Moscow Exchange Group’s corporate governance system is based on Russian statutory rules and recommendations issued by the Central Bank of Russia, as well as on international best practices
and standards. To improve the quality and effectiveness of corporate governance, the system is constantly being improved to align with the requirements of regulatory bodies, the opinions of shareholders and investors, and the Group’s development strategy.
The corporate governance system of Moscow Exchange Group is comprised of the following governing, auxiliary, and control bodies:
- the General Shareholders Meeting is the supreme governing body;
- the Supervisory Board handles general management of Moscow Exchange’s activities and strategic management;
- the Supervisory Board committees have an advisory role; their responsibilities include preliminary consideration and formulation of recommendations to help the Supervisory Board decide crucial issues;
- the chairman of the Executive Board and the Executive Board itself are the executive governing bodies; they govern day-to-day activities at Moscow Exchange;
- the Internal Control and Internal Audit services oversee the effectiveness of risk management and corporate governance practices and compliance with legal requirements, corporate policies, and business processes, and also perform other functions; an independent external auditor reviews and confirms the Group’s financial reports;
- the user committees are advisory bodies of Moscow Exchange;
- the Corporate Governance Department and the Corporate Secretary coordinate the Exchange’s actions to protect shareholders’ rights and interests.
Moscow Exchange’s Corporate Governance Code is in force at the Group; it sets out core principles and objectives of the corporate governance system, including the principles of implementing corporate governance which are to be followed by the Group’s companies. A top-level approach to management approved at Moscow Exchange and then integrated at all companies of the Group. NCC and NSD strive to implement all requirements relevant to Moscow
Exchange in their activities.
Corporate Governance Code
The Corporate Governance Code sets out the main principles and objectives of Moscow Exchange’s corporate governance system.
Moscow Exchange regularly monitors and evaluates external changes and, if necessary, quickly responds to the development of legislation and corporate governance practices in Russia and abroad, including by amending its own Corporate Governance Code.
The current version of the Corporate Governance Code approved in 2019 by decision of the Moscow Exchange Supervisory Board covers several provisions related to corporate social responsibility, including:
- the procedure for conducting self-evaluation of the Supervisory Board annually and for conducting external evaluation by independent consultants every three years;
- the procedure for selecting a senior independent director;
- the succession program for members of the Executive Board;
- the procedure for managing conflicts of interest;
- sections on initiatives related to environmental efficiency, business ethics and prevention of corruption.
General Shareholders Meeting
The General Shareholders Meeting acts in accordance with Russian legislation and the Charter
of Moscow Exchange.
The Supervisory Board is the main governing body of Moscow Exchange, acting in accordance
with the Charter and the Regulation on the Supervisory Board of Moscow Exchange, approved by the General Shareholders Meeting. The committees under the Supervisory Board consider sustainability-related issues in accordance with their scope of authority.
Supervisory Board members are elected by the General Shareholders Meeting to sit on the Board until the next Annual General Shareholders Meeting. The members of the Supervisory Board are elected by cumulative voting.
The competence of the Supervisory Board is defined in the Charter and is delimited from the competence of Moscow Exchange’s executive bodies, which manage its day-to-day activities. In particular, the Supervisory Board is responsible for approving the mission, strategy, and performance targets of Moscow Exchange, as well as most of its internal policies; it also takes decisions on pressing issues that affect the implementation of the strategy and the Group’s long-term development.
External and internal evaluation
As per the recommendations of the Corporate Governance Code of the Central Bank of Russia and best international practices, the Supervisory Board of Moscow Exchange self-assesses the effectiveness of its activities annually. In addition, an external evaluation involving an independent consultant is carried out once every three years; the next is scheduled for 2022.
Remuneration of the Supervisory Board members
The system of remuneration of Supervisory Board members is set out in the Regulation on Remuneration and Compensation of Expenses, approved by resolution of the Annual General Shareholders Meeting. Each Supervisory Board member is paid a fixed amount, depending on
- the Supervisory Board member’s status (compliance with the independence criteria);
- additional functions performed (as chairman or deputy chairman of the Supervisory Board);
- contribution to the work of the committees under the Supervisory Board (as committee chairman or member);
- attendance at meetings of the Supervisory Board.
As per the current legislation of the Russian Federation, the "say on pay" concept is not applicable.
The Executive Board manages the day-to-day operations of Moscow Exchange. The chairman of the Executive Board acts on behalf of Moscow Exchange without the need for a power of attorney. He or she represents its interests, issues orders, gives instructions mandatory for all Moscow Exchange employees, and delegates certain powers.
Remuneration of Moscow Exchange executives
The system of remuneration of Moscow Exchange executives is regulated by the Policy on Remuneration and Compensation of Expenses of Executive Body Members. The policy sets out the principles of and approaches to remuneration; it establishes the procedure for determining the amount of remuneration and the types of payments, benefits, and perks granted to executive body members. Remuneration consists of a fixed and a variable component. The variable component accounts for a significant share of annual pay.
There are plans to review and implement sustainability KPIs for Executive Board members. Consultants are not involved in determining remuneration.
The total amount of remuneration to be paid to Executive Board members is assessed by the Nomination and Remuneration Committee for compliance with the remuneration level at comparable companies, based on research purchased from leading consulting companies. Members of Moscow Exchange’s executive bodies are not paid remuneration for their work on the governing bodies of other companies of the Group.
Preventing conflicts of interest
In order to prevent conflicts of interest among members of the governing bodies, the Policy on Management of Conflicts of Interest and Corporate Disputes has been adopted. The key principles of this policy include
- the requirement that members of the Supervisory Board, members of the Executive Board, and the chairman of the Executive Board notify Moscow Exchange of conflicts of interest;
- priority of the interests of Moscow Exchange and its shareholders over the personal interests of the members of Moscow Exchange’s governing bodies;
- contribution of the Supervisory Board to the prevention, identification, and settlement of corporate conflicts;
- priority participation of independent directors in preventing corporate disputes and performance of significant corporate actions by Moscow Exchange.
A list of affiliated persons is disclosed on the Moscow Exchange website to inform shareholders and other interested parties.
See the corresponding report for information on interested party transactions made by Moscow Exchange in the reporting year.
- Federal Law No. 208-FZ dated 26 December 1995 "On Joint-Stock Companies"
- Federal Law No. 325-FZ dated 21 November 2011 "On Organized Trading"
- Central Bank of Russia Corporate Governance Code
- Listing Rules of the Moscow Exchange
- G20/OECD Corporate Governance Principles
- Internal policies, regulations and other bylaws, including the following:
- Charter of Public Joint-Stock Company Moscow Exchange MICEX-RTS
- Regulation on the Identification and Prevention of Conflicts of Interest by Public Joint-Stock Company Moscow Exchange MICEX-RTS When Acting as a Trading Organizer and Financial Platform Operator
- Succession Policy for Members of the Supervisory Board of Public Joint-Stock Company Moscow Exchange MICEX-RTS
- Regulation on the Stock-based Long-term Incentive Program for Key Experts of Public Joint-Stock Company Moscow Exchange MICEX-RTS