Report on the activities of the Supervisory CouncilReport on the activities of the Supervisory Council
Meetings of the Supervisory Council are convened at the initiative of its Chairman or at the request of a Council member, the Statutory Audit Commission, the Auditor, the Management Board, the President and Chairman of the Management Board or the Head of the Internal Audit Department. A quorum is formed by the attendance of at least half of the elected members.
Decisions are taken by a majority vote of participating members unless otherwise provided in the Charter and the Regulation on the Supervisory Council. For decision-making purposes, each member of the Council has one vote at meetings.
When considering agenda items, the members of the Supervisory Council assess possible conflicts between their interests and the Bank’s interests and do not participate in voting on any issue (and, if necessary, do not take part in discussions of the issue) that may, in the opinion of a member of the Supervisory Council, lead to such a conflict of interest.
Meetings of the Supervisory Council are held on a scheduled basis, although, if necessary, they may be held outside of the schedule. The format of each Supervisory Council is determined in accordance with the Bank’s Charter and based on the importance of its agenda. The most significant matters are brought up at in-person meetings.
At every Supervisory Council meeting, a report is provided to update members on the implementation of decisions, assignments and programmes approved by the Supervisory Council.
Members are able to review materials for meetings in advance, in addition to recommendations and conclusions of the Supervisory Council’s committees on each agenda point. The Supervisory Council’s schedule is compiled for the period between AGMs and is approved by the Council. Meetings are scheduled in advance based on the Bank’s business cycle and may be held in person or through absentee voting. Any member unable to attend a meeting can still participate via videoconference (including voting on agenda items); they can also submit a written opinion on agenda items. A member of the Supervisory Council who has submitted his or her written opinion on the agenda the day before the start of the meeting is considered to have taken part in the meeting. A written opinion can be issued both on paper and in the form of an electronic document signed with an electronic signature using special software.
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PARTICIPATION OF MEMBERS OF THE SUPERVISORY COUNCIL IN MEETINGS
Depending on the results of in-person meetings or absentee ballots, minutes are drawn up reflecting the voting results as well as the position of each member of the Supervisory Council on the agenda items.
In 2020, the Supervisory Council actively engaged with the Bank’s minority shareholders and also considered the Report on Cooperation with the Bank’s Shareholders and an action plan for working with shareholders in the upcoming calendar year.
A representative of minority shareholders and an independent member of the Supervisory Council, Igor Repin, took part in meetings with minority shareholders and also in meetings of the Bank’s Shareholders Consultative Council.
The Bank’s Supervisory Council considered a total of 122 issues in 2020, and the Supervisory Council committees prepared recommendations on 44 of these issues.
Priority areas of the Bank’s operations:
- approval of VTB Bank’s business plan and financial plan (budget) for 2021;
- approval of VTB Bank’s Investment Programme for 2020; approval of a programme to improve VTB Bank’s operational efficiency and reduce expenses for 2020;
- approval of a new version of the plan to restore VTB Bank’s financial stability;
- participation of VTB Bank in Banco VTB África and VTB Commercial Financing;
- approval of an action plan for the divestment of the Bank’s non-core assets for 2020 and for (quarterly) registration of the Bank’s non-core assets, and approval of a new version of the Programme for the Divestment of Non-core Assets;
- approval of a programme and prospectus for VTB Bank’s KS-4 series of listed bonds, and of programmes for VTB Bank’s SUB-T1 and SUB-T2 series bonds;
- approval of VTB Bank’s Long-Term Development Programme for 2020–2023.
Corporate governance and procedural Issues:
- calling and determining the agendas for the AGM and Extraordinary General Meetings of Shareholders, establishing the record date for eligibility in General Meetings of Shareholders, consideration of issues proposed by Bank shareholders for inclusion on the agenda of AGMs, consideration of candidates proposed by Bank shareholders for election to the Supervisory Council and the Statutory Audit Commission, and other issues related to the preparation and holding of the General Meeting of Shareholders;
- recommendations on the distribution of profits and the amount of dividends on Bank shares;
- preliminary approval of the Bank’s Annual Report;
- proposals of candidates for the Bank’s auditor;
- review of the results of the assessments of VTB Bank’s corporate governance system for 2019 and of the work of the Supervisory Council in 2019;
- election of the members of the Supervisory Council’s committees and the appointment of the committee chairpersons;
- approval of amendments to the Bank’s Regulation on the Procurement of Goods, Works and Services;
- approval of the Regulation on Management of VTB Bank’s Intellectual Property Rights;
- approval of a new version of VTB Bank’s Code of Ethics;
- review of directives from the Federal Agency for State Property Management and reports on their implementation.
- election of the Chairman of the Supervisory Council (Dmitry Grigorenko);
- election of the senior independent director (Yves Thibault de Silguy);
- approval of the Supervisory Council to allow the President and Chairman of the Management Board and members of the Management Board to hold management positions in other organisations;
- election of members of VTB Bank’s Management Board (Svyatoslav Ostrovsky and Natalia Dirks) and establishing their remuneration and compensation;
- payment of bonuses to members of VTB Bank’s executive bodies for 2019 and deferred bonuses for 2018 and 2017;
- approval of a new version of the List of Key Performance Indicators for Evaluating the Activities of Members of the Management Board of VTB Bank.
Risks and internal control:
- approval of new versions of VTB Bank’s Internal Control Regulation, Risk and Capital Management Strategy, Procedure for Managing the Most Significant Risks, Regulation on the Risk Management System and Procedure for the Application of Risk Management Methodologies and Models for Quantitative Risk Assessment (concerning credit risk and using an approach based on internal ratings);
- review of a report on the activities of the Internal Audit Department for 2H 2019 and 1H 2020, and approval of its work plan for 2021;
- review of a report on the results of the implementation in 2019 of the Rules on Internal Monitoring in Respect of the Prevention of Money Laundering and Terrorist Financing (AML/CTF) and recommended measures to improve the AML/CTF system;
- review of quarterly reports by inspectors of the Bank’s professional activities in the securities market;
- review of quarterly reports on significant risks and on VTB Bank’s capital adequacy, as well as on the results of stress testing at VTB Bank; key parameters of quantitative indicators of the risk appetite of VTB Bank and of VTB Group were approved/amended.
Review of reports and plans:
- reports on the activities of the Supervisory Council’s committees;
- report on the Bank’s sponsorship and charitable activities for 2019;
- report on the work of the Bank’s Corporate Secretary in 2019;
- report on interaction between VTB Bank and its shareholders in 2019 and plans to work with shareholders in 2020;
- report on the financial results and performance of VTB Group companies (quarterly);
- progress report on the implementation of the Bank’s Programme for the Divestment of Non-core Assets (quarterly).
Information technology in the work of the Supervisory Council.
Since 2018, members of the Supervisory Council have been able to use a mobile electronic office that gives them single-point access to materials from current and past meetings of the Supervisory Council and its committees, as well as information about decisions adopted, participants and other information required for the members of the Bank’s Supervisory Council to perform their duties effectively, including financial statements, press reviews, Bank bylaws, etc.
The Bank continued to work on introducing digital technologies into the activities of the Supervisory Council; in 2020, for example, the Bank made it possible for members of the Supervisory Council to vote electronically using an electronic signature.