Corporate Governance

In accordance with modern approaches to corporate governance based on best practices, and in line with the Russian statutory requirements, the corporate governance at NSD covers the overall management of the company’s activities by the General Meeting of Shareholders and Supervisory Board, as well as relations with NSD’s management bodies and other stakeholders (i.e., employees, customers, partners, counterparties, banking regulatory supervisory authorities, and other government authorities and agencies) in connection with:

• setting strategic objectives for NSD and implementing an effective governance system;
• providing proper incentives for NSD’s management and employees to pursue NSD’s strategic objectives;
• maintaining the balance of shareholders’ interests and interests of Supervisory Board members, executive bodies’ members, and other stakeholders; and
• ensuring compliance with the Russian laws and regulations, NSD’s Articles of Association and internal regulations.

NSD adheres to the key OECD principles of corporate governance reflected in the Shareholders Agreement with respect to NSD, under which the corporate governance system should:

• ensure the equitable treatment of shareholders, meaning that all shareholders must be able to seek remedies in case of any violation of their rights;
• recognize the rights of stakeholders established by law;
• ensure that timely and accurate disclosure is made on all material matters regarding NSD, including the financial situation, performance, ownership, and governance of NSD; and
• ensure the strategic guidance of NSD, and the efficient monitoring of management by the General Meeting of Shareholders and Supervisory Board.

To enable its shareholders to make informed decisions and to ensure the transparency of its operations, NSD discloses, in a timely fashion, full and accurate information on its activities, as required by the Russian laws and NSD’s internal regulations, including information on the company’s financial standing, performance indicators, ownership structure, and governance structure.

• NSD’s shareholders enjoy equal rights to get access to any corporate information.
• NSD’s shareholders and other stakeholders may receive full and accurate information, including information on NSD’s financial standing, performance, governance, shareholders, and any material facts that affect NSD’s financial and business activities.
• NSD has controls in place to ensure that its internal information and trade secrets are kept confidential, and the use of the same is monitored.

NSD assesses its corporate governance system in accordance with the Bank of Russia’s recommendations laid down in its Letter No. 11-T “On a Corporate Governance Assessment Questionnaire for Credit Organizations” dated 7 February 2007.

In accordance with NSD’s Articles of Association, the company’s corporate governance system is assessed at least once a year. Upon completion of such assessment, a corporate governance report is prepared and submitted to the Supervisory Board for approval.