ENERGY FOR PEOPLE - JSC Gazprom Neft

JSC GAZPROM NEFTANNUAL REPORT2009OBSERVING THECORPORATE CONDUCTCODEThe level of the Company corporategovernance may be evaluated first of allthrough the set of guidelines outlined inthe Corporate Code of Conduct of theFederal Commission for the SecuritiesMarket.The JSC Gazprom Neft in itsoperations follows the policy of ultimateimplementation of the corporate cultureprinciples set forth therein.Operations of the Company are basedon the following principles of corporategovernance:AAConducting activities for the benefitof shareholders and observing rightsof the Company employees and otherinterested partiesAAObservance of applicable legislation;AAOobservance and effective protectionof the rights of Company shareholdersthrough:––Giving shareholders the opportunityto manage their shares at their owndiscretion, quickly and at will;––Giving the Company a reliable andeffective system for recording stockownership rights, which is ensuredby cooperation of the Companywith an independent registrar;––Establishing a maximally clearand transparent mechanism fordetermining the dividend amountand ensuring the dividend paymentprocedure that allows shareholdersto best exercise their right toreceive dividends;––Having effective control over thefinancial and economic activitiesof the Company by both theinternal bodies of the Company(Board of Directors, ManagementBoard, Audit Commission, AuditCommittee) and the externalAuditor;––Ensuring equal rights andopportunities for all shareholdersand other interested parties toreceive information;AAEnsuring equal treatment of Companyshareholders holding the same class(type) of shares;AAProviding Company shareholders withthe real opportunity to exercise theirrights associated with participation inthe Company’s operations:––Fixing the responsibility in theCompany Articles of Associationto notify shareholders about theAnnual General Shareholders’Meeting not later than 30 daysprior to its date, unless a longernotification period is stipulated bylaw;––Providing the opportunity tothe shareholders to read theinformation (materials) subject todisclosure during preparation forthe General Shareholders’ Meetingvia the Internet (the informationshould be published online inthe bilingual format (Russian andEnglish) to meet the timeframestipulated by the effective legislationof the Russian Federation);––Ensuring the most simple andunobstructed registration procedurefor the participants of the GeneralShareholders’ Meeting ;––Ensuring the rules of order of theGeneral Shareholders’ Meeting thatguarantee equal opportunities for allshareholders present at the meetingto express their opinions and to askany agenda-based questions;––Ensuring availability of theManagement Board representativesat the General Shareholders’Meeting which gives the opportunityto the shareholders to ask theirquestions;AAmaintaining high standards of socialresponsibility;AACreating an efficient system of theCompany governing bodies basedon:––Clearly stated competence of thegoverning bodies set out in theCompany Articles of Association;––Absence of persons employed bycompetitive entities in the Companygoverning bodies;––Responsibility of governing bodymembers set forth by the Companybylaws to refrain from actions thatmay cause a conflict of interestsas well as to inform the Companyabout any situations (transactions)that may potentially cause a conflictof interests––Absence of persons in theCompany governing bodies thathave been found guilty of economiccrimes or crimes against thestate authorities, or state serviceinterests or local governanceinterests or those that wereimposed administrative penaltiesfor wrongdoing in the spheres ofentrepreneurship or finance or taxand duties or stock market;––Highly professional executives inthe governing bodies;––Setting forth the procedure forholding Board of Directors meetingsin the bylaws;––Assigning strategic managementof the Company’s operations to theBoard of Directors and effectivecontrol of the Board of Directorsover the activities of the Company’sexecutive bodies;––Determining the value threshold oftransactions subject to approval bythe Company Board of Directorsin the Company Articles ofAssociation;––Accountability of the Boardmembers to General ShareholdersMeeting;––Creating Board of Directorscommittees: Audit Committee andHR and Remuneration Committee ;––Existing bylaws approved by theBoard of Directors that describeestablishing and operatingprocedures for the Board ofDirectors committees;––Absence of Company executivesin the HR and RemunerationCommittee;––A special executive in the Company(Secretary of the Board ofDirectors) that ensures observanceby the Company governing bodiesand executives of procedurerequirements that guaranteeshareholders’ rights and their lawfulinterests;––Establishing the procedure forappointment of the Board ofDirectors Secretary and outliningtheir job description in the bylaws;––Collegial executive body(Management Board);––Accountability of the executivemanagement to the Boardof Directors and GeneralShareholders’ Meeting;––Setting forth in the Companybylaws the responsibility ofexecutive bodies to report regularlyto the Board of Directors aboutimplementation of Companyprograms and plans, GeneralShareholders Meeting’s and Boardof Directors’ Decisions, and aboutother results of the Companyoperations, including assetmanagement issues;135