CHAPTER 6

Corporate governance

Corporate governance arrangements

8
Corporate governance structure
BOARD OF DIRECTORSBOARD COMMITTEESAUDIT AND SUPERVISION COMMITTEEMANAGEMENT BOARDGENERAL DIRECTOREXECUTIVE MANAGEMENTGENERAL MEETING OF SHAREHOLDERS(Russian Export Center JSC is the sole shareholder)

The General Meeting of Shareholders is the Agency’s supreme governing body. Resolutions on the competence of the General Meeting of Shareholders are passed by Russian Export Center JSC, the sole shareholder of the Agency.

The Board of Directors of the Agency implements general management functions and resolve all issues except for those that fall under the responsibility of other management bodies of the Agency under the legislation of the Russian Federation and the Charter of EXIAR.

As of 31.12.2019, the Board of Directors included:

  • Slepnev Andrey Aleksandrovich – Chairman of the Board of Directors, General Director of Russian Export Center JSC;
  • Gusakov Nikita Valeryevich – General Director of EXIAR JSC;
  • Osmakov Vasiliy Sergeevich – Deputy Minister of Industry and Trade of the Russian Federation;
  • Konstandyan Artyom Georgievich – member of the Board of Directors of EXIAR JSC;
  • Maksimov Timur Igorevich – Deputy Minister of Economic Development of the Russian Federation;
  • Osipov Leonid Viktorovich – Deputy Head of Presidential Experts’ Directorate;
  • Storchak Sergey Anatolyevich – Deputy Minister of Finance of the Russian Federation.

The Audit and Supervision Committee was established under the Agency’s Board of Directors. This is the Agency’s advisory body created to address the most important issues within the competence of the EXIAR’s Board of Directors and prepare respective recommendations.

The Management Board is the Agency’s collegial executive body that manages current operations.

The General Director of EXIAR JSC is the Agency’s sole executive body.

EXIAR’s General Director is the Chairman of the Management Board. Gusakov Nikita Valeryevich is the General Director of EXIAR.

Executive bodies are accountable to the General Meeting of Shareholders and the Board of Directors.

Internal audit system

EXIAR JSC has established a three-tier internal control system based on a risk-oriented organizational model that provides for the distribution of powers, duties and responsibilities of internal control actors (management bodies, collegial bodies, heads of department, internal audit managers and other employees performing internal control functions), based on “three lines of defense” principle:

  • 1
    line of defense: control functions performed by managers and employees through the internal control procedures and compliance with established rules and restrictions to ensure that the risks assumed match the target level;
  • 2
    line of defense: functions of risk management, compliance control, information security aimed at ensuring control over the level of risks that can affect the achievement of strategic goals and key performance indicators of the Agency;
  • 3
    line of defense: internal audit function that ensures independent and fair assessment of internal control systems, risk management and corporate governance processes, as well as the effectiveness of business processes developed at the first and second lines of defense.

The internal audit function has been established as part of the integration process of the REC Group companies. This function ensures the application of uniform approaches to the development and coordination of internal audit activities in the companies of the REC Group. For example, the consolidated audit plan for the REC Group was approved in the reporting year.

The plan provides for the audit of certain areas of activity for each company in the REC Group and conducting a walk-through audit of the common business processes for REC JSC, EXIAR JSC and EXIMBANK JSC.

In 2019, the Agency conducted an audit of investment activities and procurement activities.

Corporate social responsibility, business ethics, corporate governance code

Human capital is of prime importance for achieving the strategic goals of EXIAR. Therefore the Agency’s personnel policy is aimed at attracting and retaining competent employees, increasing the involvement and interest of each employee in achieving the organizational goals, developing the potential of employees and creating favorable working conditions.

The employees are treated in strict compliance with the requirements of the Labor Code of the Russian Federation.

In 2019, the organizational structure of the Agency and the REC Group as a whole were continued to be improved.

The REC Group pays great attention to the development and maintenance of a unified corporate culture. So, identify growth points in early 2019, a comprehensive study was conducted on the level of involvement of employees of the REC Group of Companies. 231 employees of the REC Group passed the study, which is 42% of the total number of employees. The study helped identify the main factors of negative employee loyalty. Based on these data, a set of measures was proposed aimed at increasing employee loyalty and awareness.

The REC Group pays great attention to the development and maintenance of a unified corporate culture. So, identify growth points in early 2019, a comprehensive study was conducted on the level of involvement of employees of the REC Group of Companies. 231 employees of the REC Group passed the study, which is 42% of the total number of employees. The study helped identify the main factors of negative employee loyalty. Based on these data, a set of measures was proposed aimed at increasing employee loyalty and awareness.

For example, to identify growth points in early 2019, there was conducted a comprehensive study on the degree of involvement of REC Group’s employees. 231 employees of the REC Group took part in the study, which is 42% of the total number of employees. The study helped identify the main factors of the negative attitude of the employees. Based on these data, a set of measures was proposed aimed at increasing employee loyalty and awareness.

To implement this measure in 2019:

  • A corporate portal is constantly developing, which is a tool for communication, knowledge and ideas sharing, feedback collection and professional work. To increase employee awareness of the new events held by the Group, 32 weekly newsletters were drawn up, 300 news articles were published, 13 articles were introduced to Export-Wiki knowledge base, HR news began to be distributed weekly, which were aimed to inform the employees about the main corporate working instruments.
  • To identify experts by industry and country on the corporate portal, there was introduced the qualification field with three columns into the employee’s profile, namely: knowledge of languages, qualifications and field of expertise.
  • Regular meetings were organized with HR representatives to discuss critical topics, which helped to increase employee loyalty during the corporate transformation.
  • A number of strategic sessions were held to develop “Sectoral Strategies and Plans for the Development of Service Export” and proposals for their inclusion in the second regulatory package under the “Systemic Development Measures for International Cooperation and Export” federal project.

To maintain the corporate culture in 2019, EXIAR JSC developed an Employee Code of Conduct for the employees of the REC Group. The Code was made in the form of a poster with basic rules and reminders for employees, proclaiming accepted behavior and important things. The Code is based on the results of a strategic session on corporate culture held jointly with the REC Group’s value ambassadors in July 2019, the internal labor regulations, as well as the developed rules of open-office etiquette, discussed with employees.

As part of the maintenance and popularization of the Mission and Values of the REC Group, which were presented to the employees in December 2018, three events were organized and held in 2019. The first one was dedicated to the visualization of the REC Group’s values, the second – to compliance with the values and the third – children’s drawing contest. The winners were awarded by the General Director of the REC Group.

In 2019, the REC Group continued to support volunteering activities. It held a charity event to collect clothes and other things for foster children from the Sosensky educational orphanage, Donor Day, together with VEB.RF and Joy of Old Age Fund raised funds for the Vyshnevolotsky care home.

Within the framework of the “Dream with me” federal project the “Wish Tree” charity event was held. The philanthropists provide magic and joy as a gift, e.g. a meeting with an idol, a set for drawing, etc., rather than treatment or purchase of necessary technical equipment.

To create an effective system for employee development and recognition, in 2019, the HR management department introduced an approach to the development of an expert career for REC Group employees.

16 employees of EXIAR JSC received Acknowledgments from the General Director for job achievements. The respective entries were made in their employment record books.

As part of attracting young ambitious specialists to the REC team, the REC Group participated in the Professional Training 2.0 project, which is a new mechanism for interaction between undergraduates of educational institutions and an employer, onboarding students and ensuring internships as a social elevator for young people. The company collected, edited and posted 16 cases on the corporate website, provided communication support for the project, translated 16 cases of the REC Group into English to attract foreign students. On 14 November 2019, Russia – Land of Opportunity autonomous non-profit organization and Russian Export Center entered into the agreement on cooperation and interaction under the “Professional Training 2.0” project within the framework of “Made in Russia” international forum.

General provisions of the remuneration policy of EXIAR JSC

EXIAR JSC has a comprehensive employee performance management system covering the whole organization hierarchy.

The Agency’s goal-setting is carried out in stages in accordance with the unified principles of decomposition and continuity:

  • strategic planning (target strategic benchmarks of EXIAR JSC);
  • operationalization of the strategy (corporate performance indicators of EXIAR JSC for a year);
  • decomposition of indicators to meet individual areas and specific employees (individual performance indicators);
  • systematic planning of project indicators for a year (measurable goals with deadlines and those responsible for the implementation of individual activities and the results of the projects as a whole).

EXIAR’s remuneration system is governed by the Employee Incentive and Remuneration Policy and is aimed at maintaining a competitive salary level that allows attracting highly qualified specialists to the organization and establishing a correlation between the results achieved and the amount of remuneration.

Employee Incentive and Remuneration Policy was amended in 2019. A new remuneration component was introduced, i.e. an annual bonus for ensuring the Agency’s long-term financial results. This bonus is aimed at motivating employees who assume risks for the long-term goals of the organization, in particular, for the Agency’s positive financial result.

The employee performance evaluation system is based on the assessment of the personal (individual performance indicators) and team (corporate performance indicators) performance. Performance assessment is carried out quarterly and annually. The aggregate KPI is formed based on the results of the assessment. This KPI determines the size of the variable component of the employee’s remuneration. An employee and an executive discuss the results achieved, provide feedback and outline plans at the face-to-face meetings. This approach allows focusing the efforts of employees on priority objectives and creates additional prerequisites for implementing the Agency’s strategy. In 2019, 183 employees of the Agency underwent a performance assessment based on the performance of 2018.

Quality management

During 2019, EXIAR JSC along with other companies of the REC Group introduced a separate quality management procedure aimed at increasing the degree of customer loyalty and satisfaction through building a system of continuous improvements and increasing the quality of services and products based on the analysis of client feedback. The REC’s quality management system is based on the NPS (Net Promoter Score), which is a globally highly recognized simple and effective system for measuring the quality of customer experience and managing changes.

NPS surveys allowed expanding the channels for collecting customer feedback, creating a more convenient way for the REC Group’s clients to submit claims, complaints and suggestions. For example, during 2019, the REC’s Quality Control Service received 43 complaints (20% through NPS polls), all of which were resolved within the regulatory period of 7 days (20 days earlier). A significant reduction in the time for handling complaints and improving cross-functional interaction between the departments resulted, among other things, in improving the quality of complaints processing. No repeated complaints were submitted in 2019

93 %
of the REC’s clients were covered by NPS measurements

In 2019, NPS measurements covered more than 93% of REC’s clients, which allowed the company to create a score database and identify score dynamics for all major REC products and services, including credit guarantee and insurance. Client feedback allowed REC to develop the improvement plans, which introduction (in particular, for the product “Participation in foreign business missions”) led to an increase in the clients’ readiness to recommend the product (i.e. its NPS) from 37% to 47%. This evidence the effectiveness of the method for identifying and eliminating bottlenecks and increasing customer loyalty.

81
of target 80 points of the aggregate satisfaction index

In parallel with the introduction of the NPS technique on the design basis conditions, an annual survey of customer satisfaction was conducted in the 4th quarter of 2019 to assess the achievement of the target 80 points, set in corporate performance indicators (corporate KPI). The study involved 247 customers, and the aggregate satisfaction index was 81 points.

Further development of the NPS-based quality management, including the use of NPS to assess the quality of internal business processes and internal services rendered by the REC Group’s units (iNPS), will allow the company to scale up the existing mechanism of continuous improvements in the REC Group offerings, as well as improve customer-based approach as a key value of the Group’s corporate culture.

Aside from internal technologies, in 2020, the REC Group is planning to introduce a specialized subsystem for managing customer interactions within the framework of the One-stop exporter project. The said system will help improve customer service, monitor customer satisfaction and manage the quality of service delivered based on NPS.

This system will allow to automate the assessment of the quality of services received by customers, and, in some cases, introduce a possibility to receive customer feedback at key stages of product or service obtaining (Customer Journey). This will help the early identification of bottlenecks and poor-quality services to quickly eliminate them and improve customer experience.

Anti-corruption efforts

EXIAR JSC and its management adhere to high ethical standards of conducting open and honest business and strive to develop a legal awareness and culture regarding anti-corruption issues among EXIAR employees, intolerance to corrupt behavior. To do this, EXIAR is constantly studying the best corporate governance practices and maintain its business reputation at a high level. EXIAR JSC and its employees do not accept corruption in any forms and manifestations.

During 2019, EXIAR JSC applied the Anti-Corruption Policy, an internal regulatory document binding on all employees. In the first half of 2020, EXIAR JSC is planning to approve an updated package of internal anti-corruption regulatory documents. Moreover, EXIAR JSC has a security hotline with a dedicated email address and telephone number (information is collected around the clock).

To maintain a high level of anti-corruption culture, training and informing of employees are carried out. Briefings are held with newly hired employees of EXIAR JSC. They are familiarized with internal regulatory documents aimed at implementing measures to combat corruption and conflicts of interest.

Standard contract documentation of EXIAR JSC provides for the inclusion of an anti-corruption clause. In accordance with the legislation of the Russian Federation, maximum transparency of information on the procurement of goods, works and services by EXIAR JSC is ensured.

When identifying insufficient anti-corruption measures at EXIAR JSC or changes in the requirements of the applicable legislation of the Russian Federation, the General Director of EXIAR JSC, as well as responsible persons elaborate and implement an action plan for revising and amending the Regulation on Combating Corruption in EXIAR JSC or anti-corruption measures.

Organizational design and performance management

In 2019, the Agency and the REC Group as a whole continued to improve their organizational design.

As part of fulfilling the function of the REC Group as a unified institution for export development, as well as in connection with the new objectives associated with the implementation and coordination of national and federal projects and increasing the scope of export support, the Agency improved its current functional structure, business processes, customer service schemes, adjusted and approved internal policies and procedures, describing the distribution of powers and areas of responsibility of managers. When changing the structure, the company maintained the core principles of a minimum number of control levels and compactness. This structure of the Agency, which is part of the REC Group’s unified structure, meets the need to quickly reallocate resources between priority projects and business goals, involves wider decision-making authority and, finally, a higher level of employee responsibility for both individual performance and Agency’s performance. The lack of formal boundaries between the areas of activities allows improving cross-functional interaction between employees of the main and auxiliary units, including other organizations of the REC Group (EXIMBANK JSC and Russian Export Center JSC).

Personnel policy

Human capital is of prime importance for achieving the strategic goals of EXIAR. Therefore the Agency’s personnel policy is aimed at attracting and retaining competent employees, increasing the involvement and interest of each employee in achieving the organizational goals, developing the potential of employees and creating favorable working conditions.

The personnel policy of the Agency is strictly in line with the Labor Code of the Russian Federation.

1
Number of EXIAR employees as of 1 January 2020
CategoryMenWomen
Total staff, including:76107
Managers1514
Specialists6193
Other employees (operating staff)00
9
EXIAR staff structure in 2019 by age
under the age of 30 | 24,59%31-50 | 71,58%above the age of 50 | 3,83%2019
2
Total number of employees as of 1 January 2020
under the age of 30
menwomentotal
172845
31–50
menwomentotal
5873131
above the age of 50
menwomentotal
167
3
Total number of employees hired in 2019
under the age of 30
menwomentotal
224
31–50
menwomentotal
16824
above the age of 50
menwomentotal
123
4
Total number of employees discharged in 2019
under the age of 30
menwomentotal
8513
31–50
menwomentotal
171734
above the age of 50
menwomentotal
011

Labor protection

Development and improvement of the safety culture are one of the important directions in the implementation of personnel policy. EXIAR JSC provides training on labor protection and assesses the knowledge of the managers and experts in the field of labor protection requirements.

Social assistance to employees

EXIAR’s social policy is aimed at increasing the level of social protection of workers. Aside from mandatory social guarantees established by labor legislation, EXIAR’s employees have the opportunity to take advantage of additional corporate benefits and compensations, such as voluntary medical insurance, additional paid leave, lump-sum payment for annual leave, childbirth and marriage benefits.

Procurements

466
In 2019, EXIAR JSC concluded procurement contracts totaling 580,531,095.50 rubles.

The volume of procurements from small and medium-sized enterprises amounted to 73.27% of the total share of procurements in 2019, 17.72% of procurements were carried out solely among SMEs.

In the first half of 2019, EXIAR approved the updated versions of the internal regulatory documents (1. Procurement Regulations of EXIAR JSC; 2. Regulation on the Tender Committee of EXIAR JSC), establishing principles for planning, preparation, conduct and documentation of procurements, as well as the adoption of procurement-related decisions by the Tender Committee.

According to the updated procurement policies and procedures, the procurement management information system (PMIS) was refined in terms of existing procurement negotiation and approval procedures.

PMIS was integrated with Sberbank-AST electronic trading platform and UIS, and the publication of competitive procurement procedures was automated.

A form for documentation of procurements conducted only among SMEs was developed.

Consequently, according to the results of 2019, the Agency managed to achieve all the established key goals. The priority goals for 2020 include increasing the volume of support for Russian non-resource exports, continuous improving the quality of services, increasing the degree of confidence of entrepreneurs in the state export support system.