Management of subsidiaries of MTS Group
Corporate governance at the MTS Group is aimed at strict observance of the rights and legitimate interests of all MTS shareholders, ensuring the sustainable functioning and development of business, the MTS ecosystem, and achievement of the strategic goals of the MTS Group.
The corporate governance system is aimed at ensuring the effective use of shareholders’ investments and their protection, assists in development of the digital ecosystem of MTS products and implementation of strategic goals throughout the Group of Companies, taking into account the interconnected relationships and succession in decisions made by the MTS governing bodies.
MTS has the following participants in the system for corporate governance over subsidiaries:
- Shareholders — election of the Board of Directors
- Board of Directors — strategy, appointment and control of managers, protection of the rights and interests of shareholders
- President — General management of the company
- Management Board — management of ecosystem functions and areas
- Venture Investment
- Financial Services
- Cloud and Digital Solutions
- Artificial Intelligence
In the process of managing SC, MTS adheres to the following principles:
- SC management is carried out through MTS representatives elected to the SC management bodies;
- control over subsidiaries is carried out through MTS representatives elected to the control bodies of subsidiaries;
- uniform corporate governance standards, including unified internal decision-making procedures and standard corporate documents;
- uniform standards and procedures in the field of anti-corruption compliance.
Corporate governance approaches depend on the ownership interest in the Company.
In companies with a MTS share of less than 50%, the provisions of the Charter or corporate agreement protect the property rights and interests of MTS.
The share of MTS ownership in companies of more than 50% implies the ability to form the composition of the Board of Directors and determine strategic and priority decisions of the Boards of Directors of subsidiaries.
When forming the Boards of Directors in subsidiaries, the following is taken into account:
- the importance of the company for the overall strategy of the MTS Group;
- the current and target scale of the company’s business;
- industry / business sector of the company;
- requirements of laws, regulators and exchanges;
- balance between the personal and quantitative composition of the Board of Directors.
- When selecting candidates for members of the Board of Directors of subsidiaries, the following criteria are taken into account:
- personal skills, qualifications, experience;
- knowledge of the industry and business sector of the DO;
- general employment, including on other Boards of Directors;
- exclusion of a possible conflict of interest;
- consent of the candidate, including agreement to comply with anti-corruption compliance requirements;
- positive conclusion based on the results of the audit.
Candidates for nomination to the Board of Directors of subsidiaries are approved by the President of MTS or the responsible vice-presidents of MTS. The Remuneration and Nomination Committee of the MTS Board of Directors approves the list of subsidiaries, according to which it considers information on the formation, termination and change of the composition of the Boards of Directors.
The MTS Board of Directors is the center for making strategic decisions, which are transmitted to SCs through the representatives of MTS in the governing bodies.
Impact of the MTS Board of Directors on the main business processes:
- strategy and investment;
- business plan and budget;
- functional strategies;
- system of rewards;
- management control, audit, compliance;
- control of assets.
Representatives of MTS participate in the work of the management bodies of subsidiaries, guided by the provisions of the internal documents of MTS.
In order to effectively perform their duties, representatives:
- receive and analyze information about the company’s activities;
- initiate issues on the agenda of the governing bodies;
- take an active part in meetings of management bodies;
- vote taking into account the position of the MTS governing bodies;
- control the implementation of the decisions taken;
- participate in fostering a culture of ethical business conduct and compliance with applicable anti-corruption laws;
- inform MTS about the occurrence of a conflict of interest and possible violations of the requirements of the applicable anti-corruption legislation by the company.