Annual report 2011 - VTB

VTB Annual Report 20115. Corporate governance98coordination is a supplementary governancemechanism that enables cooperation andconsultation between various parts of the Group inthe early stages of the decision-making process.At a Group level, the main coordination and advisorybody is the VTB Group Management Committee(VTB GMC), which analyses the developmentstrategies of various business areas, the businessplans for the Group and its subsidiaries, examinesreports on their implementation, assesses liquidityand risks, oversees the implementation of priorityprojects, and approves the standards, approachesand principles of the Group’s operations.As of 31 December 2011, the VTB Group ManagementCommittee consisted of the following members:Andrey L. Kostin – Chairman of the GMC, Presidentand Chairman of VTB Bank Management Board;Yuri A. Soloviev – member of the GMC, First DeputyChairman of VTB Bank Management Board;Vasily N. Titov – member of the GMC, First DeputyChairman of VTB Bank Management Board;Herbert Moos – member of the GMC, DeputyChairman of VTB Bank Management Board;Andrei S. Puchkov – member of the GMC, DeputyChairman of VTB Bank Management Board;Victoria G. Vanurina – member of the GMC,member of VTB Bank Management Board;Olga K. Dergunova – member of the GMC,member of VTB Bank Management Board;Valery V. Lukyanenko – member of the GMC,member of VTB Bank Management Board;Erkin R. Norov – member of the GMC,member of VTB Bank Management Board;Ekaterina V. Petelina – member of the GMC,member of VTB Bank Management Board;Denis A. Bortnikov – member of the GMC,member of VTB Bank Management Board;Riccardo Orcel – member of the GMC, Head of theClient Coverage Department, Senior Vice-President ofVTB Bank;David Brawn – member of the GMC, Advisor tothe Deputy Chairman, Senior Vice-President of theFinance Department at VTB Bank;Mikhail M. Zadornov – member of the GMC,President and Chairman of VTB24 Management Board;Mikhail V. Kuzovlev – member of the GMC,President of the Bank of Moscow;Yuri V. Novozhilov – member of the GMC,President of OJSC TransCreditBank;Dmitry Y. Olyunin – member of the GMC,First Vice-President of OJSC TransCreditBank;Alexei A. Yakovitsky – member of the GMC,Chief Executive Officer of CJSC VTB Capital Holding;Vadim V. Pushkarev – member of the GMC,Chairman of VTB Ukraine Management Board;Dmitry V. Rudenko – member of the GMC, First DeputyPresident and Chairman of VTB24 ManagementBoard;Alexander G. Yastrib – member of the GMC,First Deputy Chairman of the Bank of MoscowManagement Board.GMC meetings are held regularly on the basis ofquarterly work plans. In 2011, the GMC of VTB held20 meetings.In order to provide a platform for discussionand analysis of VTB Group’s performance, theManagement Committee has set up 13 CoordinationCommissions within the Bank’s main businesslines (corporate and investment business, businesswith financial institutions, risks, planning andreporting, assets and liabilities, internal controland audit, internal control for the prevention ofmoney laundering and the financing of terrorism,branding and marketing/external communications,personnel, property management, IT and security).The Commissions are managed by the heads ofthe relevant divisions of the Bank. Members of theCommissions are experts drawn from all of the banksand companies in the Group. The Commissions areresponsible for identifying best practices and findingways to implement them, prior to their final approvalby the Management Committee.In addition to the Commissions, the Group CreditCommittee, which oversees the management andcontrol of credit risk, also functions as an element ofthe Management Committee.In September 2011, the Group’s ManagementCommittee approved a decision to reform the Group’smanagement system. The main objective of thisreform is to improve coordination and cooperationbetween the Group’s companies in various keybusiness and support functions.Three key directions of reform were established toachieve this:1. To create a major business line known as Corporateand Investment Banking, which is responsible for thefinancial results of VTB Group’s corporate bankingbusiness in all the geographical areas in which it ispresent;2. To create a major business line known as RetailBanking, which is responsible for the financial resultsof the retail banking services provided byVTB Group to individuals and small businesses in allthe geographical areas in which it is present;3. To increase the centralisation of responsibility andthe integration of management of the key functionsof support and control, primarily the management ofrisks, finance, IT and operational activities.Developments in the management system willnot lead to any changes in the Bank’s strategyand policies. On the contrary, this developmentmerely provides a different approach to theirimplementation. The new system will enable theBank to reduce risks, develop a major global modelfor corporate banking, closely coordinate the work ofevery business line in all geographic locations, andto increase profitability through synergies betweenbusiness lines and best practices. It will also enablethe Group to cut costs by sharing infrastructureand resources more extensively among VTB’ssubsidiaries. Furthermore, the new system will bea platform for the effective integration of assetsacquired by VTB.VTB Group’s governance system is designed to complyfully with the corporate and antimonopoly legislationof the countries in which the Group’s companiesoperate, and undergoes continual review andimprovement in order that it remains in compliance.In particular, the regulations of the VTB GroupManagement Committee ensure that no decisions canbe made that would limit competition in the marketsin which VTB Group companies operate or wouldviolate legislative norms or the statutory documentsof those companies. Also, in accordance with Civillaw requirements, VTB Group’s governance system isbased on the principle of the independence of each ofthe legal entities within the Group.99