Board of Directors

In accordance with Rostelecom’s Charter, the Board of Directors consists of 11 members [1] . Pursuant to the Joint Stock Companies Law and Rostelecom’s Charter, members of the Board of Directors are elected annually by a general meeting of shareholders. A person elected as a member of the Board of Directors may be re-elected an unlimited number of times.

The Board’s role is to approve and ensure consistent execution of the Company’s Strategy, appoint proper leadership and monitor business performance. The Board is also responsible for providing complete, accurate and objective information about the Company to the public in order to protect the rights and interests of its shareholders and provide necessary conditions for value creation.

In accordance with a request made by the Company’s shareholder, the Russian Federation represented by the Federal Agency for State Property Management, on December 20, 2013, an EGM was held on April 2, 2014, where Rostelecom’s shareholders approved the re-election of the Board of Directors, among other agenda items. The composition of the Rostelecom Board of Directors before and after April 2, 2014, is presented in the table below.

Composition of the Board of Directors and Committees

 Name  Year of birth Position in the BoD Audit Committee Nominations and Remuneration CommitteeCorporate Governance CommitteeStrategy Committee 
until Apr-2, 2014 since Apr-2, 2014 until Apr-2, 2014 since Sep-29, 2014 until Apr-2, 2014 since Sep-29, 2014 until Apr-2, 2014since Sep-29, 2014until Apr-2, 2014since Sep-29, 2014
1 Ruben A. Aganbegyan 1972 Non-executive director Non-executive director      
2 Mikhail Y. Alekseev 1964 Non-executive director              
3 David Benello 1954   Non-executive director             
4 Kirill A. Dmitriev 1975   Non-executive director           
5 Mikhail M. Zadornov 1963 Non-executive director              
6 Anton A. Zlatopolsky 1966 Non-executive director Non-executive director       
7 Sergei B. Kalugin 1966 Executive director - CEO Executive director - CEO          
8 Igor I. Kozlov 1965   Non-executive director          
9 Yury A. Kudimov 1953 Non-executive director           
10 Sergey A. Kulikov 1976 Non-executive director             
11 Mikhail Y. Lesin 1958   Non-executive director         
12 Anatoly A. Milyukov 1972 Non-executive director Non-executive director       
13 Mikhail I. Poluboyarinov 1966   Non-executive director           
14 Alexander A. Pchelintsev 1970 Non-executive director            
15 Ivan I. Rodionov 1953 Non-executive director           
16 Vadim V. Semenov 1965 Chairman Chairman       
17 Vitaly Y. Sergeichuk 1984   Non-executive director           
Other Committees' members   
  Ekaterina S. Mironova   Corporate secretary Corporate secretary           
  Alexander M. Rogovoy   Executive Vice-President              
  Kai-Uwe Mehlhorn   Senior Vice-President - CFO             
  Maria V. Florentyeva   Senior Vice-President             
  Denis R. Kant Mandal *   Member of Audit Commission             
  Boris V. Minakov *                  

The Board of Directors consists of one executive and ten non-executive Directors [2] . None of the Directors, with the exception of Sergey Kalugin, was a shareholder of Rostelecom as at December 31, 2014. The details on Mr. Kalugin’s equity stake in the Company are provided in the Management Board section of this report.

Board of Directors in detail

Vadim V. Semenov

Chairman

Born : 1965
Member of the BoD since January 2011

Experience:
  • General Director and Chairman of the Management Board of OJSC Svyazinvest (2010-2013);
  • Member of the Board of Directors (2011-2013) of OJSC Svyazinvest, Telecom-Soyuz Pension Fund (2010-2013), Deputy Chairman of OJSC Bashinformsvyaz (2011-2014), Chairman of OJSC Tsentralny Telegraph (2011-2014), OJSC Moscow Inter-city Telephone Exchange No.9 (2010-2014), OJSC Gyprosvyaz (2011-2014) and Chairman and Member of the BoD of other companies across Svyazinvest group (2010-2012);
  • Advisor to General Director, Vice President for Corporate Development and Member of the Management Board of OJSC Rostelecom (2009-2010);
  • Various management positions at OJSC MegaFon, including Head of the Legal Department, Director for Legal Affairs and Deputy Director for Legal Affairs (2003-2009).

Other current positions:

  • Chairman of the Supervisory Board of Avtodor, a state company
  • Member of the Board of Directors of CJSC Echo Moskvy

Education:

Law Degree from Saint Petersburg State University (1997)

BoD committees:

Audit Committee, Strategy Committee

Sergei B. Kalugin

Executive director - CEO

Born : 1966
Member of the BoD since June 2013

Experience:
  • Chairman of LLC Mobitel (2013), CJSC Baikalwestcom, CJSC Yenisey telecom, CJSC Volgograd-GSM, CJSC Sky Link and CJSC Akos (2013-2014), Member of the Board of Directors of CJSC NSS and OJSC RTComm.RU;
  • Managing Partner at WebMediaGroup (2009-2013);
  • CEO of OJSC National Telecommunications (2007-2008, 2009-2012), OJSC National Cable Networks (2001-2007), RTR Signal (2000-2001);
  • Economist, Managing Director of Investments at AB Incombank; President of Inkom Capital, an investment and financial services company.

Other current positions:

  • President - CEO of OJSC Rostelecom;
  • Member of the Board of Directors of OJSC Giprosvyaz and LLC T2 RTK Holding

Education:

Degree in Economics from Lomonosov Moscow State University (1991)

BoD committees:

Corporate Governance Committee, Strategy Committee

Ruben A. Aganbegyan

Non-executive director

Born : 1972
Member of the BoD since June 2013

Experience:
  • Member of the Boards of Directors of CJSC "Clearinghouse RTS" Non-banking Credit Organisation (2010-2013), CJSC AKB "National Clearing Centre" (2010-2013), OJSC Svyazinvest (2013), OJSC MICEX-Information Technologies (2010-2013), CJSC MICEX (2010-2013);
  • General Director of Renaissance Capital Investment Company in Russia (2007-2009) responsible for enhancing and strengthening key account relationships, supervising public and government relations;
  • Managing Director for Project Financing with Troika-Dialog Investment Company, Head of Investment Banking Management (2002-2003);
  • Co-head of Credit Suisse First Boston in Russia (1997-2002);
  • PricewaterhouseCoopers, Clifford Chance (Moscow).

Other current positions:

  • General Director and member of the Board of Directors of Otkritie Financial Company (since 2012);
  • Chairman of the Board of Directors of OJSC Bank "Petrocommerts";
  • Member of the Board of Directors of the Non-Profit Organisation National Association of Securities Market Participants (NAUFOR), the All-Russian Public Organisation Russian Union of Industrialists and Entrepreneurs, the National Securities Market Association (Self-Regulating Non-Profit Organisation), OJSC Moscow Stock Exchange MICEX-RTS, Russian Exchange Union, OJSC TMK (Pipe Metallurgical Company)

Education:

Degree from Moscow State Law Academy (1995) specialising in jurisprudence

BoD committees:

Nominations and Remuneration Committee, Strategy Committee

David Benello

Non-executive director

Born : 1954
Member of the BoD since April 2014

Experience:
  • Director and Leader of UK Telecom, Media and Technology Practice at McKinsey & Company (1982-2011);
  • Extensive consulting experience in telco engagements, mainly in Europe (in addition to the US and Asia) on corporate strategy, ICT strategy and business turnarounds as well as operations / customer service;
  • In the early years of his career, he served as a Senior at Arthur Andersen and a Second Lieutenant at Scuola Militare Alpina, Aosta, Italy.

Other current positions:

  • Independent Non-executive Director at Telekom Malaysia and Telecom Italia;
  • Global Ambassador at Monitise;
  • Director Emeritus at McKinsey & Company

Education:

Bachelor in Mathematics and Masters in Mathematics from the University of Oxford (1976), Masters in Business Administration from Harvard University (1982)

BoD committees:

None

Kirill A. Dmitriev

Non-executive director

Born : 1975
Member of the BoD since April 2014

Experience:
  • President of Icon Private Equity, a leading private equity fund with over US$1 billion of assets under management (2007-2011);
  • Co-managing partner and CEO of Delta Private Equity Partners, a leading private equity fund in Russia with over US$500 million of assets under management (2002-2007);
  • Investment banker at Goldman Sachs in New York and a consultant at McKinsey & Co (1996-1999).

Other current positions:

  • CEO of the Russian Direct Investment Fund

Education:

BA from Stanford University and MBA from Harvard Business School

BoD committees:

Corporate Governance Committee, Strategy Committee

Anton A. Zlatopolsky

Non-executive director

Born : 1966
Member of the BoD since June 2011

Experience:
  • More than 20 years of experience in the media sector.

Other current positions:

  • Director of Russia State Television (since 2002) and Deputy General Director of FGUP VGTRK (since 2000)

Education:

Law degree from Lomonosov Moscow State University

BoD committees:

Nominations and Remuneration Committee, Corporate Governance Committee

Igor I. Kozlov

Non-executive director

Born : 1965
Member of the BoD since April 2014

Experience:
  • Managing Vice-President of the “High Technologies and Industry” Business Unit at JSFC Sistema (2010-2013);
  • Managing Director for Investments, Strategy and Communications at Uralsib Financial Corporation (2006-2010).

Other current positions:

  • Advisor to the Minister for Telecommunications of the Russian Federation

Education:

Degree in Technical Sciences from Riga Higher Military Aviation Academy, Air Force Engineering Academy n.a. professor N.E. Zhukovsky (1999)

BoD committees:

Audit Committee, Strategy Committee

Mikhail Y. Lesin

Non-executive director

Born : 1958
Member of the BoD since April 2014

Experience:
  • Chairman of the Management Board and General Director of OJSC Gazprom-Media Holding (2013-2014);
  • Board member of OJSC National Telecommunications (2010-2012) and Channel One (2004-2010);
  • Advisor to the President of the Russian Federation (2004-2009).

Education:

Moscow Kuibyshev Institute of Civil Engineering (1984)

BoD committees:

Audit Committee, Nominations and Remuneration Committee

Anatoly A. Milyukov

Non-executive director

Born : 1972
Member of the BoD since June 2011

Experience:
  • Member of the Board of Directors of OJSC Uralsvyazinform (2010), OJSC UTK (2011), OJSC NTK (2011-2012);
  • Chief Managing Director of Alfa-Capital Management Company (2001-2006).

Other current positions:

  • Managing Vice President of OJSC Gazprombank;
  • Member of the Board of Directors of CJSC Gazprombank-Asset Management, GBP Asset Management S.A. and CJSC New Instrumental Solutions.

Education:

Degree in Economics from Lomonosov Moscow State University and MBA from Harvard Business School (2001)

BoD committees:

Audit Committee, Strategy Committee

Mikhail I. Poluboyarinov

Non-executive director

Born : 1966
Member of the BoD since April 2014 (and in 2010-2011)

Experience:
  • Director of Department for Infrastructure at Vnesheconombank (2009-2012);
  • Deputy Director General of OJSC Aeroflot – Russian Airlines (2003-2009);
  • Chairman of LLC VEB Engineering (2011), OJSC Terminal (2006-2010), OJSC Insurance Company "Moscow" (2005-2009).

Other current positions:

  • First Deputy Chairman – member of the Management Board of Vnesheconombank (VEB),
  • CChairman of OJSC RusHydro and OJSC Zarubezhneft;
  • Member of the Board of Directors of OJSC Northern Caucasus Resorts, CJSC Lider and OJSC Sovcomflot.

Education:

Moscow Finance Institute, Department of Credit and Economics (1998), Postgraduate school of the Plekhanov Academy of Economics, PhD in Economics

BoD committees:

Audit Committee

Vitaly Y. Sergeichuk

Non-executive director

Born : 1984
Member of the BoD since April 2014

Experience:
  • Deutsche Bank, VTB Capital (2008-2012) and United Financial Group;
  • A total of 8 years’ experience in investment.

Other current positions:

  • Head of Property Management and Privatisation of the Largest Companies Division at the Federal Agency for State Property Management (FASPM)

Education:

Degree in Economics from Lomonosov Moscow State University (2005)

BoD committees:

Corporate Governance Committee, Strategy Committee

BOARD OF DIRECTORS MEMBERS UNTIL APRIL 2, 2014

Mikhail Y. Alekseev
Non-executive director
Born: 1964
Member of the BoD between
June 2013 and April 2014
Experience:
  • Chairman of the Management Board of UniCredit Bank (since 2008);
  • President and Chairman of the Management Board of the Russian Industrial Bank (2006-2008);
  • Chief Expert, Head of Division, Deputy Director of Department in the Russian Ministry of Finance;
  • Member of senior management in a number of financial organisations and industry boards;
  • Deputy Chairman of the Management Board of Oneximbank and Senior Vice President and Deputy Chairman of the Management Board of Rosbank when it was controlled by Interros (s. 1995);
  • Board Member, Head of Department of Inter-industrial Commercial Bank (1992-1995).
Education: Moscow Financial Institute (cum laude)
BoD committees: Strategy Committee
Mikhail M. Zadornov
Non-executive director
Born: 1963
Member of the BoD between
June 2013 and April 2014
Experience:
  • CEO and Chairman of Management Board at Bank VTB 24 (s. 2005);
  • Chairman of OJSC TransCreditBank (s. 2012), OJSC AKB Leto Bank (s. 2012), LLC Insurance company VTB-Insurance (s. 2013);
  • Member of the Board of Directors of OJSC Svyazinvest (2012-2013), OJSC Stolichnaya Insurance Group (s. 2012), OJSC AKB Bank of Moscow (s. 2013), OJSC Insurance Group MSK (s. 2013);
  • Member of the State Duma of the Russian Federation and membership in various Duma committees, including Deputy Chairman of the Budget and Taxes Committee (1993-1997, 1999-2005);
  • Minister of Finance of the Russian Federation and other positions in the Russian Government (1997-1999), First Deputy Chairman of the Government of the Russian Federation (s. 1999);
  • Member of the Board of Directors (1997), Deputy Chairman of the Supervisory Board (1998), Counsellor of President (1999) of OJSC Sberbank.
Education: General Economics Faculty of G.V. Plekhanov Moscow National Economy Institute majoring in Planning of the National Economy with a specialisation in Economics (honours diploma, 1984), PhD in Economics (1988)
BoD committees: Strategy Committee
Yury A. Kudimov
Non-executive director
Born: 1953
Member of the BoD between
June 2010 and April 2014
Experience:
  • General director of LLC VEB Capital, investment Company of Vnesheconombank (s. 2010);
  • Chairman VEB-Invest LLC and Globeks-Capital LLC, Member of the Boards of Directors of OJSC Svyazinvest (2011-2013), OJSC First Freight Company, and OJSC Terminal;
  • President and Chairman of the Management Board (2005-2008) and Chairman of the Board of Directors (2008-2009) of OJSC National Reserve Bank.
Education: Degree in Journalism from Lomonosov Moscow State University (1979), Master?s in Banking and International Financial Systems from Dowling College (1998).
BoD committees: Audit Committee, Nominations and Remuneration Committee
Sergey A. Kulikov
Non-executive director
Born: 1976
Member of the BoD between
June 2013 and April 2014
Experience:
  • Head of Staff under Director-General and Executive Director of Rostec State Corporation (s. 2008);
  • Member of the Board of Directors of YOTA HOLDING (CYPRUS) LIMITED (s. 2009), OJSC National Ecologic Operator (s. 2012), OJSC Voentelecom (s. 2012);
  • Professor of the Academy of Military Sciences and Associate Professor in the Department of Entrepreneurship and Foreign Economic Affairs (IBM-6) at the Bauman Moscow State Technical University.
Education: Military University of the Russian Ministry of Defence, Russian Academy of Public Service under the President of the Russian Federation
BoD committees: Corporate Governance Committee, Strategy Committee
Alexander A. Pchelintsev
Non-executive director
Born: 1970
Member of the BoD between
June 2013 and April 2014
Experience:
  • General Director of CJSC Gazprombank Asset Management (since 2011), Deputy Head of Asset Management department - Head of Sales at OJSC Gazprombank (2006-2011);
  • General Director of Alfa-Capital Management Company for 8 years, and, before that, Portfolio Manager with Pallada Asset Management.
Education: Irkutsk Institute of Economy (cum laude), PhD in Economics
BoD committees: Nominations and Remuneration Committee, Corporate Governance Committee
Ivan I. Rodionov
Non-executive director
Born: 1953
Member of the BoD between
May 2009 and April 2014; Chairman of the BoD between June 2011 and June 2013
Experience:
  • Professor at the Russian State University for Humanities (s. 2006) and at the National Research University ? Higher School of Economics (s.2003);
  • Member of the Board of Directors and Member of Audit committee of OJSC Svyazinvest (2009-2013);
  • Member of the Board of Directors of OJSC FosAgro (s. 2004), OJSC IBS Group Holding (s. 2000), OJSC EnergoMashinostroitelny Alliance (s. 2005), OJSC Rusinvest (s. 2009), OJSC Amofos (s. 2011), OJSC MGTS (2005-2007);
  • Managing Director of AIG-Interros RCF Advisor (2004-2006).
Education: Degree in Economics from Lomonosov Moscow State University (1978)
BoD committees: Audit Committee, Nominations and Remuneration Committee

BOARD OF DIRECTORS ACTIVITIES IN 2014

During 2014, the Board of Directors held 39 sessions, five of which were held in the form of meetings.

The key decisions made by the Board of Directors in 2014 included:

  • Approval of the framework agreement with Tele2 Russia that led to the integration of its mobile assets with Rostelecom’s mobile assets (February 2014);
  • Agreement on the Company’s participation in the Noncommercial partnership «Media-Communications Union», aimed at promoting the development of the media industry and supporting the legal forms of creating, distributing and consuming media content (February 2014);
  • Approval of the Long-term incentive plan for the Company’s management (March 2014);
  • Approval of the Company’s updated budget for 2014 following the reorganisation in the form of spinning off its mobile assets into CJSC RT-Mobile (June 2014);
  • Review of several M&A deals;
  • Oversight of the preparation of the Company’s Long-term Development Programme. The Programme was approved in January 2015 and covers the period between 2015 and 2018. The Programme was prepared in accordance with FASPM’s requirements and is an instrument for FASPM to assess the Company’s performance. It also complements the Company’s existing Strategy, approved by the Board of Directors in December 2013;
  • Approval of the Company’s Key Performance Indicators (KPI) policy for senior management (December 2014);
  • Approval of the Company's budget for 2015.

BOARD OF DIRECTORS’ COMMITTEES

Four Committees were established to enhance the Board’s efficiency: Audit Committee, Nominations and Remuneration Committee, Corporate Governance Committee and Strategy Committee. Members of the Board committees are re-elected annually. In addition, on December 22, 2014, the Board of Directors decided to create an Investments Committee, which will start its work in 2015.

Audit Committee

The Audit Committee was established in December 2004 by the Board of Directors and performs its functions in accordance with the regulations approved by the Board.

As of December 31, 2014, the Audit Committee consisted of five non-executive Directors. In 2014, the Audit Committee’s key areas of focus included the risk management programme and enhancing the quality of internal audit.

The goals and objectives of the Audit Committee, as set forth in its regulations, are to assist the Board of Directors in carrying out its oversight responsibilities in the areas of:

  • the quality and integrity of the Company’s financial statements;
  • the qualifications and independence of the Company’s auditor;
  • the functions and responsibilities of the independent auditor;
  • monitor the activities of the internal auditor; and
  • compliance with legal and regulatory requirements.

Independent Auditor

The Board of Directors and the Audit Committee recommended that JSC KMPG be appointed as the Company’s Independent Auditor for 2014. The AGM approved this appointment on June 30, 2014.

JSC KPMG rendered the following services to Rostelecom: audit of consolidated financial statements, including financial statements prepared in accordance with RAS and IFRS, and review of condensed consolidated interim financial statements prepared in accordance with IFRS. The Auditor received compensation for its audit-related services in the amount of RUB 127.4 million for 2014. The Auditor did not render any consulting services in respect of auditing Rostelecom’s financial statements or any other consulting services.

Nominations and Remuneration Committee

The Board’s Nominations and Remuneration Committee was established in September 2003 and performs its functions in accordance with the regulations approved by the Board of Directors.

As of December 31, 2014, the Nominations and Remuneration Committee consisted of three non-executive Directors.

The goals and objectives of the Nominations and Remuneration Committee, as set forth in its regulations, are to assist the Board of Directors in carrying out its oversight responsibilities in the areas of:

  • development of Rostelecom’s policy with regard to appointing members of the Management Board;
  • preparation of recommendations for the appointment of the General Director;
  • determination of the qualifications of candidates for the Board of Directors;
  • development of the policy defining the principles and criteria determining the compensation of members of the Board of Directors, the Audit Commission, the President and members of the Management Board, as well as criteria for the appraisal of their activity;
  • preparation of recommendations on the Company’s personnel policy, including the employee incentive system; and
  • appraisal of the management’s activities.

Corporate Governance Committee

The Board’s Corporate Governance Committee was established in March 2008 by the Board of Directors and performs its functions in accordance with the regulations approved by the Board of Directors.

As of December 31, 2014, the Corporate Governance Committee consisted of seven members, including one executive and three non-executive Directors, Corporate Secretary and two advisors appointed on December 4, 2014. The composition of the Committee is intended to foster the implementation of the best corporate governance practices in the Company thanks to a potent combination of its members’ various expertise and vast track record.

The goals and objectives of the Corporate Governance Committee, as set forth in its regulations, are to assist the Board of Directors in carrying out its oversight responsibilities in the areas of:

  • issues related to the Company’s Corporate Secretary;
  • convocation, preparation and holding of annual and extraordinary general meetings of shareholders with due consideration for the best corporate governance practices;
  • approval of and amendments to the Company’s internal document(s), setting forth internal rules for disclosure, as well as establishing procedures for using non-public information about Rostelecom’s operations, securities and transactions relating to such securities;
  • submission for voting by the general meetings of shareholders of the proposals to approve or make amendments to the Company’s Charter and other internal documents governing the operations of the management bodies;
  • approval of and amendments to the Corporate Governance Code, annual assessment of and recommendations to the Board of Directors concerning the inclusion of information about compliance in the annual report with the Corporate Governance Code recommended by the FSFM, as well as ensuring compliance with our Corporate Governance Code;
  • resolution of various corporate conflicts;
  • oversight of compliance with ethical norms reflecting corporate social responsibility;
  • review of the Company’s compliance with the requirements of applicable laws; and
  • preparation of recommendations for the appointment of the registrar.

Strategy Committee

The Strategy Committee was established in September 2003 by the Board of Directors and performs its functions in accordance with regulations approved by the Board of Directors.

As of December 31, 2014, the Strategy Committee consisted of ten members, including one executive and seven non-executive Directors, two members of the Management Board (besides the CEO) and a member of the Audit Commission appointed on December 4, 2014. The composition of the Committee benefits the Company by combining an outside perspective and wide experience of non-executive directors with the Management’s enhanced understanding of the Company’s operations.

The key areas of focus of the Strategy Committee in 2014 included the transformation of the Company’s business, budgeting and the Long-term Development Programme.

The goals and objectives of the Strategy Committee, as set forth in its regulations, are to assist the Board of Directors in carrying out its oversight responsibilities in the areas of:

  • preliminary consideration of and preparation of recommendations for the strategic development plan;
  • oversight of implementation of the strategic development plan;
  • preliminary consideration and preparation of recommendations and policy in respect to participating in other organisations;
  • preparation of recommendations for the Company’s dividend policy;
  • preliminary consideration and preparation of recommendations in respect to amending the Company’s Charter capital;
  • preliminary consideration and preparation of recommendations for approval of major transactions and interested-party transactions;
  • preliminary consideration and preparation of recommendations in respect to reorganisation and liquidation;
  • preparation of recommendations for the implementation of the investment planning and monitoring procedures;
  • preparation of recommendations for the review of the Company’s current strategy; and
  • preparation of recommendations for improving procedures for interaction with affiliated and subsidiary companies.

[1] The business address for each of our Directors is 14, 1-st Tverskaya-Yamskaya Street, Moscow 125047, Russian Federation.
[2] Hereinafter information is provided on the Board of Directors elected on April 2, 2014, unless stated otherwise.

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