Performance assessment of the Board of Directors GRI 102–27, GRI 102–28

According to the Regulation on the Board of Directors and clause 2.9.2 of the Corporate Governance Code, the performance of the Board of Directors as well as its committees and members should be evaluated on a regular basis at least once a year. In addition, it is recommended to periodically hire an external organization – at least once every three years – to conduct an independent assessment of the quality of work by the Board of Directors.

The last independent assessment of the activities of the Board of Directors and its committees was carried out in 2019. Information on its results and the recommendations that were given and implemented is disclosed in the Inter RAO Annual Report for 2019.

A self-assessment of the effectiveness of the Board of Directors was conducted in 2020. The assessment process included questionnaires as well as an analysis of self-assessment materials. The average score was 4.76 points (out of 5 possible points).

Self-assessment process
February 2020

Procurement procedures to select the administrator of the self-assessment procedures

March 2020

Resolution of the Board of Directors on the self-assessment and approval of the administrator

April 2020

Completion of questionnaires by members of the Board of Directors and its committees

June 2020

Preliminary review of the report by the Nomination and Remuneration Committee and instructions to improve the activities of the Board of Directors and its committees

Review of the report by the Board of Directors and approval of the list of instructions of the Nomination and Remuneration Committee

May 2020

Preparation of a report on the results of the self-assessment and recommendations for improving the activities of the Board of Directors and its committees

The majority of the members of the Board of Directors noted the balanced composition of the Board and the optimal combination of experience and expertise. The directors have high regard for the Company’s risk management and internal control systems. They note the particular importance of ESG expertise and knowledge on economic recovery following the global pandemic.

Based on the results of the self-assessment conducted by the Board of Directors and its committees, the Nomination and Remuneration Committee drew up recommendations to improve the activities of the Board of Directors, which, along with the results of the self-assessment, were reviewed at a meeting of the PJSC Inter RAO Board of Directors on June 28, 2020 Minutes No. 276 dated June 29, 2020 and approved as instructions from the Board of Directors.

Results of the self-assessment of the Board of Directors
Results of the self-assessment of the Board of Directors
Instructions for improving the activities of the Board of Directors and its committees
Instructions Execution and results
Ensure the drafting of recommendations on the procedure for nominating candidates to the Board of Directors and their approval by the Nomination and Remuneration Committee with their subsequent inclusion in the Regulation on the Board of Directors. The recommendations of the Nomination and Remuneration Committee on the procedure for nominating candidates to the Board of Directors were approved by the Board of Directors on December 16, 2020.
The new version of the Regulation on the Board of Directors (including recommendations for nomination) was proposed for approval by the annual General Meeting of Shareholders in 2021.
Propose the inclusion of the following seminar/workshop themes in the Training and Development Program for Members of the Board of Directors for 2020–2021:
  • Digital technologies, digitalization of production, and their impact on the power generation industry
  • Changes in legislation regulating activities in the energy sector
  • Sustainable development (ESG) and economic recovery following the global pandemic.
These themes are included in the Training and Development Program (approved as part of the Succession Plan for Members of the Board of Directors and the Management Board on September 25, 2020).
Management shall submit a draft procedure for notifying the Board of Directors about emerging risks for review by the Audit and Sustainable Development Committee. The procedure for notifying members of the Board of Directors was approved by the Audit and Sustainable Development Committee on December 15, 2020. This Procedure establishes and governs the procedure for promptly notifying members of the Audit and Sustainable Development Committee of the Board of Directors and members of the Board of Directors about critical risks that have materialized as well as other risks that have a significant impact on EBITDA or operating cash flow or create a threat of the failure to achieve the Group’s targets not included in the Inter RAO Group’s Critical Risk Map.
Ensure a detailed discussion of the methodology for assessing the degree of implementation of strategic development priorities at a joint face-to-face meeting of the Strategy and Investment Committee and the Audit and Sustainable Development Committee. The issue was reviewed at a joint in-person meeting on November 24, 2020 (via videoconferencing).
Include a joint meeting in the Work Plans of the Strategy and Investment Committee, the Audit and Sustainable Development Committee, and the Nomination and Remuneration Committee on the issue of reviewing the updated Inter RAO Strategy/Long-Term Development Program with respect to the KPIs and PBs of the Management Board members as well as the long-term incentive program for management. The issue was reviewed at a joint meeting on November 24, 2020.
Ensure that the members of the Company’s Strategy and Investment Committee are invited to meetings of the Audit and Sustainable Development Committee at which the Sustainable Development (ESG) Reports are reviewed. Executed on a regular basis.
Continue the practice of disclosing information about the foreign business segment in the Company’s reporting on businesses. Executed on a regular basis.
Continue the practice of reviewing issues concerning the Company’s investment appeal, including the dividend policy and the balanced distribution of profits, at a meeting of the Board of Directors with preliminary review at a meeting of the Strategy and Investment Committee as part of the Investor Relations Report. The issue was reviewed by the Strategy and Investment Committee on March 5, 2021 and by the Board of Directors on March 16, 2021.
Consider the issue of a long-term incentive program for management at an in-person meeting of the Nomination and Remuneration Committee, taking into account an analysis of best remuneration practices. The issue was reviewed at an in-person meeting of the Committee on November 24, 2020 (via videoconferencing).
Take into account the epidemiological situation in Russia and around the world when planning offsite meetings of the Board of Directors. No offsite meetings were held in 2020 due to the COVID-19 pandemic.