2014 Annual report

Board of Directors

Professional Board of Directors is an important element of the Company’s efficient corporate governance.

The main functions of the Board of Directors include overall strategic direction of the Company, determination of priority directions of the Company’s development, control over activities of executive bodies in the interests of the Company and its shareholders, objective appraisal of the Company’s financial condition.

The powers of members of the Board of Directors are quite wide enabling them to influence considerably on activities of JSC IDGC of the North-West. This determines the high level of responsibility of members of the Board of Directors JSC IDGC of the North-West members to shareholders and the Company for decisions they make. Powers of all members of the Company’s Board of Directors may be terminated early by a resolution of the General Shareholders’ Meeting.

The Articles of Association and internal documents of JSC IDGC of the North-West specify a number of regulations describing the activity of the Board of Directors from the point of view of the Corporate Governance Code observance, in particular:

The cumulative voting used in election of the members of the Company’s Board of Directors makes it possible to introduce the representatives of minority shareholders into its structure in accordance with the structure of the Company’s property and to consider the interests of all general categories of shareholders.

Inclusion of independent directors in the composition of the Board of Directors contributes to its balanced state in terms of possibilities for exercising rights and considering interests of all the shareholder groups.

Efficient corporate governance requires an open dialogue between the Board of Directors and Executive bodies of the Company. For this purpose, the General Director provides the Board of Directors with quarterly reports on the Company’s activities, including implementation of the Board of Directors’ resolutions. The Board of Directors creates and maintains necessary mechanisms of control over the Managing Board of the Company, including monitoring and evaluation of its activities.

Procedural matters relating to activities of the Company’s Board of Directors are controlled by the Regulations of JSC IDGC of the North-West for the Procedure of Convening and Holding of the Board of Directors’ Meetings.