PhosAgro’s corporate governance system encompasses management and control processes that help to ensure the overall efficiency of the Company’s operations, its risk management systems and its interactions with key stakeholders. PhosAgro believesthat the implementation of an effective system of corporate governance strengthens the company’s reputation and reduces the cost of capital. Taken together, these factors will benefit the Company’s shareholders in the long term.
Corporate governance at PhosAgro complies with the requirements of Russian legislation and is based on the generally accepted standards and practices stipulated by the Russian Code of Corporate Conduct and the UK Corporate Governance Code. The Company’s corporate governance principles, structure, procedures and practices are set out in its Charter and Corporate Governance Code.
PhosAgro’s corporate governance system includes the General Shareholders’ Meeting, the Board of Directors, the Individual Executive Body (CEO) and the Collegial Executive Body (Management Board). The General Shareholders’ Meeting, the highest governing body, is where shareholders exercise their right to control the Company. The Board of Directors is responsible for general leadership, strategy, and oversight of executive management, with the exception of those issues that are the sole remit of the General Shareholders’ Meeting in accordance with current legislation and the Company Charter. The CEO and Management Board are responsible for day-to-day management of the Company and for implementing the strategy approved by the Board of Directors.
PJSC PhosAgro shareholders elect members of the Board of Directors and the Audit Commission and approve the Auditor. The professional Board of Directors is responsible for strategic management of the company’s operations and controls the work of the executive body in the interests of shareholders. The company aims to ensure that the majority of members of the board of directors are independent to guarantee that unbiased resolutions are adopted that balance the interests of various shareholder groups. (More information on independence requirements can be found in the Corporate Governance Code).
In selecting members of the Board of Directors, primary importance is given to the possession of the necessary balance of skills, experience, independence and knowledge. Members of the Board of Directors who are familiar with the company’s operations play an important role in ensuring well-qualified governance, which is why the PJSC PhosAgro Corporate Governance Code does not limit the re-election of members. However, membership of the Board of Directors for a period of more than six consecutive years is considered to be a reason to look into possibilities for rotation.
Members of the company’s Board of Directors are compensated for their service. The amount is established by decision at the General Shareholders’ Meeting and is attuned so as to ensure the possibility of attracting highly skilled specialists and to motivate them to serve efficiently and with integrity.
Having a professional Board of Directors is an important element for the efficiency of corporate governance. Effective cooperation between the independent Board of Directors and the company’s executive body, the Chief Executive Officer, as well as a clear definition of where their responsibilities lie, is a key factor in PhosAgro’s corporate governance practice.
PhosAgro has in place a well-defined policy on insider information, which acts as one of the most important conditions in ensuring that the rights and interests of our shareholders and investors are respected. Our principles are outlined in the Regulation on Insider Information.
An insider is a person who has the right to access insider information as part of their job description, or in line with an internal company document, a contract with the company or a law or regulatory requirement. The Company has established an internal structure that reports to the Board of Directors, the responsibility of which is to ensure compliance with current insider information laws and regulations. The company controls insider activity by placing restrictions on the use and circulation of insider information. For example, insiders may not pass on information available to them to other individuals except in cases expressly provided for in current legislation and the company’s documents. Those with access to insider information are advised to refrain from transactions involving the company’s shares during the time they have access to insider information. They shall notify the Corporate Secretary’s office of transactions with shares.
The Corporate Secretary’s office maintains insider lists and notifies insiders of their inclusion on these lists. The office gathers data on possible or actual disclosure of insider information and brings them to the knowledge of the company’s Board of Directors. In the event that the company suffers a loss due to a breach of the insider information policy, the insider must compensate for the damage.
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