4.1 Corporate Governance Overview 

The corporate governancesystem of OGK-2 is aimed at increasing the efficiency of the Company’s operations, strengthening its goodwill and capitalization growth. Corporate governance is an important factor in building trusting relations with all interested parties who are equally influenced by the Company and influence it themselves. In its activities, the Company is guided by, but not limited to, the requirements of the applicable Russian laws, guidelines of the Corporate Governance Code of the Bank of Russia, as well as the best Russian and international practices in the field of corporate governance.

4.1.1 Regulatory documents

The main documents governing the functioning of the corporate governance  system are available on the Company's website. OGK-2 regularly updates internal documents that define the Company's corporate governance policy. Thus, the following documents were updated in the reporting year:

• Articles of Association of OGK-2, PJSC in a new edition
• Policy of OGK-2, PJSC in the field of sustainable development
• Regulations on the information policy of OGK-2, PJSC
• Regulations on the Corporate Secretary of OGK-2, PJSC
• Code of Corporate Ethics of OGK-2, PJSC
• Personal data processing policy of OGK-2, PJSC
• Regulations on the Dividend Policy of OGK-2, PJSC
• Regulations on the Reliability Committee of the Board of Directors of OGK-2, PJSC
• Regulations on the Human Resources and Remuneration Committee of the Board of Directors of OGK-2, PJSC
• Regulations on the Audit Committee of the Board of Directors of OGK-2, PJSC
• Regulations on the Strategy and Investment Committee of the Board of Directors of OGK-2, PJSC
• Regulations on the procedure for determining the amount of remuneration and compensation to the members of the Board of Directors of OGK-2, PJSC
• Regulations on the General Director of OGK-2, PJSC
• Regulations on the General Meeting of Shareholders of OGK-2, PJSC
• Regulations on the Board of Directors of OGK-2, PJSC
• Risk governance and internal control policy of OGK-2, PJSC

To integrate the aspects of sustainable development into the corporate governance system, on September 19, 2022, the Board of Directors approved the Action Plan and Policy of OGK-2, PJSC in the field of sustainable development.

In November 2022, the AK&M rating agency included OGK-2, PJSC in the rating of companies with the highest level of sustainability reports transparency. Thus, according to the results of the published information, the Company entered the top 17 companies, gaining 80.6 points.

Internal documents regulating corporate governance in OGK-2, PJSC are posted on the Company's website

https://www.ogk2.ru/o-kompanii/uchreditelnye-i-vnutrennie-dokumenty/

4.1.2 Governance Bodies 

OGK-2 corporate governance bodies include General Meeting of Shareholders, the Board of Directors and the Sole Executive Body represented by the Governance company. The Board of Directors and the Sole Executive Body of the Company exercise Company governancein strict compliance with the principles of shareholders and investors rights protection, transparency and information openness.

OGK-2 corporate governance structure*

* The Corporate Secretary is accountable to the Board of Directors and is appointed by the governing body (SEB) upon approval by the Board of Directors.

4.1.3 General Meeting of Shareholders 

General Meeting of Shareholders is the supreme governance body of the Company. It provides shareholders with the opportunity to receive information about the Company’s operations, its achievements and plans, to exercise their right to participate in the Company Governance. The General Meeting of Shareholders makes decisions on the most important issues of the Company’s operations falling within the scope of its competence. The Board of Directors and the Sole Executive Body of the Company are accountable to the General Meeting of Shareholders.

[GRI 2-10]

In the reporting period, one general meeting of shareholders was held which covered the issues of profit distribution, election of the Board of Directors, approval of the auditor, new Charter version and other internal documents, and remuneration and compensation payments to the members of the Board of Directors.

4.1.4 Board of Directors 

The Board of Directors controls the Company’s day-to-day operations, makes decisions on significant issues, controls the implementation of decisions of the General Meeting of Shareholders and ensures enforcement of the rights and legal interests of the Company complying with applicable law. The competence and operating procedures of the Board of Directors are governed by internal documents, namely the Board of Directors Charter and Regulation. The Board of Directors is a collegial body, whose members are elected by the General Meeting of Shareholders for a period up to the next Annual General Meeting of Shareholders. By the decision of the General Meeting of Shareholders, the authority of all members of the Board of Directors may be terminated ahead of schedule. Persons elected to the Board of Directors may be re-elected without limitations. Candidates to be elected to the Board of Directors may be nominated by shareholders owning at least 2% of the Company’s voting shares, as well as by the Board of Directors in case of the lack of candidates nominated by shareholders.

Member of the Reliability Committee of the Board of Directors does not include members of the Board of Directors of OGK-2, PJSC.

4.1.5 Sole Executive Body

By the decision of the Annual General Meeting of Shareholders of OGK-2, PJSC dated June 26, 2018, the powers of the Sole Executive Body were transferred to the managing organization.

4.2 Criteria for the independence of Board Directors members

[GRI 2-9]

All independent directors in the Company’s Board of Directors are experienced professionals with an impeccable reputation and independent judgment. OGK-2 annually checks the presence of criteria for the relationship of independent directors with the Company, both for candidates to the Board of Directors and for current members. When assessing, the Company is guided by the recommendations of the Corporate Governance Code of the Bank of Russia.

4.3 Governance bodies diversity

[GRI 2-9]

The Company does not allow discrimination, including in governance bodies, on any grounds: gender, ethnic status, age, race, and any other, not related to the professional competencies of an employee or a member of the governance  body.

The Company pays significant attention to diversity in governance bodies, including adequate representation of women on the Board of Directors and its Committees. In 2022, the composition of the Board of Directors was balanced in terms of number, age, seniority and work experience, as well as in terms of competencies.

These factors allow members of governance  bodies to comprehensively and objectively consider the most important issues of the Company's activities.

4.4 Assessment of the Board of Directors Operations

[GRI 2-18]

In 2022, the external audit of the Board of Directors activities was not carried out and is not scheduled. At the same time, the Company is aware of the importance of applying this practice and does not exclude that the Board of Directors may consider such a possibility, taking into account both internal and external factors.

4.5 Remuneration of members of the Board of Directors and the managing organization

[GRI 2-19 • 2-20]

OGK-2 provides fair remuneration to members of the governance bodies. The amount of remuneration and compensation to the members of the Board of Directors is determined by the Company’s Charter and the Regulation on the Procedure for Determining the Amount of Remuneration and Compensation to the Members of the Board of Directors.*

 Subject to this Regulation, the remuneration to the members of the Board of Directors consists of the basic and optional parts. Basic remuneration is paid for participation in each meeting of the Board of Directors in the amount equivalent to three minimal monthly tariff rates of the first-class worker of the main production unit under normal working conditions established by PJSC Gazprom as of the date of the meeting of the Board of Directors of the Company, subject to indexation established by PJSC Gazprom. Basic remuneration for each meeting paid to the Chairman of the Board of Directors, Deputy Chairman or other person acting as the Chairman of the Board of Directors is increased by 50%.

Optional remuneration is paid to the members of the Board of Directors based on the results of the financial year in case the Company receives net profit. Total amount of the optional remuneration based on the Company operations results may not exceed 5% of the Company net profit. It is also possible to pay optional remuneration by the Company’s shares at their market value.

Information on the amount of remuneration to the members of the Board of Directors, thousand rubles

* Amount of salaries, bonuses and other types of remuneration paid to the members of the Company’s Board of Directors as its employees.

4.6 Prevention of conflicts of interest 

[GRI 2-15]

The Code of Corporate Ethics of OGK-2,PJSC provides for a list of measures to prevent potential or actual conflicts of interest between the members of the Board of Directors and the Company interests. In particular, these relate not only to their own interests, but also to those of their family, friends and other personal relationships, receiving gifts, services, other benefits, using the Company’s assets and resources, and disclosing information. Members of the Board of Directors shall also avoid having labor or civil law relations with competitors, including cases of predominant participation in the authorized capital of a competing company or in the governance bodies of such companies by the Board members themselves or their close relatives or family members.

The Board of Directors Regulation OGK-2,PJSC stipulates the duty for a member of the Board of Directors to avoid any actions that will or may lead to a conflict of interest. If a member of the Board of Directors has a conflict of interest, the latter must inform the Board of Directors about it by sending a notice to the Board of Directors Chairman.