Board of Directors
Within the bounds of its authority as outlined in the Company's Charter and the laws of the Russian Federation, the Board of Directors offers general strategic guidance to the Company on behalf of and in the interests of all of its shareholders.
Composition of the Board of Directors
Procedure for electing the Board members and removing them from office
In accordance with the Company's Charter, the composition of the Board of Directors is determined by the General Meeting of Shareholders of the Company to consist of at least seven members. Shareholders seek to nominate candidates and form the Board of Directors in such a way that at least half of its members are independent.
The Nomination and Remuneration Committee of the Board of Directors assesses the compliance of the Company's Board members with the independence criteriaThe criteria for qualifying the independence of members of the Board of Directors (Supervisory Board) are defined in Appendix No. 4 to the Listing Rules of the Moscow Exchange (approved by the Supervisory Board of the Moscow Exchange on 26 June 2023, Minutes No. 2)..
Members of the Board of Directors are elected at the Company's annual General Meeting of Shareholders for a term until the next annual General Meeting. The General Meeting of Shareholders is entitled to terminate the powers of the Board of Directors early and elect a new Board of Directors. As of 31 December 2023, the Board of Directors had eight members.
Requirements for nominees to the Board of Directors
In accordance with the Regulations on the Board of Directors of the Company, any individual who meets the following requirements may be a Board member:
- Aged 30 and more
- Minimum three years of management experience
- No criminal record for economic crimes
- No prohibition on holding executive positions
- Membership in no more than five boards of directors of companies (other than INARCTICA PJSC)
Nomination to the Board of Directors is compliant with the legislation of the Russian Federation, the Charter and other internal documents of the Company.
The Company reviews and evaluates nominees to the Board of Directors regardless of their age, gender, race, nationality, ethnicity, marital status, religious belief, language, political position, sexual orientation, pregnancy, maternity, paternity or disability. The Company strives to guarantee that at least one‑third of the Board of Directors is made up of women in order to promote gender diversity on the Board.
Onboarding of newly elected members of the Board of Directors
INARCTICA PJSC takes care to ensure that new members of the Board of Directors quickly adapt to and fully immerse in the Company's operations.
Each newly elected Board member undergoes an onboarding procedure, which includes familiarisation with the work of the Board of Directors and its committees, the Company and its management team, operational, financial and economic activities of the Company, business model, current situation, development prospects, and corporate governance practices in the Company.
For the newly elected members of the Board of Directors, the Company's management organises field trips to visit the fish processing plant's cage complexes and other fish‑farming infrastructure to learn more about the Company's Atlantic salmon and sea trout farming operations.
Additionally, an electronic document management system has been set up so that the Board of Directors' members can review meeting materials and previous meeting minutes, participate in absentee voting on agenda items, ask questions, and leave dissenting opinions. This allows for better coordination and prompt communication between the Company's management and Board of Directors members.
Composition of the Board of Directors
- Chair of the Board of Directors
- Chair of the Sustainable Development Committee
- Member of the Audit CommitteeResigned from the Audit Committee on 29 December 2023
- Independent member of the Board of Directors
- Chair of the Strategy Committee
- Member of the Nomination and Remuneration Committee
- Independent member of the Board of Directors
- Member of the Strategy Committee
- Member of the Audit CommitteeElected to the Audit Committee on 29 December 2023
- Independent member of the Board of Directors
- Chair of the Nomination and Rem uneration Committee
- Member of the Sustainable Development Committee
- Independent member of the Board of Directors
- Member of the Strategy Committee
- Independent member of the Board of Directors
- Member of the Audit Committee
- Independent member of the Board of Directors
- Member of the Sustainable Development Committee
- Independent member of the Board of Directors
- Chair of the Audit Committee
- Member of the Nomination and Remuneration Committee
Diversification of the Board of Directors
The Company endeavours to ensure succession of the Board of Directors. Its members have a skill set that encompasses all areas of importance to the company, including finance, construction, business strategy, sustainable development, investment banking, human capital and corporate governance, as a result of systematic rotation. The total length of service on the Board shall be three years. As such, the Board of Directors has sufficient knowledge of the Company's operating history and can effectively utilise the expertise and experience of the newly joined Directors.
Seven out of eight members of the Company's Board of Directors are independent. The Nomination and Remuneration Committee of the Board of Directors assessed the independence of the Board members. According to the assessment's findings, five Board members fully satisfy the independence criteria, and one Board member was recognised as independent at the meeting of the Company's Board of Directors.
Chair of the Board of Directors
The Chair of the Board of Directors of the Company oversees the effective coordination of the Board' activities and its communication with other governing and control bodies of the Company.
At the first meeting of the newly elected Board, the Board members elect the Chair from among themselves by a majority vote of the total number of Board members. Members of the Board of Directors may re‑elect the Chair of the Board of Directors at any time.
The Chair position cannot be filled by a Board member who also serves as the Company's sole executive body.
The Corporate Governance Code recommends that the Chair of the Company's Board of Directors be an independent Board member.
On 30 June 2023, Ekaterina Chernova was elected as the Chair of the Board of Directors of INARCTICA PJSC (elected as the Chair of the Board of Directors since 2022). Although Ms. Chernova is not an independent member of the Company's Board of Directors, she has considerable experience of serving on the Board and contributes to its efficient operation and the use of best practices in corporate governance. Ekaterina Chernova encourages open debate and the active participation of the Board members during meetings.
Senior Independent Director
The Company did not elect a senior independent director in 2023. The independent members of the Board were notified of the possibility of electing a senior independent director, but in view of the Chair's well‑coordinated work with them, they decided to postpone the election of the senior independent director until the second half of 2024.
Conflict of Interest of Board Members
The Company's Regulations on the Board of Directors include guidelines on how Board members should behave in the case of a conflict of interest. A member of the Board of Directors must refrain from any actions that will or may lead to a conflict between his/her interests and those of the Company (including where the Company is an interested party).
The Board of Directors' responsibility is to inform the Company of the following as quickly as possible:
- Holding (direct and/or indirect) of the Company's securities by them and their spouses, parents, children, full‑blooded and half‑siblings, adoptive parents and adoptees, as well as the acquisition and/or disposal of the Company's securities on any grounds
- Shareholding of other legal entities by them or their spouses, parents, children, full‑blooded and half‑siblings, adoptive parents and adoptees if the percentage of such shareholding is at least 20%
Any member of the Board of Directors who has a conflict of interest during the consideration of a matter must abstain from both participating in the discussion of that matter at the meeting and from voting on it.
In the reporting period, members of the Board of Directors did not enter into any transactions with a related party or other conflict of interest.
Remuneration of Board Members
When electing the members of the Board of Directors, the General Meeting of Shareholders of the Company establishes the annual base remuneration for each Board member. The annual base remuneration includes remuneration for serving on both the Board of Directors and its committees.
The annual base remuneration of the Board members in 2023 was as follows:
- For independent Board members — RUB 3 million, and an additional RUB 1 million sitting on each Board committee they serve on
- For other Board members — RUB 2.5 million
A Board member elected as Chair of the Company's Board of Directors receives an additional remuneration of RUB 2.5 million per year for serving as the Board Chair.
The level of remuneration paid by the Company to members of the Board of Directors is sufficient to attract, motivate and retain individuals with the necessary expertise for the Company.
Remuneration Conditions
An annual base remuneration is paid to a member of the Board of Directors if he/she participated in more than 50% of the meetings of the Board of Directors (in presentia and absentia) held during the next successive pay period. A Board member has the right to opt out of payment for sitting on the Board of Directors.
Compensation and Benefits for Board Members
The Regulations set out the cases when members of the Board of Directors can be reimbursed for their expenses incurred in the exercise of their functions. Board members can be reimbursed for the following expenses:
- Expenses incurred in travelling to and from the venue of the meeting
- Living expenses
- Expenses not related to attendance at meetings but related to the business of the Company
- Expenses associated with obtaining professional advice on matters considered at meetings of the Board of Directors
According to the Regulations, Board members are not eligible for any bonuses.
D&O Insurance of the Board Members
Managing the Company is a complex process involving the possibility that decisions taken by the Company's governing bodies in the reasonable and good‑faith performance of their duties will turn out to be wrong and have negative consequences for the Company.
Directors' and officers' liability insurance (D&O insurance) makes it possible not only to compensate the Company or third parties for losses incurred, but also to attract competent specialists to the Company's Board of Directors, who will have adequate discretion and independence in their decision‑making.
The liability of the Board members and officers is insured by the Company at its own expense. The total aggregate limit of coverage is RUB 1 billion. The insurance agreement is valid from 26 April 2023 to 25 April 2024.
Business Report of the Board of Directors
Work Planning for the Board of Directors and Board committees
Meetings of the Board of Directors and each of Board Committees are held as needed, but at least once every four months, in accordance with the pre‑approved Work Plan for the Board of Directors and Board Committees (hence also referred to as the Board Work Plan).
At its in‑person meetings, the Board of Directors generally reviews the Group's consolidated financial results, the execution of the Group's business plan and strategy, management reports on the execution of Board instructions and the approval of major investment projects.
Voting in absentia is allowed on issues that can be decided without joint attendance of the Board of Directors at the meeting.
Meetings of the Board of Directors
The Board of Directors held 31 meetings in 2023, four of which involved in‑person attendance by Board members and the remaining 28 — absentee balloting.
Attendees of the in‑person meetings heard reports of the Chair of the Company's Board of Directors' Committees, approved the business plan for 2024 and the adjustment of the Company's strategy for 2024–2030, reviewed the management results of the Company's management and consolidated financial results of the INARCTICA Group, the Company's R&D plans, heard progress reports on investment projects, on the fulfilment of the Board of Directors' assignments and on the assessment of the performance of the Board of Directors, Board members and Board Committees.
As in previous years, the convening of general meetings of shareholders (29 items) and the approval of transactions (12items) were the two most frequent topics discussed.
Material Issues Considered by the Board of Directors of the Company
In the reporting year, the Board of Directors reviewed and made decisions or gave recommendations and instructions to the Company's management on such significant issues related to the Company's business continuity as adjusting the Company's long‑term strategy, approving the business plan for 2024, reviewing the Company's management results, and approving investment projects.
The Board evaluated progress reports detailing management's completion of Board assignments at each meeting, and the chairpersons of Board committees presented updates on the activities of their respective committees.
Particularly significant issues were thought out in advance by the Board's dedicated committees for further clarification. Following the consideration of such issues, the committees made recommendations to the Board of Directors on how to vote at meetings.
Board Performance Assessment Report
The Board of Directors makes sure that the effectiveness of the work done by the Board of Directors, its committees and its members is assessed through a formalised procedure in accordance with the requirements of the Corporate Governance Code.
In 2023, it was proposed to engage Independent Registrar Company R.O.S.T. Joint Stock Company to assess the performance of the Board of Directors. This is an independent consultant who has been working with the Company for a long time, is familiar with its operations and is qualified to conduct independent assessments of the board' performance. The assessment involved a questionnaire survey which measured the performance of the Company's Board of Directors, its committees and members. The findings were reviewed at an in‑person meeting on 15 December 2023.
Consultant's comments
The written survey of Board members unanimously found that the Board's performance in 2023 was at a high level. The average score of the Board members' responses was 3.86 out of a possible 4.00.
Among the Board members' greatest strengths were the balanced composition of the current Board of Directors, the work of the committees, and the Board's role in achieving strategic leadership.
However, the respondents noted some room for improvement, primarily in the area of business performance control and the activities of the corporate secretary.
In the consultant’s opinion, the activities of the Board of Directors in 2023 look effective in terms of compliance with legal regulations and the Corporate Governance Code recommended by the Bank of Russia, but its role as a collegial management body in a public joint stock company could be more convincing and
prominent.
Committee members were more reserved in their assessment of their performance, with an average response score of 3.66 out of a possible 4.00. Respondents highlighted potential for improvement in the work of each of the current committees.
The most important recommendations from the consultant's suggested list include:
- To strengthen the role of the Board of Directors in the strategic process, including sustainable development
- To delve deeper into issued discussed during in‑person meetings
- To ensure the independence of the Corporate Secretary function at the system level
- To update the Company’s internal documents in a timely
manner