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System of corporate governance

ALROSA’s desire to comply with the highest standards of corporate governance is one of the foundations of the Company’s shareholder value. OJSC ALROSA is guided by the best global practice, the conditions of the Russian market and the specifics of the industry, and works to improve its system of corporate governance in the interests of its shareholders.

OJSC ALROSA’s corporate governance is built on the following principles:

  • the desire to use the Company’s assets as effectively as possible in order to generate profit;
  • rigorous compliance with existing legislation;
  • protecting the interests of shareholders and ensuring that the Company’s managers are accountable to its shareholders;
  • transparency and the timely disclosure of information;
  • a single corporate policy in respect of associated companies, with all transactions conducted on market terms;
  • attention and respect for all parties with an interest in the Company’s activities;
  • the right of shareholders to take part in OJSC ALROSA’s governance by taking decisions on the most important aspects of OJSC ALROSA’s activities at shareholders’ meetings;
  • ensuring all OJSC ALROSA shareholders have the opportunity to access effective protection if their rights are breached;
  • ensuring shareholders have the opportunity to take part in the distribution of OJSC ALROSA’s profits;
  • an equitable attitude to OJSC ALROSA shareholders with the same number of shares of a particular type (category), including minority and foreign shareholders, and the protection of their rights;
  • providing shareholders with reliable and effective means to ensure their ownership of their shares is respected, as well as providing shareholders with the opportunity to dispose of their shares freely and quickly;
  • ensuring that the supervisory board handles the strategic management of OJSC ALROSA’s activities and delivers effective monitoring of the work of the Company’s executive bodies, as well as ensuring that OJSC ALROSA’s supervisory board is accountable to the Company’s shareholders;
  • providing OJSC ALROSA’s executive bodies with the opportunity to manage OJSC ALROSA’s regular activities effectively, sensibly, conscientiously and exclusively in the interests of OJSC ALROSA, as well as ensuring that OJSC ALROSA’s executive bodies are accountable to OJSC ALROSA’s supervisory board and its shareholders;
  • the timely disclosure of complete and reliable information on OJSC ALROSA, including on its financial position, its economic indicators and its ownership and governance structure, in order to ensure that OJSC ALROSA’s shareholders and investors can take well-informed decisions;
  • ensuring that the rights applicable to all interested individuals, including OJSC ALROSA’s employees, under Russian Federation legislation, are observed, and encouraging active cooperation between OJSC ALROSA and interested parties for the purpose of increasing OJSC ALROSA’s assets, increasing its capitalisation and creating new jobs;
  • ensuring that shareholders take no action for the purpose of abusing their own rights and inflicting damage on OJSC ALROSA or other shareholders;
  • effective monitoring of OJSC ALROSA’s financial and business operations, for the purpose of protecting the rights and lawful interests of its shareholders;
  • the rights of employees of OJSC ALROSA as provided for under Russian Federation legislation, the development of partnership relations between OJSC ALROSA and employees in order to address social issues and regulate terms of employment;
  • OJSC ALROSA’s corporate social responsibility.

OJSC ALROSA’s system of corporate governance includes its management bodies, monitoring bodies and a system of relationships between management bodies, monitoring bodies and shareholders, as well as cooperation with other interested parties.

OJSC ALROSA’s system of corporate governance allows the Company to maintain an appropriate and sensible balance between the interests of shareholders and the interests of the management bodies, when decisions are being taken on strategic issues or on everyday financial and business issues. The system also allows OJSC ALROSA to distribute powers and demarcate the general management conducted by shareholders, the Supervisory Board and OJSC ALROSA’s executive bodies.

OJSC ALROSA’s top management body is its Annual General Meeting of shareholders. The meeting chooses a Supervisory Board, which is accountable to the meeting, sets the strategic direction for the Company’s development and monitors its activities in the interests of shareholders. The executive bodies that are accountable to the Supervisory Board are the Executive Board (a collegiate executive body) and the President (an individual executive body). The executive bodies conduct the operational management of the Company, implementing the decisions of Annual General Meetings and the Supervisory Board. Independent auditors and an internal audit commission provide additional monitoring of the Company’s financial and business activities.