Оао “Северные магистральные нефтепроводы”
Text 3
Pre-reading task
a) Discuss the following questions before reading the text.
Is it possible for one person to govern a company? Does it depend on the size of the company? Do you think the type of proprietorship affects the way of governance? If yes, how?
Do you know what “The Board of Directors” do in the company? Does every company have “The Board of Directors”? Who can be its member, in your opinion? What kind of person and specialist should he/she be?
b) Key words: corporate governance, merger, share holder, transparency, compliance with laws, affiliate, subsidiary, auditor, executive officer, nominee, vacancy, retirement.
Look up the key words in the dictionary to find out the exact meaning. Write them out.
Reading Committing to High Standards of Corporate Governance (Rosneft)
Rosneft is committed to high standards of corporate governance. The Company has three independent non-executive directors who currently comprise one-third of the Company’s Board of Directors and chair the Board’s Audit Committee, Strategic Planning Committee, as well as HR and Remuneration Committee.
Rosneft recently completed the consolidation of several of the Company’s subsidiaries into the Company through a statutory merger and an exchange of shares. The Share Swap simplifies corporate structure and will allow Rosneft to restructure management at the operational level, thereby improving accountability, clarifying responsibilities and streamlining information reporting and decision-making. Lastly, the Share Swap will allow minority shareholders in the Merging Subsidiaries to share in the future success of Rosneft at the level of the listed parent company.
Successfully realizing this strategy will establish Rosneft as the benchmark in the Russian energy sector. In working towards this goal, the Company looks forward to generating unparalleled value for shareholders and playing a key role in the development of Russia’s economy.
In executing our strategy, Rosneft is focused not only on creating value for our shareholders, but also on adhering to the highest standards of corporate governance. Indeed, we are convinced that these issues are not distinct and that a commitment to transparent and responsible management of the business is essential to maintaining the trust of the investment community and maximizing the returns we generate for all our shareholders over the long-term.
Good corporate governance is both a prime consideration for our international project partners and a characteristic of the world’s most respected companies. We believe that good corporate governance benefits all stakeholders in our Company, including our customers, suppliers, partners, employees and shareholders. As the steward of our shareholders’ interests, Rosneft’s management team will always act in the interests of minority and majority shareholders alike, without distinction.
Transparency in financial reporting is one important aspect of corporate governance. Rosneft has an established record of releasing quarterly, semi-annual and annual reports under US GAAP, and we will continue this practice in the future. As part of an ongoing effort to further enhance our US GAAP financial reporting as a public company, we expect to further reduce the time between the end of our financial reporting periods and the publication of our financial results.
One of the most visible manifestations of the Company’s commitment to strong corporate governance principles is the composition of its Board of Directors and board committees. We have recently appointed independent non-executive directors to fill three of the nine board seats:
Andrey Kostin, President and Chairman of Vneshtorgbank,
Alexander Nekipelov, Vice President of the Russian Academy of Sciences,
Hans-Joerg Rudloff, Chairman of the Executive Committee of Barclays Capital,
These highly respected individuals chair the Company’s HR and Remuneration Committee, Strategic Planning Committee and Audit Committee, respectively.
Rosneft understands that a reputation for adherence to the highest standards of corporate governance is something no newly-public company is automatically granted, but rather something that must be earned over an extended period. As we seek to grow our business and meet the energy challenges of tomorrow, we are also determined to earn this trust and reputation through an unwavering commitment to the principles of transparent and responsible management.