Board of Directors

Composition of the Board of Directors

The Board of Directors plays a crucial role in designing and developing the corporate governance system, ensures the protection and exercise of shareholder rights and supervises executive bodies. Guided by the principles of mutual respect and humanism, the Board of Directors sets the fundamental principles of business conduct and is responsible for nurturing Nornickel’s business and social culture.

The Board’s authority and formation process, as well as the procedure for convening and holding Board meetings are determined by the Articles of Association and Regulations on the Board of Directors.

According to Nornickel’s Articles of Association, the Board of Directors has 13 members. The current size of the Board of Directors is best aligned with Nornickel’s goals and objectives, and its appropriate independence mix ensures that decision making considers the interests of all stakeholders and enhances the quality of managerial decisions. The current Board of Directors comprises six independent directors, which enables highly professional, independent judgements on matters on the agenda.

Following the Annual General Meeting of Shareholders held on 19 May 2021, Nikolay Abramov stepped down from the Board of Directors, and Stanislav Luchitsky was elected to the Board.

As at 31 December 2021, the Board of Directors had 13 members, includingIn March 2022, independent non-executive directors Gareth Penny, Roger Munnings and Robert Edwards stepped down from the Board of Directors.:

• six independent directorsIn March 2022, independent non-executive directors Gareth Penny, Roger Munnings and Robert Edwards stepped down from the Board of Directors.: Gareth Peter Penny, Sergey Bratukhin, Sergey Volk, Roger Munnings, Evgeny Shvarts, and Robert Edwards
• six non-executive directors: Sergey Barbashev, Sergey Batekhin, Alexey Bashkirov, Stanislav Luchitsky, Maxim Poletaev, and Vyacheslav Solomin
• one executive director: Marianna Zakharova.

Chairman
of the Board of Directors

The Chairman of Nornickel’s Board of Directors leads the Board of Directors, convenes and chairs its meetings, ensures constructive collaboration between the Board members and corporate management.

Since March 2013, the Board of Directors has been chaired by Gareth Peter Penny, who in line with global best practice is an independent director. In June 2021, the Sustainable Development and Climate Change Committee was established under his leadership to review a wide range of matters relating to the Company’s sustainable development, including the climate agenda. Gareth Penny promotes open discussion at meetings and encourages active involvement of all Board members. Gareth Penny’s external non-executive directorships enable Nornickel’s Board of Directors to better keep abreast of global best practice in corporate governance.

Independent
directors

In line with corporate governance best practice, Nornickel’s Board of Directors assesses Board nominees and new members against the independence criteria set out in the Company’s Articles of Association and the Listing Rules of PJSC Moscow Exchange (the “independence criteria”).

Thus, during 2021, 6 out of the 13 Directors, or 46.2%, were independent.

Board of Directors’
performance

In 2021, Nornickel’s Board of Directors held 43 meetings, including 10 meetings in person, and reviewed 102 matters.

At its meetings, the Board focused on environmental matters, analysis of Nornickel’s environmental protection strategy, including the Sulphur Project, assessment of the infrastructure, and the impact of climate factors, such as permafrost, on the Company’s operations. Particular attention was paid to stakeholder engagement on ESG matters and review of the Company’s internal control and risk management, which are critical for the Company’s sustainability.

Performance
evaluation of the Board of Directors

As recommended by the Corporate Governance Code, the Corporate Governance, Nomination and Remuneration Committee of the Board of Directors initiated the development of the Performance Evaluation Policy for the Board of Directors, engaging independent consultants.

The Corporate Governance Code recommends that an external organisation (advisor) be engaged regularly, at least once in three years, to conduct an independent evaluation of the Board of Directors’ performance. In line with corporate governance best practice and the Company’s Performance Evaluation Policy for the Board of Directors, the performance evaluation of the Company’s Board of Directors for 2021 was carried out by an external organisation, Limited Liability Company Independent Directors Association Academy (IDA Academy).

The methodology and approaches used in the external performance evaluation of the Board of Directors are driven by international best practice and the Company’s needs. Detailed questionnaires were sent out to participants to evaluate the performance of the Board and its Committees, along with the Directors’ individual contributions. The results were supplemented by comments and feedback from certain committee heads obtained via one-on-one interviews. Following these activities, IDA Academy prepared a preliminary evaluation report submitted to the members of the Corporate Governance, Nomination and Remuneration Committee and the Corporate Secretary.

The external evaluation confirmed that:

• In 2021 composition of the Board of Directors was well-balanced in terms of directors’ qualifications, experience and business skills The qualitative composition of the Board of Directors meets the Company’s needs and shareholder interests
• The composition of the Board committees is aligned with the Company’s goals and objectives; there is no need to set up additional Board committees
• The Chairman of the Board of Directors organises the Board of Directors’ activities in the most efficient way, ensures its communication with other bodies of the Company and facilitates the best performance of assigned duties

However, given the new operating environment the Company has had to navigate in 2022, including the resignation of foreign independent directors and Board Chairman, the performance evaluation resulted in recommendations to keep the same number of independent directors by selecting and electing candidates with the background and skills matching the challenges of operating in a new environment. The Board of Directors intends to focus on: rethinking the strategy and adapting it to the new environment; consolidating the progress already made on sustainability and occupational safety; and returning to formal and informal Board and management meetings in person as COVID-19 restrictions were lifted.

The performance evaluation results helped identify the Board of Directors’ focus areas for 2022. In line with international best practice, the Company will continue to run self-assessments of the Board of Directors on an annual basis and external independent evaluations once in three years to ensure the continuous development and improvement of PJSC MMC NORILSK NICKEL’s corporate governance practices.

The Board of Directors’ activities in 2021 took into account the recommendations issued by the Corporate Governance, Nomination and Remuneration Committee following the review of the Board of Directors’ 2020 Performance Report.

At its meeting on 22 April 2022, the Board of Directors reviewed the Work Quality Assessment Report of the Board of Directors in 2021 and the recommendations of the Corporate Governance, Nomination and Remuneration Committee, and acknowledged that the Board of Directors and its committees, as well as the Board Chairman and the Corporate Secretary discharged their duties effectively. During the year, the Board of Directors maintained its focus on major investments. The Strategy Committee reviewed the draft production and long-term investment programmes, progress reports on the Company’s major investment projects, implementation status of the IT programme, implementation status of the development concept for the Company’s design services, repair and construction services policies, implementation status on the exploration strategy, and progress report on the sales strategy.

Following the recommendations of the Corporate Governance, Nomination and Remuneration Committee to continue the practice of regularly updating Board members about the markets in which the Company operates, the Marketing Committee maintained good communications with the Board of Directors by regularly informing them about the Company’s sales activities. The Marketing Committee and the Board’s Strategy Committee regularly reviewed matters relating to market overviews, the implementation status of the sales strategy and sales of Nornickel metals.

Amid the pandemic restrictions, the improvement of the Supervisory Function indicator was driven by providing updates on business priorities and the Company’s strategy to the Board of Directors and senior management for in-depth analysis as well as through meetings and conference calls.

To reflect stakeholders’ opinions and interests in the decision-making process, the Corporate Governance, Nomination and Remuneration Committee continued interacting with the Company’s management during 2021 through meetings and conference calls. During 2021, the Committee gave a number of recommendations to improve the Company’s KPI system and recommended that the Board of Directors approve a series of internal documents establishing basic principles, obligations and rules for stakeholder engagement, including on ESG matters.

Biographical details of Board members as pf 31 December 2021

For more details on biographies of the Board members, please see the Company’s website, and for the biographies of the members who stepped down after the Annual General Meeting of Shareholders, please see the 2020 Annual Report.

In the reporting year, Board members made no transactions with MMC Norilsk Nickel shares, only Abramov N. held them (0.000667%).