High-quality corporate governance is the foundation of any company, lacking which it is impossible to achieve sustainable development of society and build a successful business nowadays. MTS has always paid great attention to the development of its corporate governance and strived to ensure that MTS corporate governance practices meet the best standards.

Key MTS corporate governance principles include:

• comprehensive protection of shareholder rights and interests;
• information openness and transparency;
• single corporate policy in respect of subsidiaries;
• independence of the Board of Directors when defining the Company’s strategy, approving business plans, and making other important decisions;
• control over management activities;
• observance of business ethics when doing business;
• doing socially responsible business aimed at ensuring the sustainable development of the Company and its welfare.

Best practices of 2021:

• independent directors constitute the majority in the MTS Board of Directors;
• deputy Chairman of MTS Board of Directors is an independent director;
• MTS manages to maintain a high level of transparency;
• assessment of performance of the MTS Board of Directors (including with the involvement of a third party independent consultant) is carried out regularly;
• high level of attention to the ESG agenda.

With adoption of the restated Corporate Governance Code (hereinafter referred to as the “CGC”) in 2014, MTS began work on introducing the principles and recommendations of the CGC into the Company’s practices, for which a Roadmap was developed in 2014-2015.

As part of implementation of the principles and recommendations of the CGC, the following activities were implemented, among other things.

• Procedures to hold a shareholders meeting have been finalized (hotline, online broadcasting of the meeting etc.).
• The scope of information disclosed on the website is increased (equity capital structure, information about the main subsidiaries etc.).
• Corporate procedures have been finalized (monitoring of the information disclosure processes, preliminary review of the corporate documents etc.) were finalized.
• New practices have been introduced (BoD performance assessment, submission of committees’ work reports to the BoD etc.).
• Top-level corporate documents have been revised (Charter, Regulations on the General Meeting of Shareholders, on BoD etc.).
• Since the approval of the Roadmap for the implementation of principles and recommendations of the CGC, more than 300 events have been realized, and MTS has achieved compliance with 89% of the principles and recommendations of the CGC.

Since 2015, MTS has been demonstrating a consistently high level of compliance with the main recommendations of the CGC.

In 2021, the level of compliance with the MTS CGC remained high, and we will strive to maintain a consistently high level of compliance with the CGC in the future.

Corporate governance index

Based on the 2021 results, MTS has remained in the top 10 companies of the National Corporate Governance Index for the fourth year in a row.

In 2021, the Telecommunications industry was the leader in terms of disclosure of information on compliance with corporate governance principles.

The National Corporate Governance Index research includes several key components, namely:

• rights of shareholders, major corporate actions;
• Board of Directors, Corporate Secretary and Executive Management;
• Risk management and internal control;
• disclosure of information;
• sustainable development..

Since 2021, the index has included a new research component, i.e. “Sustainable Development”. Even before the introduction of this component, we were committed to the principles and standards of sustainable development, and strived to implement the best practices.

Thus, prior to the  2021 research, the Corporate Governance Committee of the Board of Directors of MTS was transformed into the Corporate Governance, Environmental and Social Responsibility Committee. An ESG strategy was also developed and the Diversity, Equity and Inclusion Policy was approved.