Corporate Governance Quality
External Assessment of the Corporate Governance Quality
The Russian Institute of Directors (RID) assessed TransContainer’s corporate governance practices and assigned its National Corporate Governance Rating at 7+ (Developed Corporate Governance Practice).
Actually, RID experts reaffirmed TransContainer’s National Corporate Governance Rating at 8 (Best Corporate Governance Practice). However, in line with the current procedure of National Corporate Governance Rating, a prerequisite to receiving a high rating (from 7++ and above) is listing the Company’s shares in the Quotation List Level 1 according to the Moscow Exchange Listing Rules.
With regard to changes in the Company’s shareholding structure and substantial reduction of its free float, the TransContainer’s shares were transferred from the Quotation List Level 1 to Level 3.
Therefore, the Company cannot be assigned with a National Corporate Governance Rating of higher than 7+ (Developed Corporate Governance Practice).
For more details on the Company’s National Corporate Governance Rating see on the site .
According to the assigned National Corporate Governance Rating 7+, the Company complies with the Russian corporate governance laws and the majority of recommendations set out in the Russian Corporate Governance Code. The Company has negligible shareholders’ loss risks associated with the quality of corporate governance.
Internal Assessment of the Corporate Governance Quality in 2018
Starting from 2015, the Company’s Internal Audit Service regularly conducts independent corporate governance quality assessments in accordance with the Procedure for Corporate Governance Quality Self-Assessment in Companies with Government Participation developed by the Federal Agency for State Property Management.
In 2018, the quality of the Company’s corporate governance was assessed at 88%, remaining the same year-on-year. This confirms the high level of compliance with the principles and recommendations of the Corporate Governance Code.
| Components | Number of items | Weight of component in overall assessment, % | Actual score | Maximum score | Compliance level, % |
|---|---|---|---|---|---|
| Shareholder rights | 22 | 14 | 73 | 79 | 92 |
| Board of Directors | 56 | 37 | 166 | 202 | 82 |
| Executive management | 5 | 7 | 36 | 38 | 95 |
| Transparency and information disclosure | 15 | 25 | 120 | 135 | 89 |
| Risk management, internal control, and internal audit | 16 | 11 | 62 | 63 | 98 |
| Corporate social responsibility, business ethics | 6 | 6 | 23 | 31 | 74 |
| Overall assessment | 120 | 100 | 480 | 548 | 88 |
The results of the corporate governance quality assessment will serve to determine the key steps for further improvement in this area.
Improvement of the Corporate Government System
In 2018, the Company took the following steps to improve its corporate governance system, including those based on the recommendations of the Russian Institute of Directors and assessment of TransContainer’s corporate governance practices in 2017:
- approving a revised version of the Regulation on Payment of Remuneration and Compensation to the Members of TransContainer’s Board of Directors that states that the Company shall not pay a fee for participation in individual meetings of the Board or of Board Committees. The remuneration is calculated according to the basic (maximum) amount and depends on the number of meetings attended by the member of the Board of Directors (for more information, see section Remuneration of members of the executive bodies and the managemen in 2018);
- developing a revised version of the Regulation on the Procedure for Addressing Conflict (or Potential Conflict) of Interest at TransContainerApproved by order No. 182 dated 18 July 2018 as part of the Anti-corruption Programme at TransContainer validated by the Company’s Executive Board on 23 December 2016.;
- approving a new version of the Regulations on the Committees of TransContainer in order to optimise the domestic regulatory control in the Company; the updated version combines the sections of the previous Regulations on each Committee having similar content and governing the method of electing members of the Committee, their rights and responsibilities, as well as establishing the Committees’ activities.