Corporate Governance
Board of Directors
The Board of Directors is responsible for PhosAgro’s long-term development by providing professional, considered and
accurate guidance to the Company’s management. The primary areas in which the Board influences PhosAgro’s operations are:
- determining a strategy that will support the Company’s long-term, sustainable growth; establishing strategic performance targets for management, and putting in place systems that enable the Board of Directors to hold management accountable for its performance;
- ensuring that PhosAgro’s internal control, internal audit and risk management systems provide accurate and timely information to management and the Board of Directors, thus ensuring effective management of the Company;
- supporting and monitoring the Company’s sustainable business practices, including in the areas of occupational health and safety, support for the development of local communities, social and professional support for PhosAgro employees and dialogues with key stakeholders.
- setting the Company’s development strategy and its business priorities;
- considering the political, financial and other risks that influence the Company’s operations and ensuring adequate risk management systems are in place to mitigate them;
- evaluating the financial and operational results of the Company and its subsidiaries;
- holding the management team and the Chief Executive Officer accountable for the Company’s performance;
- ensuring the Company’s compliance with current legislation and the principles of corporate governance.
The Board of Directors of PhosAgro operates in accordance with the Law on Joint Stock Companies and the Company’s Charter.
The number of Directors and the membership of the Board of Directors are determined annually by the General Shareholders Meeting, with the term of appointment being one year. When choosing Board members, it is of paramount importance for the Company to find the right balance between professional skills and experience, independence and industry knowledge.
The Board of Directors is normally elected at the Annual General Shareholders Meeting by cumulative voting.
During the reporting period, the Board of Directors held 14 meetings, three of which were carried out by absentee ballots.
On 25 May 2011, Sven Ombudstvedt was appointed as the Chairman of the Board of Directors replacing Vladimir Litvinenko, who had held this position since July 1, 2010.
From 18 June 2010 to 12 May 2011, Gennady Korneev served on the Board of Directors as an Independent Non-Executive Director and was a member of the Audit Committee and the Chairman of the Remuneration and Human Resources Committee.
The Board of Directors
As of 31 December 2011, the Board of Directors consisted of seven members, three of whom were Independent Non-Executive Directors.
| Name | Year of birth | Position | Year appoin-ted | Attendance at the meetings of |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Board |
Audit Committee |
Strategy Committee |
Remuneration and HR Committee |
Health and Safety Committee |
|||||||||||||||||
| Held | Atten-ded | Held | Atten-ded | Held | Atten-ded | Held | Atten-ded | Held | Atten-ded | ||||||||||||
| Sven Ombudstvedt | 1966 | Chairman of the Board of Directors Independent Non-Executive Director | 2011 | 6 | 6 | 2 | 2 | 2 | 2 | 2 |
2 | — | — | ||||||||
| Marcus Rhodes | 1961 | Independent Non-Executive Director | 2011 | 6 | 6 | 2 | 2 | — |
— | — |
— | — | — | ||||||||
| Ivan Rodionov | 1953 | Independent Non-Executive Director | 2004 | 14 | 14 | 6 | 6 | — | — | 2 |
2 | — | — | ||||||||
| Vladimir Litvinenko | 1955 | Non-Executive Director | 2010 | 14 | 3 | — | — | 2 | 2 | — | — | 1 | 1 | ||||||||
| Igor Antoshin | 1963 | Deputy Chairman of the Board of Directors Non-Executive Director | 2006 | 14 | 9 | — | — | 2 | 2 | 2 | 2 | 1 | 1 | ||||||||
| Maxim Volkov | 1972 | Executive Director | 2007 | 14 | 14 | — | — | 2 | 2 | — |
— | 1 | 1 | ||||||||
| Vasily Loginov | 1962 | Executive Director | 2011 | 6 | 5 | — | — | — | — | — | — | 1 | 1 | ||||||||
According to the Corporate Governance Code of PhosAgro, which accords with the UK Corporate Governance Code and meets the requirements of the UK Financial Services Authority, the criteria of independence for members of the Board of Directors are that an Independent Director:
- cannot have had any relationship with the Company for a period of five years prior to appointment to the Board;
- cannot have any relationship with a company where any of the Company’s officials is a member of the other company’s Board Committee for Human Resources and Remuneration; cannot be related by family to any senior manager of the Company or the Chief Executive Officer;
- cannot be a representative of the Russian federal or local state authorities;
- cannot be a senior manager in any of PhosAgro’s subsidiaries and/or hold more than 3% of the Company’s authorised capital.
The Board of Directors constantly seeks to improve its effectiveness and to comply with the recommendations of the Russian Federal Service for Financial Markets Code of Corporate Conduct, as well as other internationally recognised best practices in corporate governance. One of the important steps towards achieving this was the election of two new Independent Directors (Sven Ombudstvedt and Marcus Rhodes) to the Board of Directors of PhosAgro in 2011.
| Sven Ombudstvedt |
|---|
Chairman of the Board of Directors
|
| Since 2011 — Chairman of the Board of Directors, OJSC PhosAgro Since 2010— Chief Executive Officer, Norske Skogindustrier ASA 2008 — 2009 — Senior Vice President, SCD SAS 2006 — 2008 — Chief Financial Officer and Head of Strategy, Yara International ASA 2003 — 2006 — Senior Vice President of Upstream Operations, Yara International ASA 2002 — 2003 — Senior Vice President of Corporate Strategy, Norsk Hydra ASA |
|
Education: Master of Science degree in International Management from the Thunderbird School of Global Management (USA) Bachelor of Science degree in Business Administration from Pacific Lutheran University (USA) |
| Mr. Ombudstvedt holds no shares in the Company. |
| Marcus Rhodes |
|---|
Independent Non-Executive Director
|
| Since 2011 — Member of the Board of Directors, OJSC PhosAgro 2002 — 2008 — Audit Partner, Ernst & Young 1998 — 2002 — Audit Partner, Arthur Andersen |
| Education and memberships: Graduate degree in Economics from the University of Loughborough (UK) Qualified Chartered Accountant, member of the Institute of Chartered Accountants in England & Wales (ICAEW) and member of the Non-Executive Director Group of the ICAEW Member of the Board of Directors of Rosinter Group, Cherkizovo Group and Tethys Petroleum. |
| Mr. Rhodes holds no shares in the Company. |
| Ivan Rodionov |
|---|
Independent Non-Executive Director
|
|
Since 2004 — Member of the Board of Directors, OJSC PhosAgro Since 2006 — Professor, Russian State University for the Humanities Since 2003 — Professor, National Research University “Higher School of Economics” 2005 — 2007 — Member of the Board of Directors, OJSC MGTS 2004 — 2006 —Managing Director, AIG-Interros RCF Adviser 1997 — 2006 — Managing Director, AIG Brunswick Capital Management |
| Education and memberships: Graduate degree in Economics from Lomonosov Moscow State University (Russia) Chairman of the Board of Trustees of the Venture Innovation Fund |
| Mr. Rodionov holds no shares in the Company. |
| Vladimir Litvinenko |
|---|
Non-Executive Director
|
| Since 2010 — Member of the Board of Directors, OJSC PhosAgro Since 1994 — Rector, St.Petersburg State Mining University |
| Education and memberships: Graduate degree in Mining from Leningrad Mining Institute named after G.V. Plekhanov (now St. Petersburg State Mining University, Russia) Doctor of Engineering Science, Professor Member of the Russian Academy of Sciences |
| Mr. Litvinenko directly holds shares equivalent to 5.00% of the Company’s authorised capital.In addition, Feivel Limited holds shares equivalent to 5.00% of PhosAgro’s share capital. All the shares in Feivel Limited are ultimately held on trust, where Mr. Litvinenko is the economic beneficiary. Mr. Litvinenkodid not conduct any transactions in the Company’s shares during the reporting period. |
| Igor Antoshin |
|---|
Deputy Chairman of the Board of Directors
|
| Since 2006 — Member of the Board of Directors, OJSC PhosAgro Since 2009 — Chief Executive Officer, LLC Engineering Centre of PhosAgro 2006 — 2009— Chief Executive Officer, OJSC PhosAgro 2004 — 2006 — Chief Executive Officer, CJSC PhosAgro AG 2002 — 2005 — Chief Executive Officer, OJSC PhosAgro 2002 — 2004 — Member of the Board of Directors, OJSC PhosAgro |
| Education: Graduate degree in Economics from St.Petersburg State Mining University (Russia) |
| Mr. Antoshin directly holds shares equivalent to 2.00% of the Company’s authorised capital. In addition, Vindemiatrix Trading Limited holds shares equivalent to 5.01% of PhosAgro’s share capital. All the shares in Vindemiatrix Trading Limited are ultimately held on trust, where Mr. Antoshin is the economic beneficiary.Mr. Antoshindid not conduct any transactions in the Company’s shares during the reporting period. |
| Maxim Volkov |
|---|
Executive Director
|
| Since 2011 — Chief Executive Officer, CJSC PhosAgro AG Since 2009 — Chief Executive Officer, OJSC PhosAgro Since 2007 — Member of the Board of Directors, OJSC PhosAgro 2006 — 2009 — Chief Executive Officer, CJSC PhosAgro AG 2005 — 2006 — Chief Executive Officer, OJSC PhosAgro 2003 — 2005 — Chief Financial Officer, CJSC PhosAgro AG Deputy Chief Executive Officer for Economic Affairs and Finance, OJSC PhosAgro 2002 — 2004— Member of the Board of Directors, OJSC PhosAgro 1996 — 2002 — Auditor, Arthur Andersen |
| Education: Graduate degree in Engineering from Baltic State Technical University “VOENMEH” named after D.F. Ustinov (Russia) Master of Science degree from Bodø Graduate School of Business (Norway) |
| Mr. Volkov directly holds shares equivalent to 1.04% of the Company’s authorised capital. In addition, Menoza Trading Limited holds shares equivalent to 0.06% of PhosAgro’s share capital. All the shares in Menoza Trading Limited are ultimately held on trust, where Mr. Volkov is the economic beneficiary. During the reporting period, Mr. Volkov conducted several transactions in the Company’s shares and GDRs, increasing his stake from 1.00% to 1.04%. |
| Vasily Loginov |
|---|
Executive Director Deputy
|
| Since 2011 — Member of the Board of Directors, OJSC PhosAgro Deputy Chief Executive Officer, CJSC PhosAgro AG Chief Executive Officer, LLC PhosAgro-Region 2008 — 2011 — Head of Sales and Foreign Affairs, CJSC PhosAgro AG Since 2006 — Member of the Management Board, CJSC PhosAgro AG 2006 — 2007 — Member of the Board of Directors, the Research Institute for Fertilisers and Insectofungicides (NIUIF) 2006 — 2008 — First Deputy Chief Executive Officer, CJSC PhosAgro AG 2005 — 2006 —First Deputy Chief Executive Officerfor Sales and Logistics, CJSC PhosAgro AG Prior to 2005 — held various management positions at Mars LLC, CJSC Russian Product, CJSC Mistiko and CJSC Vital |
| Education: Diploma in Engineering from Riga Higher Military Aviation Engineering School named after Janis Alksnis (Latvia) Qualified as an English-speaking officer at the Dzerzhinsky Higher School of the KGB (Russia) Graduate degree in International Relations and Foreign Policy from the Red Banner Institute of the KGB named after Yuri Andropov (now the Academy of Foreign Intelligence, Russia) |
| Mr. Loginov holds no shares in the Company. |
Activities in 2011
During the reporting period, the Board of Directors made a number of decisions regarding the Company’s budget and priority developments for 2011. The Board also approved decisions on the conversion of the Company’s preferred shares into ordinary shares and on a share split of PhosAgro’s ordinary shares. In the second half of 2011, the Board drew up a detailed forward-looking agenda for the period from September 2011 to June 2012, and approved the Company’s business strategy and budget for 2012.
In 2011, the Board of Directors also considered the following matters:
- preparation for and holding of the Annual General Meeting of Shareholders, including setting the agenda for the Meeting, preliminary approval of the Annual Report for 2010 and recommendations on the level of dividends, as well as preparation for and holding of an Extraordinary General Meeting of Shareholders;
- approval of changes to PhosAgro’s Charter;
- election of the Chairman and Deputy Chairman of the Board;
- approval of the composition of the Board Committees and election of their members;
- review and approval of the Company’s interim financial results under IFRS;
- review and approval of the Company’s internal corporate documents, i.e. the Corporate Governance Code, Regulation on Insider Information, the Statutes of the Board of Directors, Board Committees, etc.;
- review of the external auditor for 2011 and the auditor’s remuneration;
- approval of interested party transactions.