Corporate governance system
Corporate governance of PJSC Posseti South is a system of relations between the Company’s executive bodies, its Board of Directors, shareholders, S&As and other stakeholders.
Corporate governance within the Company complies with the legislation of the Russian Federation, Company’s Articles of Associations, bylaws for governing and control bodies of the Company, Company’s Regulations on Protection of Insider Information, Company’s Regulation on the Information Policy, and other internal documents.
Internal documents regulating the Company’s corporate governance are published on the Company’s website.
Principles of corporate governance
Equal and fair treatment of all shareholders | The Company commits to treating all shareholders fairly and equally, defending their rights, and giving them the chance to get strong protection in the case that such rights are violated |
Responsibility and accountability of the Board of Directors to the Company’s shareholders | In accordance with the law of the Russian Federation, the Corporate Governance Code of the Bank of Russia, the Board of Directors of the Company is accountable to the General Meeting of Shareholders of the Company |
Transparency and openness of information about the Company | The Company ensures timely disclosure of complete and reliable information on all material facts related to its activities, including its financial position, performance (including social and environmental), ownership and management structure of the Company, as well as free access to such information to shareholders and other stakeholders through the implementation of the Information Policy approved by the Board of Directors |
Effective risk management and internal control system | The Company has a risk management system designed to ensure reasonable confidence in achieving the goals set for the Company, defined by the development strategy of the power grid complex of the Russian Federation, development policy documents and the Articles of Association of the Company, as well as to ensure the growth of the Company’s value, while maintaining a balance of interests of all stakeholders. The Company regularly identifies, assesses and monitors risks, implements measures to lessen their probability and any potential consequences they may have, and informs shareholders and other stakeholders thereof. The Company acts in good faith and adheres to ethical values. The Board of Directors of the Company is independent of management and oversees the development and functioning of the internal control system. The Company assigns accountability to its governing bodies and personnel for their responsibilities in the area of internal control in the pursuit of objectives set |
Responsibility of the Company to shareholders, consumers, employees, partners, society and the state | The Company recognises and ensures the rights of shareholders and all interested parties as stipulated by the laws of the Russian Federation |
Sustainable development and implementation of strategic programmes and projects | The Company achieves its strategic goals in line with the principles of sustainable development, while observing the rights and interests of both the Company’s shareholders and other stakeholders. The key objectives of PJSC Rosseti South in the field of sustainable development are:
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Improvement of corporate governance practices
In the reporting year, the Company focused on improving its corporate governance practices and maintaining dialogue with key stakeholders.
2025 results:
- Ensuring that the corporate governance rating is at a high level
- Updating of the Company’s Articles of Association, internal documents related to corporate governance in general, as well as documents regulating the organisation of activities of governance bodies
- Making sure that the governing bodies’ resolutions are fulfilled properly
- Conducting an external assessment of the activities of the Board of Directors and committees of the Board of Directors of the Company
- Disclosing non-financial statements in the form of an annual (integrated) report for 2024: the annual report passed the public assurance procedure in the Council of the Russian Union of Industrialists and Entrepreneurs on non-financial reporting, indices and ratings of sustainable development
In 2025, 185 corporate events were held, including:
- 2 General Meetings of Shareholders of the Company
- 52 in-person meetings / absentee ballots for decision-making by the Board of Directors of the Company
- 83 in-person meetings / absentee ballots for decision-making by the committees of the Board of Directors of the Company
- 48 absentee ballots for decision-making by the Company’s Management Board
The governing bodies of the Company made all the decisions that were required and sufficient to guarantee the Company’s present and strategic operations in a timely and complete manner. The decision-making process involved active participation from all members of the Company’s governing bodies.
Compliance with the principles and recommendations of the Corporate Governance Code of the Bank of Russia
The Company alignsIt was determined by the decision of the Board of Directors of PJSC Rosseti South dated 31 October 2017 (Minutes No. 248/2017 dated 2 November 2017). its operations with the recommendations of the Corporate Governance Code of the Bank of Russia.
The report on compliance with the principles and recommendations of the Corporate Governance Code of the Bank of Russia is reviewed annually by the Board of Directors of the Company as part of the process of preliminary approval of the Annual Report of the Company.
The Board of Directors certifies that all report data contain full and reliable information on the Company’s compliance with the principles and recommendations of the Corporate Governance Code of the Bank of Russia for 2025.
Changes in the Company’s compliance with the Bank of Russia’s Corporate Governance Code in 2023–2025
- The rate of full and partial compliance with the recommendations of the Corporate Governance Code increased from 75% to 97.46% in the period from 2014 to 2025.
- The rate of full compliance with the Code’s recommendations increased from 50% to 83.54%.
The policy pursued by the Company in the context of corporate governance contributes to building relations of trust and provides a real opportunity for the Company’s shareholders to exercise their rights.
One of the ongoing processes in developing the Company’s corporate governance structure is to implement as many best practices from abroad and Russia as possible.
Plans to improve corporate governance
- To adopt in-house Corporate Governance Code
- To maintain the corporate governance rating at the level of well-developed corporate governance practice
- To implement action plans based on the results of the Company’s corporate governance assessment
In 2026, the Company will continue to analyse best corporate governance practices and assess the feasibility of their implementation.
Assessment of the corporate governance level
Self-assessment
The Company’s internal audit department annually assesses the corporate governance of PJSC Rosseti South. Compliance of corporate governance with the principles and recommendations set out in the Corporate Governance Code and (or) the Listing Rules, and (or) best corporate practices is a measure used to assess corporate governance.
In the reporting year, the Company’s internal audit function conducted an assessment of corporate governance at the end of the 2024/2025 corporate year against its compliance with the laws of the Russian Federation, principles and recommendations of the Corporate Governance Code of the Bank of Russia, Listing Regulations of the Moscow Exchange and the best corporate practices. The assessment was carried out in accordance with the Methodology for Assessing Corporate Governance of PJSC Rosseti South, approved by the Company’s Order No. 416 dated 16 July 2024.
Following the results, the internal audit recognised the Company’s corporate governance as corresponding to the developed practice level; it also noted that the potential for improvement on a number of issues depends on external factors that the Company cannot have influence on.
Component | Maximum score for 2024/2025 | For the 2024/2025 corporate year | |
|---|---|---|---|
Score of the Company | Compliance with the applicable criteria, % | ||
Shareholders’ rights | 61 | 59 | 97 |
Board of Directors | 127.5 | 97.5 | 78 |
Executive management | 34 | 20 | 59 |
Transparency and disclosures | 128 | 114 | 89 |
Risk management, internal control and internal audit | 61 | 59 | 97 |
Corporate social responsibility, business ethics and compliance | 31 | 31 | 100 |
Total score | 448.5 | 388 | 87 |
Independent assessment
The Company engages an external corporate governance consultant as an independent expert on an ongoing basis, which enables tracking the effectiveness of ongoing changes and consistently implementing management system improvement tools, as well as elements of best practices.
In the reporting year, the Russian Institute of Directors conducted an annual monitoring of the Company’s corporate governance practices and confirmed the Company’s National Corporate Governance Rating at level 7 ‘Well-Developed Corporate Governance Practice’:
03.02.2025 – for 2024;10.02.2026 – for 2025.