Annual report 2011 - VTB

VTB Annual Report 20114. Management report68Once the timeframe for incorporation of the Basel IIrecommendations into Russian banking legislationbecomes clear, VTB Bank intends to formulate astrategy for the transition of its risk managementsystems to the new standards and the introductionof the necessary procedural documents, withsimultaneous preparation of a corresponding budgetand close coordination of initiatives by the Bank’ssubdivisions to carry this project forward.Key priorities in 2012In line with the current VTB Group DevelopmentStrategy for 2010-2013, and within the frameworkof the new Group management model, the riskmanagement system will be improved in 2012 byimplementing the following measures:Further unification of the risk management methodsand approaches applied by VTB Group companies;Improvement of the existing risk control proceduresat Group level, based on best practices – inparticular, creating new committees under the GroupManagement Committee and refining the functions ofexisting ones in the sphere of managing the Group’scredit and financial risks;Improvement and implementation of the Group’s“risk appetite” and “economic capital” models;5. Corporate governance5.1. Overview of the corporategovernance systemVTB Bank’s corporate governance system is foundedon the principle of unconditional compliance withthe requirements imposed by Russian legislationand the Bank of Russia, and the recommendationsof the Russian Federal Financial Markets Service. Italso takes into account international best practices,including the globally recognised principles ofcorporate governance developed by the Organisationfor Economic Co-operation and Development (OECD).VTB Bank guarantees that all its shareholders areExternal Auditorapprovestreated equally, and gives them the opportunity toparticipate in the management of the Bank via theGeneral Shareholders Meeting and to exercise theirright to receive dividends and information about theBank’s operations.The General Shareholders Meeting is VTB Bank’shighest governing body. The Bank’s SupervisoryCouncil, elected by the shareholders and accountableto them, provides strategic management andoversight of the work of the executive bodies, namelythe President and Chairman of the ManagementBoard and the Management Board. The executivebodies are responsible for the day-VTB Bank corporate governance structureGeneral Shareholders MeetingelectsreportsStatutory AuditCommission69Completion of the consolidation of the riskmanagement system within the Group’s investmentbusiness into the Group-wide risk managementframework, which is an important element of theactive development of this type of business;Development of risk-oriented approaches to businessplanning within VTB Group.Strategy andCorporateGovernanceCommitteeappointspreparesrecommendationsand reportsappointselectsreportsSupervisory Councilappointsreportselectspreparesrecommendationsand reportsreportsAudit CommitteereportsStaff andRemunerationCommitteepreparesrecommendationsand reportsPresident and ChairmanManagement BoardInternal ControlDepartment