General Shareholders Meeting, Board of Directors, President and the Management Committee

General Shareholders Meeting

The General Shareholders Meeting of the Public Joint Stock Company LUKOIL Oil Company is the highest governance body of the Company. It is authorized to make decisions on the most important issues. The annual general meeting is held every year in the form of joint attendance. The general meeting procedure gives each shareholder an equal opportunity to participate in a meaningful way.

Board of Directors

The Board is responsible for the general management of the Company’s business except for the reserved matters of the General Shareholders Meeting. It plays a crucial role in the development of the corporate governance system, determines the business priorities of the Company, and performs strategic, mid-term and annual planning and performance assessment.

The Company is of the opinion that the composition of the Board is optimal in terms of the number of members and is well-balanced in terms of the proportion of independent, executive and non-executive directors, which ensures objectivity and permits continuous improvement of both the Board and the corporate governance system as a whole. The Chairman of the Board is a non-executive director.

BoD composition, %
46% of PJSC LUKOIL BoD members are independent members

Board Committees

The Board Committees include: The Audit Committee, the Human Resources and Compensation Committee and the Strategy and Investment Committee. Since January 2016, most of the members of the Audit Committee and the Human Resources and Compensation Committee are fully compliant with the independence criteria of the Corporate Governance Code.

Corporate Secretary

In 2016, the Company’s Board of Directors approved the Regulations on the Corporate Secretary of PJSC LUKOIL. The Corporate Secretary facilitates efficient interaction between the Company’s shareholders, Board of Directors and executive management; he or she acts as the guarantor of the Company’s management and governance bodies compliance with procedures and principles that ensure the implementation of the legitimate rights and interests of shareholders. In addition to other functions, the Corporate Secretary ensures the proper operation of the Board of Directors and its Committees, plays a crucial role in the resolution of ethical issues, participates in the prevention of corporate conflicts, and oversees the execution of the provisions stipulated in in-house documentation.

Board of Directors

BoD involvement in sustainable development

BoD/сommittee meetings consider the issues related to sustainable development such as HSE performance efficiency, and social policy.

Consideration of sustainable development issues by the Board of Directors G4-50

The Board of Directors held 24 meetings in 2015 and 27 in 2016. At some of the meetings BoD, members addressed issues related to sustainable development, including:

  • Major global economic development trends to 2030.
  • Target benchmarks of the LUKOIL Group 2016-2018 Medium-Term Plan.
  • Comparative data on the Company’s performance indicators in recent years: technological efficiency in the Upstream segment.
  • Introducing innovations in LUKOIL Group entities.
  • Implementation of measures to increase production efficiency at late-stage fields using innovative technologies.
  • Implementation status of the Program of Hard-to-Recover Oil Production.
  • The industrial safety management system at the Company.
  • Internal control, internal audit and risk management systems in LUKOIL Group entities.
  • Performance assessment of the Board of Directors and its committees.
  • The approval of the Compensation and Expense Reimbursement Policy of PJSC LUKOIL BoD Members.

At some of its meetings, the Strategy and Investment Committee addressed issues related to sustainable development, including:

  • Implementation of the Program of Efficient APG Management in LUKOIL Group entities for 2014 – 2016.
  • The assessment procedure for innovative approaches to oil and gas production.
  • Major global economic development trends to 2030 and their impact on the Company’s business.

President and the Management Committee

The President is the single-person Executive Body of the Company; he or she is appointed by the General Shareholders Meeting for a term of five years and acts as Chairman of the Management Committee. The President manages the current operations of the Company and acts within the scope of his or her authority, established by the Charter of PJSC LUKOIL. Vagit Yusufovich Alekperov has been President of PJSC LUKOIL for over 20 years.

The Management Committee is a collective executive body that manages the current operations of the Company. The Management Committee is formed annually by the Board of Directors on the basis of proposals made by the President. The number of 2016 Management Committee members has been set at 15. The meetings of the Management Committee are convened when necessary. The agenda is determined by the President and includes proposals put forward by the members of the Management Committee. The authority of the Management Committee is defined by the PJSC LUKOIL Charter.

PJSC LUKOIL Committees

The Company has established the Risk Committee, a collective body under the President of PJSC LUKOIL, and the Health, Safety and Environment Committee.

The Health, Safety and Environment Committee of PJSC LUKOIL is a collective body, which was set up in 2016. The Committee drafts HSE proposals for the President’s consideration, the Management Committee and the Board of Directors.

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