers of the Naro-Fominsk District since 2000.

Mr Kuimov is also Chairman of the Board of Directors of Cogebi AS, Czech Republic, and Chairman of the Board of Directors of Cogebi Management, Belgium.

Mr Kuimov was born in 1952. He graduated from the Leningrad Polytechnic Institute in 1975, majoring in Electrophysics Engineering, and is an electrophysics engineer by qualification.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Oleg Lapushkin

Independent Director
Chairman of the Audit Committee

Member of the Board of Directors since 2011

Mr Lapushkin acted as a consultant to FBME BANK LTD (Cyprus) from 2005 to 2011. He has served as General Manager of the Russian Commercial Bank in Cyprus since 1994 and was previously General Manager of the Vneshtorgbank of the Russian Federation branch in Cyprus.

Mr Lapushkin was born in 1941. He graduated from the Moscow Financial Institute with a degree in Finance and Credit in 1963 and is an economist by qualification.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Vladimir Malinin

Independent Director
Member of the Audit Committee

Member of the Board of Directors since 2011

Mr Malinin worked as Chairman of the Management Board for Donau Bank, Austria in 1990-1996. He was appointed as Deputy Chairman of Vnesheconombank of the USSR in 1988 and previously held positions at Vneshtorgbank and East-West United Bank.

Mr Malinin was born in 1940. He graduated from the School of Economics and Credit of the Moscow Financial Institute in 1963 with a degree in Finance and Credit and is an economist by qualification.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

SERGEY MALININ

Executive Director

Member of the Board of Directors since 2013

Mr Malinin has been working for Vozrozhdenie Bank since 1992. Presently he is a member of the Management Board, Head of the Corporate Department and supervisor of the Risk Control Department. His job duties involve implementation of emission policy for the issue of shares and bonds, organisational support of management bodies, improving corporate governance practices, interaction with shareholders, organisation of the internal control system in order to combat money laundering and terrorist financing and information and analytical support for corporate and retail businesses.

He was a member of the Board of Directors of Open Joint Stock Company AVISTA Specialised Registrar from 2002 to 2010, and acted as Deputy Head of the Development Department of Vozrozhdenie Bank in 1997-2002

Mr Malinin was born in 1963. He graduated from the Moscow Plekhanov Institute of the National Economy in 1985 with a degree in Economic Cybernetics and is a mathematical economist by qualification. He was awarded with the diploma of distinction of the Governor of the Moscow Region.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Nikita Mikhalkov

Non-Executive Director
Member of the Human Resources
and Compensation Committee

Member of the Board of Directors since 2007

Mr Mikhalkov has held the position of Chairman of the Management Board of Nikita Mikhalkov’s TriTe Studio LLC since 1989. From 1998 to the present time, he has been Chairman of the Management Board of the Union of Cinematographers of the Russian Federation, and has been President of the NGO Russian Culture Foundation since 1994. He is a member of the Presidium of the Presidential Council of the Russian Federation for Culture and Art.

Mr Mikhalkov was born in 1945. He graduated from the All-Russia State Institute of Cinematography in 1971 and is a film director by qualification. Mr Mikhalkov holds the title of People’s Artist of the RSFSR, and is a three-time winner of the State Award of Russia. Mr Mikhalkov has been awarded with the Order of the Red Banner of Labour, the Order of Merit for the Fatherland of the IV, III and II degrees as well as the Order of St. Sergius of Radonezh of the I degree.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Yuri Poletaev

Independent Director
Member of the Audit Committee and the Human Resources and Compensation Committee

Member of the Board of Directors since 2008

Mr Poletaev was Director of the Moscow People’s Bank in London from 2000 to 2005, managing the bank’s operational activities. Previously, he was Chairman of the Management Board and a member of the Board of Directors of Vneshtorgbank of Russia.

Mr Poletaev was born in 1943. He graduated from the Moscow Financial Institute in 1965 with a degree in Finance and Credit and is an economist by qualification.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Mukhadin Eskindarov

Deputy Chairman of the Board of Directors,
Independent Director
Chairman of the Human Resources and Compensation Committee

Member of the Board of Directors since 2010

Mr Eskindarov has been Rector of the Financial University under the Government of the Russian Federation since 2006.

He is Chairman of the Board of Directors of OJSC Moscow Industrial Bank, a member of the Board of Directors of OJSC SKB-Bank and a member of the Supervisory Board of OJSC Rosselkhozbank. He was a member of the Board of Directors of OJSC TMK in 2005-2012, a member of the Supervisory Board of OJSC VTB Bank in 2009-2012 and a member of the Board of Directors of OJSC Bank of Moscow in 2004-2011.

Mr Eskindarov was born in 1951. He graduated from the Moscow Finance Institute in 1976, majoring in Finance and Credit, and is an economist by qualification. Mr Eskindarov is a Professor and Honoured Scientist of the Russian Federation. He was awarded with a Doctor of Economics degree in 2000.

Stake in the bank’s authorised capital: none

Ownership of ordinary shares: none

Report on the Board of Directors’ Activity

The Board of Directors’ work is carried out in accordance with the Activity Plan of the Board, which is approved after the annual General Meeting of Shareholders for the period until the next annual General Meeting. In 2014, 17 Board of Directors meetings were held, including 12 regular and 5 extraordinary meetings, with five meetings held in person and the rest held in absentia.

The Board of Directors considered issues related to forming the Board of Directors’ committees, approval of the financial and economic plan (the budget), approval of the revisions made in the bank’s internal documents, holding the General Meetings of Shareholders, appointment of the Management Board members, risk management, internal audit service activities and materials of inspections carried out by the Bank of Russia and sent to the Board of Directors. Attention was also paid to review of Reports on implementation of the Board of Directors’ decisions, the action plan for improving corporate governance and the results of the Board of Directors’ self-assessment. The Board approved the human resources policy of Vozrozhdenie Bank, the Regulations on the remuneration of the bank’s employees, allocation of costs for motivation of the bank’s employees in 2014 and other issues. A total of 124 issues were discussed, and members of the Board of Directors did not record any dissenting opinion on any of the issues discussed at the meetings.

Following the recommendations of the Bank of Russia, the Board of Directors approves the action plan for improving corporate governance annually and reviews progress in implementation of the plan quarterly.

The bank is constantly working on improving the Board members’ skills. During the reporting year, the Board of Directors was provided with recommendations of the Basel Committee on Banking Supervision “Principles for Enhancing Corporate Governance”, information on international trends in corporate governance, developments in Russian legislation and the Corporate Governance Code approved by the Bank of Russia and the Listing Rules of the Moscow Exchange.

Effectiveness Assessment and Remuneration of the Board of Directors

CRITERIA FOR THE ANNUAL ASSESSMENT OF THE BOARD OF DIRECTORS:

  • Compliance of the Board of Directors’ competence with the goals and objectives of the bank
  • Risk management effectiveness
  • Approval of the bank’s development strategy and control over its implementation
  • Approval of the bank’s development strategy and control over its implementation
  • Convocation and holding of the General Meetings of Shareholders
  • Protecting the interests of shareholders and other participants of corporate relations
  • Compliance with the Corporate Governance Code and the Corporate Ethics Code
  • Fulfillment of the Board of Directors’ work plan
  • Regularity of meetings
  • Regularity of meetings
  • Voting procedure on the agenda
  • Information support of the Board’s activities
  • Distribution of responsibilities among the Board members
  • Balanced structure of the Board of Directors

An effectiveness assessment of the Board of Directors is carried out annually in the form of self-evaluation. Regulations on self-assessment of Vozrozhdenie Bank’s Board of Directors determine the order and timing of the assessment, the list of questions and the procedure for rendering and presenting results. The assessment results submitted by the Human Resources and Compensation Committee of the Board of Directors form the basis of the new Board of Directors’ and its committees’ Activity Plan.

The latest assessment was carried out in April 2014. The Human Resources and Compensation Committee presented the selfassessment results of the Board of Directors’ activities, which were given a high mark, at the Board of Directors’ meeting held on April 25, 2014. Thus, the work of the Board of Directors elected by the annual General Meeting of Shareholders in 2013 was recognised as fully satisfactory. The next assessment of the Board is scheduled for April 2015.

The system of remuneration of the Board of Directors’ members meets the latest requirements of the Bank of Russia and provides convergence of financial interests of directors with long-term financial interests of shareholders. The procedure for determining remuneration is determined by the Regulations on remuneration and compensation paid to members of the Board of Directors. Preference is given to a fixed annual remuneration for the Board of Directors’ members. The remuneration is paid in accordance with the results of the bank’s activities in the completed financial year.

The Human Resources and Compensation Committee elaborates recommendations with respect to remuneration. In determining the actual remuneration amount, the following factors are taken into account: participation in Board meetings, participation in the work of Board committees, the position and additional responsibilities on the Board, availability of profit in the completed financial year and the self-assessment results of the Board of Directors’ activities.

In accordance with the decision of the annual General Meeting of Shareholders, the remuneration paid to the Board of Directors’ members in 2014 for their work in this management body of the bank in 2013 was RUB 9.6 million.

The Chairman of the Board of Directors received remuneration of RUB 3 million; Independent Directors – Heads of Committees received remuneration of RUB 1.5 million each; other members of the Board of Directors received remuneration in the amount of RUB 600,000 each. Remuneration was not paid to Executive Directors - members of the Management Board. No agreements for compensation of the Board members’ expenses relating to fulfillment of their functions were concluded.

Decision on the end-of-year remuneration payments to the Board of Directors for 2014 will be made by the General Meeting of Shareholders in 2015. No transactions with the bank’s shares were made by the Board of Directors’ members in 2014.

My Report

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