Board of Directors

The Board of Directors exercises general management of the Company’s business. The jurisdiction of the Board of Directors includes areas related to the strategic management of the Company’s business. Among the obligations of the Board of Directors is the determination of the Company’s development priorities within its main operational guidelines. In view of the strategic importance of the goals set by the Board of Directors, its members must gain the support of the Company’s shareholders and ensure that they fulfill their roles effectively.

In accordance with the OJSC Gazprom Neft Articles of Incorporation adopted by the extraordinary general meeting of shareholders on 12 November 2013, the Board of Directors shall be comprised of 13 people. According to the structure of its authorised capital (95.68% of the total number of ordinary shares are held by OJSC Gazprom), most of the Directors elected to Gazprom Neft’s Board of Directors are nominated by OJSC Gazprom as the controlling shareholder. The Company’s Board of Directors is comprised of members of the OJSC Gazprom Management Committee, who represent the interests of the controlling shareholder and are experts in managing oil and gas Company assets, and two independent directors. The high level of participation of the parent company’s key executives in the OJSC Gazprom Neft Board of Directors reflects the high competency and effectiveness of this management body.

The OJSC Gazprom Neft Board of Directors is largely independent of the Company’s management. The only executive director on the Board of Directors is the Chairman of the OJSC Gazprom Neft Management Board, A. V. Dyukov.

OJSC Gazprom Neft elects its members to the Board of Directors in a transparent manner:

  • The Company allows its shareholders to nominate candidates to the Board of Directors during a two-month period (legislation provides for one month);
  • The Company discloses information about the current composition of the Board of Directors and candidates for the Board of Directors well in advance;
  • The Company regularly engages with the depositary bank issuing depositary receipts;
  • The Company uses and explains the cumulative voting procedure when electing members to the Board of Directors;
  • The Company announces the results of voting on items by stating the quorum and the members who voted for each voting option;
  • The Company publishes the minutes of general meetings of shareholders on a public resource – its official website.

As of 31 December 20133, the directors in office had been elected by the General Meeting of Shareholders held on 24 December 2013 (Minutes No. 0101/07 of 24 December 2013).

Information about changes in the composition of the Company’s Board of Directors during the reporting year.

The following changes have taken place in the composition of the Board of Directors since the beginning of 2013:

  • Fursenko Sergey Aleksandrovich joined the Board of Directors on 22 February 2013 (by resolution of the extraordinary general meeting of shareholders, Minutes No. 0101/2 of 22 February 2013).
  • Sereda Mikhail Leonidovich joined the Board of Directors on 24 December 2013 (by resolution of the extraordinary general meeting of shareholders, Minutes No. 0101/7 of 24 December 2013).

There were no other changes in the composition of the Company’s Board of Directors in 2013. At the re-election of the OJSC Gazprom Neft Board of Directors, the other members of the Company’s Board of Directors were re-elected.

Except for A. V. Dyukov, members of the Board of Directors and its Chairman did not hold shares in the Company during the reporting year. During the reporting year, members of the Board of Directors did not buy or sell any Company shares.

No lawsuits were filed against members of the Board of Directors in 2013.

Board of directors

(as of December 31, 2013)

Alexei Borisovich Miller
ALEXEI BORISOVICH
MILLER

Chairman of the Board of Directors.

Born in 1962, graduated from the N. A. Voznesensky Institute of Finance and Economics in Leningrad.

2001 – present: Chairman of the OJSC Gazprom Management Committee.

2002 – present: Deputy Chairman of the OJSC Gazprom Board of Directors.

Ph.D. in Economics.

Valery Aleksandrovich Golubev
Valery Aleksandrovich
Golubev

Born in 1952, graduated from the V. I. Ulianov (Lenin).

Electro-technical Institute in Leningrad, the National Academy of Economics under the Russian Federation Government.

2006 – present: Deputy Chairman of the OJSC Gazprom Management Committee.

Ph.D. in Economics.

Andrei Vyacheslavovich Kruglov
Andrei Vyacheslavovich
Kruglov

Born in 1969, graduated from the Saint-Petersburg Technological Institute of the Refrigeration Industry.

2004 – present: Deputy Chairman of the Management Committee, Director of the Finance and Economic Department, OJSC Gazprom.

Doctor of Economics.

Kirill Gennadievich Seleznev
Kirill Gennadievich
Seleznev

Born in 1974, graduated from the D. F. Ustinov Baltic State Technical University, Saint-Petersburg State University.

2002 – present: Director of the Department of Marketing and Gas and Liquid Hydrocarbon Processing.

2003 – present: member of the OJSC Gazprom Management Committee.

2004 – present: Chief Executive Officer of LLC Gazprom Mezhregiongaz.

Ph.D. in Economics.

Nikolay Nikolaevich Dubik
Nikolay Nikolaevich
Dubik

Born in 1971, graduated from the M. V. Lomonsov Moscow State University.

2005–2008: Deputy Director of the Legal Department, OJSC Gazprom.

2008 – First Deputy Director of the Legal Department, OJSC Gazprom.

2008 – present: Director of the Legal Department, OJSC Gazprom, member of the OJSC Gazprom Management Committee.

Honoured Lawyer of the Russian Federation.

Elena Vladimirovna Mikhailova
Elena Vladimirovna
Mikhailova

Born in 1977, graduated from the Moscow State Industrial University with a degree in jurisprudence, and gained a Master of Business Administration degree at the National Academy of Economics under the Russian Federation Government.

2003–2011: Deputy Chief Executive Officer for Corporate and Property Relations, LLC Gazprom Mezhregiongaz.

2011–2012: Director of the Department of Property Management and Corporate Relations, OJSC Gazprom.

2011 – present: Director of the Department of Property Management and Corporate Relations, OJSC Gazprom.

2012 – present: member of the Management Board, OJSC Gazprom.

Alexander Valerievich Dyukov
Alexander Valerievich
Dyukov

Born in 1967, graduated from the Order of Lenin Shipbuilding Institute in Leningrad. In 2001, gained an IMISP MBA degree.

2006 – present: Chairman of the OJSC SIBUR Holding Board of Directors.

2006–2007: President of Gazprom Neft.

December 2007 – present: Chairman of the Management Board, Chief Executive Officer of OJSC Gazprom Neft.

Interest in the authorised capital (as of 31 December 2013): 0.005357244 % (254,003 units).

Alexander Leonidovich Mikheev
Alexander Leonidovich
Mikheev

Born in 1944, graduated from the Gas and Oil Field Department of the I. M. Gubkin Institute of Petrochemical and Gas Industry in Moscow.

Since 2003, First Deputy Director of the Department of Marketing and Gas and Liquid Hydrocarbon Processing, OJSC Gazprom.

Vsevolod Vladimirovich Cherepanov
Vsevolod Vladimirovich
Cherepanov

Born in 1944, graduated from the M.V. Lomonosov Moscow State University

2008–2010: Deputy Chief Executive Officer – Chief Geological Engineer, LLC Gazprom Dobycha Nadym.

2010 – present: member of the OJSC Gazprom Management Committee, Director of the Department of Gas, Gas Condensate and Oil Production, OJSC Gazprom.

Ph.D. in Geological and Mineralogical Sciences.

Vladimir Ivanovich Alisov
Vladimir Ivanovich
Alisov

Born in 1960, graduated from the A. A. Zhdanov Law Department of the Leningrad State University.

2007–2008: Deputy Director of the Legal Department, OJSC Gazprom.

2008 – present: First Deputy Director of the Legal Department, OJSC Gazprom.

Member of the Russian Bar Association. Member of the Corporate Governance Expert Council under the Federal Financial Markets Service of Russia. Honoured Lawyer of the Russian Federation.

Valery Pavlovich Serdyukov
Valery Pavlovich
Serdyukov

Independent director.

Born in 1945, graduated from the G. V. Plekhanov Mining Institute in Leningrad.

1999–2012: Leningrad Region Governor. Honoured with government and industry awards.

Ph.D. in Economics.

Sergey Aleksandrovich Fursenko
Sergey Aleksandrovich
Fursenko

Independent director.

Born in 1954, graduate of Leningrad Polytechnic Institute.

2003–2008: Chief Executive Officer, ООО Lentransgaz.

2010–2012: President, Football (Soccer) Union of Russia.

Since December 2012, Chairman of the Board of Directors, Gazprom Gas-Engine Fuel, LLC.

Mikhail Leonidovich Sereda
Mikhail Leonidovich
Sereda

Born in 1970, graduate of Saint Petersburg State University of Economics and Financing.

Since 2002, member of the Board of Directors, OJSC Gazprom.

Since 2004, Deputy Chairman of the Management Committee, Head of Administration of the Management Committee, OJSC Gazprom.

Activities of OJSC Gazprom Neft Board of Directors in 2013

OJSC Gazprom Neft’s Board of Directors carefully considers issues related to the Company’s future development prospects. Bearing in mind the Company’s accelerated growth performance, with most of the targets set out in the 2010 Development Strategy achieved ahead of deadline, in 2013 the Company developed and implemented a new corporate strategy until 2025. The document continues to use the 2020 goals and recommends ways to achieve them in the key business segments (hydrocarbon production, oil refining, and sales of petroleum products), taking into account both the changing industry environment and the state of the global economy. Once implemented, the new strategy is expected to improve Gazprom Neft’s shareholder value considerably.

Gazprom Neft has always paid great attention to researching and implementing innovative solutions in every business segment. To ensure an efficient application of knowledge, experience and resources, in 2013 the Board approved the Company’s 2020 Innovation Development Programme, which contains information on OJSC Gazprom Neft’s primary focus areas for innovative development, its plans for interaction with third-party organisations, and the key performance indicators that correspond to those found in OJSC Gazprom’s Innovation Development Programme.

The Board is particularly focused on issues relating to budget planning and cost optimisation. This includes reviewing matters relevant to budget execution, the mobilisation of funds, overall efficiency and the allocation of cash flows.

The Board of Directors also views corporate governance matters as a priority. In 2013, the Board of Directors took a number of significant decisions, approving the Regulation on Insider Information and the IT Policy, and considering the distribution of an interim dividend at the general meeting of shareholders, for the first time since the Company’s incorporation.

All Board directors are actively involved in corporate governance matters and demonstrate their commitment to the efficient growth of Gazprom Neft, as evidenced by the number of meetings that each has attended. Every member of the Board of Directors participated in at least 90% of all sessions held, either in person or via conference calls. In addition, the number of matters considered by the Board grew significantly in 2013.

Board of Directors’ attendance rate

Member of the Board of Directors

Number of meetings attended

Total number of meetings which could be attended

Alexei Borisovich Miller (Chairman of the Board of Directors)

58

59

Vladimir Ivanovich Alisov

58

59

Valery Aleksandrovich Golubev

56

59

Nikolay Nikolaevich Dubik

57

59

Alexander Valerievich Dyukov

48

49

Andrei Vyacheslavovich Kruglov

53

59

Elena Vladimirovna Mikhailova

58

59

Alexander Leonidovich Mikheev

59

59

Kirill Gennadievich Seleznev

58

59

Valery Pavlovich Serdyukov

59

59

Mikhail Leonidovich Sereda (Member of the Board of Directors as of 24 December 2013)

2

2

Sergey Aleksandrovich Fursenko (Member of the Board of Directors as of 2 February 2013)

54

55

Vsevolod Vladimirovich Cherepanov

55

59

Key topics considered at the meetings of the Board of Directors in 2013

In strategic and investment planning

In budget planning and corporate financing

In corporate governance

  • Debt structure and debt portfolio management of Gazprom Neft Group in 2012 was considered
  • Company’s strategic performance indicators in 2013 were considered
  • 2025 Development Strategy and 2025 Oil Refining Strategy were approved
  • OJSC Gazprom Neft 2020 Innovation Development Programme was approved
  • Progress and efficiency of the implementation of the Company’s 2013 Investment Programme in 1H 2013 and the introduction of changes to the Investment Programme were considered.
  • Preliminary results of the OJSC Gazprom Neft 2013 Investment Programme were considered
  • OJSC Gazprom Neft Investment Programme for 2014 was approved
  • A draft investment plan for 2015-2016 was considered
  • A report on activities of the Internal Audit Department was considered
  • Amendments proposed to be made to OJSC Gazprom Neft’s 2013 Budget were considered
  • OJSC Gazprom Neft’s 2014 Budget was approved
  • OJSC Gazprom Neft’s Cost Optimisation Programme for 2014 was approved
  • Drafts of OJSC Gazprom Neft’s Budget and Cost Optimisation Programme for 2015-2016 were considered
  • Decisions to place documentary interest-bearing non-convertible bonds were made
  • Several transactions to raise loan financing were approved
  • Transactions to secure liabilities of Gazprom Neft Group’s members were approved
  • Regulations on insider information and IT policy were approved
  • A series of resolutions were made on corporate issues, including a resolution to convene an extraordinary general meeting of OJSC Gazprom Neft shareholders to amend and modify the Company’s Articles of Incorporation, to pay an interim dividend, and to elect the Board of Directors
  • Recommendations regarding the Board of Directors and the Audit Committee’s remuneration payments based on the results of 2012 were made
  • A number of related-party transactions were approved
  • The involvement of members of the OJSC Gazprom Neft Management Board in executive bodies of other corporate entities was considered
  • Resolutions on the Company’s participation or termination of the Company’s participation in other organisations, as part of the implementation of the corporate restructuring programme, were adopted

Committees of the Company’s Board of Directors

Two committees have been set up under the OJSC Gazprom Neft Board of Directors to ensure the effectiveness of the Board of Directors’ activities: the Audit Committee and the Human Resources and Compensation Committee. These committees have been set up to carry out preliminary in-depth research into matters within their jurisdiction. The procedures governing committee creation and activities are outlined in the respective regulations.

The Audit Committee

The Audit Committee assists the Board of Directors in exercising control over the Company’s financial and business activities by assessing the efficiency of internal control systems, including the mechanisms for controlling the preparation and submission of financial and other statements, assessing their completeness and reliability, and by monitoring the risk management system.

The Audit Committee helps to establish a constructive dialogue with the external auditor, bodies in charge of controlling financial and business activities, and the Company’s internal audit units.

The Committee’s work is directly related to the Action Plan of the Board of Directors and includes consideration of topics related to financial activities and investment planning.

In 2013, the Audit Committee considered the following matters:

  • Implementation of the 2012 Investment Programme and OJSC Gazprom Neft’s Budget (Financial Plan) based on the 2012 results;
  • OJSC Gazprom Neft’s draft Annual Report for 2012;
  • Assessment of the audit report of OJSC Gazprom Neft’s 2012 financial statements, prepared by CJSC PricewaterhouseCoopers Audit;
  • Nomination of OJSC Gazprom Neft’s auditor for 2013;
  • Distribution of OJSC Gazprom Neft profits for 2012;
  • Recommendations on the amount and payment procedure of dividends per share of OJSC Gazprom Neft based on 2012 results.

In 2013, the Human Resources and Compensation Committee was comprised of:

  • Andrei Vyacheslavovich Kruglov (Chairman),
  • Valery Aleksandrovich Golubev,
  • Nikolay Nikolaevich Dubik.

The Human Resources and Compensation Committee

In accordance with the Regulations of the Human Resources and Compensation Committee, the Committee’s main role is to undertake a comprehensive preliminary examination of matters included within the jurisdiction of the Board of Directors and to prepare recommendations for the Board of Directors to adopt resolutions regarding the Company’s human resource policies and compensation for members of OJSC Gazprom Neft’s management bodies and the Audit Committee.

In 2013, the Committee considered the following matters:

  • Results of the evaluation of the activities of OJSC Gazprom Neft’s Board of Directors

In 2013, the Audit Committee was comprised of:

  • Nikolay Nikolaevich Dubik (Chairman),
  • Andrei Vyacheslavovich Kruglov,
  • Vsevolod Vladimirovich Cherepanov.

Evaluation of Board activities

An important project implemented by the Human Resources and Compensation Committee of the OJSC Gazprom Neft Board of Directors was the approval of the methodology used to evaluate the Board of Directors’ effectiveness. The adoption and promotion of the Board of Directors’ performance evaluation helps determine its effectiveness as a collegiate management body and the extent to which its activities meet the Company’s needs for development. It also helps to maximise the Board of Directors’ contribution to the successful development of the Company.

The Company carries out an annual evaluation, and the results demonstrate that the Board of Directors’ effectiveness is positive in several key performance areas:

  • Quality of the Board of Directors’ performance in their assigned functions;
  • Composition and structure of the Board of Directors;
  • The role of the Chairman of the Board of Directors;
  • The level of preparation by the Board of Directors;
  • The practice of conducting meetings;
  • Interaction with executive bodies;
  • Level of information provided to the Board of Directors.
  • Quality of the Secretary of the Board of Directors’ execution of his/her duties.

Recommendations received during the evaluation help to improve the performance of the Board of Directors and its Committees, as well as the overall level of corporate governance in the Company.