Gazprom-AR2014

Corporate Governance
115
Summary of the instances of non-compliance of OAO Gazprom’s corporate governance practice to some
of the key recommendations of the Russian Code of Corporate Governance
Code’s principles and recommendations
OAO Gazprom’s corporate governance practice
To ensure independence of the internal audit function,
its functional and administrative accountability shall be
different. It is recommended that the internal audit function
be functionally accountable to the board of directors, and
administratively accountable directly to the sole executive
body of the company (section 5.2.1. of the Code).
The internal audit function is recommended to be
functionally accountable to the board of directors, meaning
that:
— the board of directors (audit committee) approves
internal audit policy (internal audit regulations) that
sets the internal audit objectives, tasks and functions;
— the board of directors approves (or the audit
committee preliminarily reviews) appointments and
dismissals and sets remuneration for the head of the
internal audit function (section 267 of the Code);
Internal audit tasks should also include the preparation
and submission to the board of directors and executive
bodies of the internal audit performance reports (also
including data on assessment of current status, reliability
and efficiency of the risk management and corporate
governance frameworks) (section 272 of the Code).
In accordance with the Regulation on the Internal Audit
Department at the Administration of OAO Gazprom’s
Management Committee (approved by OAO Gazprom’s
Order No. 455 dated 04 September 2013), the
Department is functionally accountable to the Board
of Directors’ Audit Committee, and administratively
accountable to the Chairman of Management Committee
within the Administration of the Management Committee.
Head of the Department is appointed and dismissed
as proposed by Deputy Chairman of Management
Committee and Head of the Administration
of the Management Committee approved
by the Board of Directors’ Audit Committee.
The Regulation on the Internal Audit Department
at the Administration of OAO Gazprom’s Management
Committee does not specify such tasks (functions)
of the internal audit business unit.
In accordance therewith, head of the Department shall
ensure submission to OAO Gazprom’s Audit Committee
and management of regular (at least once a year) reports
of implementation of the Annual Audit Plan.
Pursuant to Resolution of OAO Gazprom’s Board of Directors No. 2452 dated 27 November
2014, with due account for the benchmarking of the Company’s corporate governance standards
against the Code’s key provisions and given that the management can guarantee implementation
of such initiatives, a draft Action Plan was prepared to introduce the key provisions of the
Russian Code of Corporate Governance into OAO Gazprom’s practice. The draft document was
submitted to the Federal Agency for State Property Management and the Ministry of Energy with
a view to prepare relevant draft guidelines.
OAO Gazprom Annual Report 2014