Board of Directors and Board committees

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’s authority and formation process, as well as the procedure for convening and holding Board meetings are determined by the Company’s 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 ensures a balanced mix of professionalism, expertise and experience required for the Board to properly perform its functions and best align its activities with the Company’s goals and objectives. All Board members enjoy an impeccable business reputation and recognition (including among investors) and have no conflicts of interest with Nornickel. The current Board of Directors comprises six independent directors. An objective judgement that independent directors bring to the table, along with their constructive feedback, is a valuable contribution to the Board’s leadership and the Company’s operations on the whole. The independent directors’ contribution to decision making helps align the interests of various stakeholder groups while improving the quality of management decisions.

As at 1 January 2022, the Board of Directors consisted of Sergey Barbashev, Sergey Batekhin, Alexey Bashkirov, Sergey Bratukhin, Sergey Volk, Marianna Zakharova, Sergey Luchitsky, Roger Munnings, Gareth Penny, Maxim Poletaev, Vyacheslav Solomin, Evgeny Shvarts, and Robert Edwards, who were elected at the 2021 Annual General Meeting of Shareholders.

In March 2022, foreign nationals Gareth Penny, Roger Munnings and Robert Edwards announced their resignation from the Board of Directors.

Following the Annual General Meeting of Shareholders that took place on 3 June 2022, Sergey Bratukhin, Sergey Barbashev and Vyacheslav Solomin stepped down from the Board of Directors, and Denis Alexandrov, Andrey Bougrov, Alexey Germanovich, Alexey Ivanov, Vsevolod Rozanov, and Egor Sheibak were elected as new Board members.

Following the Extraordinary General Meeting of Shareholders that took place on 24 November 2022, Maxim Poletaev and Vsevolod Rozanov stepped down from the Board of Directors, with Elena Bezdenezhnykh and Alexandra Zakharova elected as new Board members.

As at 31 December 2022, the Board of Directors had 13 members, including:

• six independent directors: Denis Alexandrov, Alexey Germanovich, Sergey Volk, Alexey Ivanov, Stanislav Luchitsky, and Evgeny Shvarts
• six non-executive directors: Andrey Bougrov, Sergey Batekhin, Alexey Bashkirov, Elena Bezdenezhnykh, Alexandra Zakharova, and Egor Sheibak
• 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 was chaired by Gareth Penny, who in line with global best practice was an independent director. In March 2022, due to the challenging geopolitical situation, independent non-executive directors Gareth Penny, Roger Munnings and Robert Edwards decided to step down from the Board of Directors. Since Gareth Penny could not perform his duties as the Board Chairman, the Board of Directors decided to delegate the functions of convening and holding the Company’s Board meetings, organising the keeping and signing of their minutes, as well as presiding over its meetings to Sergey Batekhin, Deputy Chairman of the Company’s Board of Directors.

The increased pressure of sanctions on the Company and the dramatically wider scope of strategic challenges called for a better coordination within the entire management team. Non-executive Director Andrey Bougrov was elected as Chairman of the Company’s Board of Directors in June 2022 for the Board to effectively handle its tasks. Andrey Bougrov’s long track record at the Company offers a range of advantages since he knows the ins and outs of the Company’s operations and its internal business processes, which helps better understand them and facilitates fast but high-quality decision making. In his role as Senior Vice President for Sustainable Development, Andrey Bougrov focused on aligning the Company’s development strategy with the sustainability agenda, monitoring corporate internal procedures, policies and organisational structure for compliance with the requirements of international sustainability associations and certification procedures, as well as on preparing and further improving the Company’s sustainability reporting to bring it closer in line with international non-financial reporting standards. Andrey also oversaw the Company’s investor relations. Andrey Bougrov also boasts a vast track record of serving on expert councils on governance and sustainability, and chairs the Share Issuers Committee of Moscow Exchange.

For more details on Andrey Bougrov’s biography, please see this Annual Report and the Company website.

Independent directors

Independent directors assist the Board in making decisions that take into account the interests of various stakeholder groups while improving the quality of management decisions.

In 2022, in line with corporate governance best practice, Nornickel’s Board of Directors regularly evaluated 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. If a sign/signs of relationship was/were identified, the nature of such relationship was comprehensively assessed. Where the identified relationship was established to be formal in nature, the Company’s Board of Directors determined whether the Board member in question met the independence criteria based on a recommendation by the Corporate Governance, Nomination and Remuneration Committee. Thus, Board member Alexey Germanovich was determined to be independent despite his formal relationship with the Company’s contractor since such relationship did not affect his ability to exercise independent, fair and unbiased judgement. Alexey Germanovich has signed a relevant statement, under which the Director committed to represent the interests of all shareholders and the Company, despite the fact that he meets a formal relationship criterion, and inform the Board of Directors if he might start to meet any other relationship criteria or have a conflict of interest, or other ethical issues.

Over the year, the Company was in compliance with the requirements of the Listing Rules of PJSC Moscow Exchange as regards the number of independent directors on the Board.

Thus, as of 31 December 2022, 6 out of the 13 Directors, or 46.2%, were independent (Denis Alexandrov, Sergey Volk, Alexey Germanovich, Alexey Ivanov, Stanislav Luchitsky, and Evgeny Shvarts).

Selection criteria and succession

The performance of the Company’s Board of Directors is largely driven by a mix of skills, qualifications, experience, independent judgement, and degree of independence on the Board. The number of Board members and the composition of the Company’s Board of Directors enable fair and comprehensive review of matters, most informed decision making, timely detection and prevention of conflicts of interest, as well as effective performance of the Board’s other functions. When electing members to the Board of Directors, the Company is guided by the principles recommended by the Bank of Russia:

• Having a mix of skills on the Board of Directors that enables it to work as a close-knit team of professionals to drive informed and professional collective decision making by the Board;
• Balanced composition, whereby the experience, expertise and skills of the Company’s Board members complement each other and help the Board of Directors exercise fair and impartial judgement, timely identify strategic risks and assess their potential impacts;
• diversification, whereby the Board of Directors is able to review matters from different perspectives, bring up new ideas for discussion and make more balanced decisions;
• Tailored approach, whereby the Company itself decides on the optimal composition of the Board of Directors and its committees and maintains succession plans for them considering the Company’s objectives, business profile and other factors;
• Independence, whereby the Board of Directors strives to make the most fair and independent decisions. Independent directors on the Company’s Board of Directors play an important role in maintaining a balance of interests between various shareholder groups and working out the best possible solutions;
• Information transparency, whereby shareholders are provided with timely information about candidates, their professional qualities, experience, and skills.

Training of Board members

In order to update the knowledge of the Company’s Board members and better involve them in the Company’s processes, in July 2022, the Company’s management prepared and held a webinar for Board members on safety culture leadership, with training courses on handling insider information delivered on a regular basis for directors.

In September 2022, to keep up to date with local developments and progress on ESG adoption, the Company’s top managers and Board members visited production sites at Norilsk. A number of informal discussions and meetings took place during the visit.

Board of Directors’ performance

During the year, the Board of Directors continued to focus on matters critical to the Company’s sustainable growth, investor relations strategy, and operational and financial performance.

Performance evaluation of the Board of Directors

The procedure for evaluating the performance of the Company’s Board of Directors is regulated by the Performance Evaluation Policy for the Board of Directors approved by resolution of the Company’s Board of Directors. The Policy provides for internal evaluation by surveying the Board members as well as external evaluation involving professional independent consultants.

In line with the recommendations of the Corporate Governance Code, corporate governance best practice and the Performance Evaluation Policy for the Board of Directors, in 2022, the performance evaluation of the Company’s Board of Directors for 2021 was carried out by an external organisation, IDA Academy.

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 chairmen given during 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 and reviewed by the Company’s Board of Directors.

During the reporting year, the Board of Directors’ efforts focused on the areas for improvement identified by the external evaluation as well as on consolidating the progress made in priority areas.

Following the lifting of COVID restrictions, the Board of Directors and top managers resumed the practice of reviewing matters related to the Company’s business and strategic priorities at in-person meetings, including informal ones. In September 2022, to keep up to date with local developments and progress on ESG adoption, the Company’s top managers and Board members visited production sites in Norilsk. The visit involved, among other things, the discussion of charity matters.

To reflect stakeholders’ views and interests in the decision-making process, the Corporate Governance, Nomination and Remuneration Committee continued interacting with the Company’s management during 2022 when resolving on changes in the composition of the Company’s Management Board and discussing approaches to developing individual KPIs for top 10’s.

KPI improvement was an important topic discussed in 2022 at meetings of the Corporate Governance, Nomination and Remuneration Committee, the Audit Committee, and the Sustainable Development and Climate Change Committee. The Sustainable Development and Climate Change Committee approved the Company’s KPI system (including environmental and health and safety metrics). Members of the Audit Committee also regularly reviewed health and safety reports and made recommendations to improve the effectiveness of relevant efforts.

In 2022, the Strategy Committee reviewed matters related to the long-term investment programme aimed at the Company’s development, future production programme and the implementation status of several projects (development concept for the Company’s design services, IT Programme, and exploration strategy).

In line with global best standards, in early 2023, the Company summarised the Board of Directors’ performance in 2022 through continued Board of Directors’ self-evaluation, thus ensuring the continuous development and improvement of Nornickel’s corporate governance.

The internal performance evaluation of the Board of Directors in 2022 was carried out by the Corporate Governance, Nomination and Remuneration Committee in line with the resolution of the Board of Directors dated 7 February 2023.

Evaluation of the Board of Directors’ performance in 2022 showed that:

• the current composition of the Board of Directors is well-balanced in terms of directors’ qualifications, experience and business skills. The qualitative and quantitative composition of the Board of Directors matches the scale and profile of the Company’s business, its business objectives and risk profile, and meets the Company’s current and anticipated 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.

At its meeting on 28 April 2023, the Board of Directors reviewed the Report on the Internal Performance Evaluation of the Board of Directors and the recommendations of the Corporate Governance, Nomination and Remuneration Committee, and acknowledged that in 2022 the Board of Directors, the Board Chairman and the Board committees discharged their duties effectively.

The Corporate Governance, Nomination and Remuneration Committee used the self-evaluation results to identify areas for improvement and make recommendations concerning the Board of Directors’ respective functions that require performance improvement measures.

The Board of Directors will continue incorporating the recommendations of the Corporate Governance, Nomination and Remuneration Committee in its work in 2023.

Biographical details of Board members as of 31 December 2022Positions are indicated as at 2022-end.

For more detailed biographies of the Board members, please see the Company’s website, and for biographies of the members who stepped down after the Annual General Meeting of Shareholders, please see the 2021 Annual Report.

In the reporting year, Board members made no transactions with MMC Norilsk Nickel shares, with only Elena Bezdenezhnykh (0.00115%) and Egor Sheibak (0.00003%) holding shares in the Company.

Andrey Bougrov

Non-executive Director, Chairman of the Board of Directors since 2022

Born in: 1952

Nationality: Russian Federation

Education

Degree in International Economic Relations, Economist for Foreign Trade, PhD in Economics, Moscow State Institute of International Relations (MGIMO University)

Experience in the last five years

since 2002: positions at Nornickel: member of the Board of Directors (2002–2020), Chairman of the Board of Directors (2010–2013, 2022 to date), Deputy Chairman of the Board of Directors (2013–2020), Senior Vice President (2016–2020), Senior Vice President for Sustainable Development (2020–2022), member of the Management Board (2013–2022);

since 2006: member of the management board of the RSPP;

since 2013: vice president of the RSPP;

since 2015: member of the National Council on Corporate Governance non-profit partnership;

since 2016: chairman of the Share Issuers Committee of Moscow Exchange;

since 2018: chairman of the RSPP Council on Non-financial Reporting;

since 2020: member of the RSPP Climate Policy and Carbon Regulation Committee;

since 2021: member of the RSPP Coordination Council on Sustainable Development, member of the International Advisory Panel of the Asian Infrastructure Investment Bank (AIIB);

since 2022: member of the working group on ESG agenda and energy transition under the Russian Government Expert Council;

since 2022: member of the Expert Council on Sustainability and Green Finance under the Subcommittee on Sustainability and Green Finance of the State Duma Committee on the Financial Market at the Federal Assembly of the Russian Federation

Sergey Batekhin

Non-executive Director since 2020

Chairman of the Budget Committee, member of the Corporate Governance, Nomination and Remuneration Committee, member of the Strategy Committee of the Board of Directors

Born in: 1965

Nationality: Russian Federation

Education

Degree in Military and Political Translation, Foreign Languages (German and French), Assistant Translator/Interpreter, Red Banner Military Institute of the Ministry of Defence of the USSR, 1987

Degree in Finance and Credit, Economist, Plekhanov Russian Academy of Economics, 1998

Master of Business Administration, Moscow International Higher School of Business MIRBIS, 1998

Postdoctoral degree in Philosophy, International Information Technology Academy, 2002

Speaks French, German, English, and Italian

Experience in the last five years

since 2020: chairman of the supervisory board of the Digital Capital

2019–2022: member of the board of directors of Jokerit Hockey Club Oy

since 2019: chairman of the presidium of the Night Hockey League non-profit amateur hockey foundation

since 2018: member of the board of directors of LLC Kontinental Hockey League

2013–2020: positions at Nornickel: member of the Management Board (2013–2020), Vice President (2015–2016), Senior Vice President – Head of Sales, Commerce and Logistics (2016–2018), Senior Vice President – Head of Sales, Procurement and Innovation (2018–2020)

Denis Alexandrov

Independent Director since 2022

Member of the Strategy Committee, member of the Audit Committee, member of the Sustainable Development and Climate Change Committee of the Board of Directors

Born in: 1974

Nationality: Russian Federation

Education

Degree in International Economic Relations and Management, Far Eastern State University, 1996

Bachelor of Science in Business and Management, University of Maryland, 1995

Experience in the last five years

2016–2020: CEO of Russdragmet (Highland Gold Mining Limited Group)

since 2020: CEO of the public gold mining company Petropavlovsk PLC (POG)

since 2020: general director, LLC Atlas Mining

since 2021: member of the board of directors of Pokrovskiy Mine, a Petropavlovsk Group company

since 2021: member of the board of directors of PHM Engineering, a Petropavlovsk Group company

since 2022: member of the board of directors of Petropavlovsk-Avia, a Petropavlovsk Group company

since 2022: member of the Council of the Union of Gold Producers of Russia

Alexey Bashkirov

Non-executive Director since 2013

Member of the Audit Committee, member of the Strategy Committee of the Board of Directors

Born in: 1977

Nationality: Russian Federation

Education

Degree in International Economic Relations, Moscow State Institute of International Relations (MGIMO University)

Experience in the last five years

since 2015: managing director at Winter Capital Advisors

Elena Bezdenezhnykh

Non-executive Director since 2022

Chairwoman of the Strategy Committee of the Board of Directors

Born in: 1973

Nationality: Russian Federation

Education

Degree in Law, Lawyer, Krasnoyarsk State University, 1996

Experience in the last five years

2015–2018: Vice President, State Secretary and Head of Government Relations at MMC Norilsk Nickel

2018–2019: vice president for regional policy and government relations at RUSAL Global Management B.V.’s branch

since 2019: vice president for regional policy and government relations at RUSAL Management

since 2022: member of the board of directors at Yenisei Siberia Development Corporation

Sergey Volk

Independent Director since 2019

Chairman of the Corporate Governance, Nomination and Remuneration Committee, member of the Budget Committee and member of the Audit Committee of the Board of Directors

Born in: 1969

Nationality: Ukraine

Education

Master of Business Administration (majoring in Finance), University of Texas at Austin (USA), 1998

Experience in the last five years

2019-2022: member of the board of directors of Fortenova grupa d.d. (Zagreb, Croatia)

2018-2022: member of the supervisory board of Mercator d.d. (Ljubljana, Slovenia)

Marianna Zakharova

Executive Director since 2010, member of the Management Board since 2016

Born in: 1976

Nationality: Russian Federation

Education

Bachelor in Law, 1998; Master in Law (with distinction), 2000, Peoples’ Friendship University of Russia

Experience in the last five years

since 2015: First Vice President – Head of Corporate Governance, Asset Management and Legal Affairs at MMC Norilsk Nickel

Stanislav Luchitsky

Independent Director since 2021

Chairman of the Sustainable Development and Climate Change Committee, member of the Strategy Committee, member of the Corporate Governance, Nomination and Remuneration Committee of the Board of Directors

Born in: 1976

Nationality: Russian Federation

Education

Degree in Non-ferrous Metallurgy, Metallurgical Engineer, Norilsk Industrial Institute, 1999

Experience in the last five years

since 2021: deputy CEO – head of geology, technology and engineering, member of the management board of STANMIX HOLDING LIMITED

since 2021: deputy CEO – head of geology, technology and engineering, member of the management board of Russdragmet

2020–2021: deputy CEO – project director at Ozernaya Mining Company

2018–2019: CEO of Arctic Palladium

2014–2018: Head of the Chita PMO at MMC Norilsk Nickel

Alexey Germanovich

Independent Director since 2022

Deputy Chairman of the Corporate Governance, Nomination and Remuneration Committee, member of the Audit Committee, member of the Sustainable Development and Climate Change Committee of the Board of Directors

Born in: 1977

Nationality: Russian Federation

Education

Degree in Economics, Manager, Lomonosov Moscow State University, 1998

Degree in Journalism, Lomonosov Moscow State University, 2002

Executive MBA, Cranfield University, UK, 2009

Experience in the last five years

since 2008: member of the management board of the St Petersburg University Endowment Fund

2014–2019: member of the board of directors of E.ON Russia (Unipro since 23 June 2016)

2016–2018: member of the board of directors of Aeroflot

2016–2018: member of the board of directors of Ameriabank, Armenia

2018–2019: member of the board of directors of Komercijalna Banka a.d. Beograd, Serbia

Alexandra Zakharova

Non-executive Director since 2022

Member of the Audit Committee, member of the Budget Committee, member of the Sustainable Development and Climate Change Committee of the Board of Directors

Born in: 1973

Nationality: Russian Federation

Education

Degree in Economics and Labour Sociology, Economist, Plekhanov Russian Academy of Economics, 1996

Experience in the last five years

since 2020: function director at JSC Russian Aluminium Management

2013–January 2023: Head of project of the Financial Control Service of MMC Norilsk Nickel

Alexey Ivanov

Independent Director since 2022

Chairman of the Audit Committee of the Board of Directors

Born in: 1969

Nationality: Russian Federation

Education

Department of Economic Cybernetics, Faculty of Economics, 1991; postgraduate degree, Department of International Economic Relations, Leningrad State University, 1993

Institute of Chartered Accountants in England and Wales (АСА qualification), 1997

Experience in the last five years

since 2021: CEO of Green Energy

since 2020: CEO of Axioma

2010–2020: key account management partner (2016–2020), head of audit services (2013–2016), head of private company services (2010–2013) at PricewaterhouseCoopers, Moscow

Evgeny Shvarts

Independent Director since 2019

Member of the Sustainable Development and Climate Change Committee of the Board of Directors

Born in: 1958

Nationality: Russian Federation

Education

Degree in Zoology and Botany, Biologist, Lomonosov Moscow State University, 1982

Candidate of Geographical Sciences (Biogeography and Soil Geography), Institute of Geography, Academy of Sciences of the Soviet Union, 1987

Doctor of Geographical Sciences (Geoecology), Institute of Geography, Russian Academy of Sciences, 2003

Experience in the last five years

since 2021: professor at the Faculty of Geography and Geoinformation Technology, National Research University – Higher School of Economics; head of the Centre for Responsible Environmental Management at the Institute of Geography, Russian Academy of Sciences

since 2020: leading researcher at the Department of Physical Geography and Environmental Management Problems of the Institute of Geography, Russian Academy of Sciences

since 2020: member of the board of directors of UC RUSAL, IPJSC

2007–2019: director for conservation policy at WWF

since 1993: member of the board of the Biodiversity Conservation Centre charitable foundation

Egor Sheibak

Non-executive Director since 2022

Member of the Corporate Governance, Nomination and Remuneration Committee, member of the Budget Committee of the Board of Directors

Born in: 1986

Nationality: Russian Federation

Education

Degree in Public Administration, Manager, Lomonosov Moscow State University, 2008

Experience in the last five years

since 2022: deputy chairman of the Committee on Competition Development of RSPP

2013–January 2023: Head of project of the Financial Control Service of MMC Norilsk Nickel

Board committees

Committees established by Nornickel’s Board of Directors are responsible for conducting a preliminary review of critical matters related to the Company’s activities and making recommendations for decision making on matters reserved for the Board. To discharge their responsibilities in an effective way, the committees may consult Nornickel’s governance bodies and seek opinions from independent external advisors.

From the beginning of the reporting year, the Board of Directors had five committees, each consisting of five members:

• Strategy Committee;
• Budget Committee;
• Corporate Governance, Nomination and Remuneration Committee;
• Audit Committee;
• Sustainable Development and Climate Change Committee.

Members of all committees are appointed by the Board of Directors.

Strategy Committee

Committee members at 2022-end

The Strategy Committee is made up of five directors, two of whom are independent (i.e. the Committee is 40% independent). In 2022, the Committee held four meetings in person.

The Strategy Committee assists the Board of Directors by previewing matters related to:

• building a sustainability strategy
• investment planning and structural changes
• engagement with capital markets.

The Strategy Committee’s key areas of focus:

• Supporting Nornickel’s Board of Directors in developing, overseeing and adjusting the corporate strategy
• Recommending updates to the strategy.

During the reporting year, the Strategy Committee made recommendations to the Board of Directors and reviewed progress and status updates on Nornickel’s major investment projects, including Bystrinsky GOK and the Sulphur Project, as well as the Company’s contribution to the implementation of the Comprehensive Plan for the Social and Economic Development of Norilsk to 2035 (including renovation of Norilsk’s housing stock). The Committee also discussed reports on the Company’s operational performance, Progress Report on the IT Programme and Progress Report on Implementing the Company’s Energy Sector Development Strategy. The Committee also reviewed progress updates on the Transport Logistics Strategy, sales performance for 2022–2023 and the project to update the marketing strategy, as well as assessed changes in the competitive environment and the Company’s repair service development concept.

Budget Committee

Committee members at 2022-end

Nornickel’s current Budget Committee is made up of five directors, one of whom is independent (i.e. the Committee is 20% independent).

In 2022, the Committee held three meetings, including two in absentia.

In 2022, the Budget Committee focused on making recommendations to the Board of Directors to inform decision making on the amount of the Company’s 2021 full-year dividend and the dividend record date to be proposed by the Board of Directors, as well as reviewed metal price and FX forecast updates to support the Company’s 2023 budgeting. The Budget Committee also approved and recommended that the Board of Directors approve Nornickel’s 2023 budget.

Corporate Governance, Nomination and Remuneration Committee

Committee members at 2022-end

The Committee is made up of five directors, three of whom are independent, including the Committee Chairman (i.e. the Committee is 60% independent).

In 2022, the Committee held 19 meetings, including 15 in absentia and 4 in person.

The Corporate Governance, Nomination and Remuneration Committee supports the Board of Directors by:

• evaluating, overseeing and improving Nornickel’s corporate governance framework
• ensuring succession planning for Nornickel’s Board of Directors and Management Board
• providing incentives, evaluating the performance of Nornickel’s Board of Directors, Management Board, President, and Corporate Secretary, and setting relevant remuneration policies
• supervising the development and implementation of Nornickel’s information policy.

The Committee made recommendations to the Board of Directors to inform decision making on convening, preparing and holding the Annual and Extraordinary General Meetings of Shareholders, and on matters reserved to the General Meeting of Shareholders (remuneration and reimbursement of expenses of members of the Board of Directors and the Audit Commission, and liability insurance and indemnity for members of the Board of Directors and the Management Board).

The Corporate Governance, Nomination and Remuneration Committee advised the Board of Directors on evaluation of the Board of Directors’ performance in 2021, on changes to the Company’s Management Board and on the approval of a number of the Company’s internal documents. The Committee approved the Company’s set of key performance indicators (KPIs) for HSE performance and team KPIs of the Norilsk Nickel Group for 2023. The Committee reviewed the Report on the Consistent Efforts to Improve Employee Engagement at the Company. It also reviewed performance against the 2021 KPI scorecards for the Company’s top 10’s and top 100’s, as well as the Management Board labour relations and motivation system, updates on the Company’s charitable policy, sponsorship efforts and other social programmes, the Human Capital Development Programme, and the Company’s training system development strategy for 2022–2025. The Committee discussed approaches to developing individual KPIs for 2022 for top 10’s. The Committee also reviewed the annual evaluation of the Board of Directors’ performance in 2021, which concluded that the Board of Directors and the Corporate Secretary of Nornickel were effective, and assessed the independence of nominees to the Company’s Board of Directors.

Audit Committee

Committee members at 2022-end

The Audit Committee is made up of five directors, three of whom are independent directors, including the Committee Chairman (i.e. the Committee is 60% independent). On average, Committee members have more than 10 years of experience in finance.

In 2022, the Committee held 15 meetings, including 11 in person and 4 in absentia.

The Committee discharges its responsibilities by overseeing:

• financial reporting
• risk management and internal controls
• external and internal audit
• prevention of wrongdoing by Nornickel employees and third parties
• health and safety matters.

The Audit Committee plays an important role in enabling controls and accountability, and has become an effective interface between the Board of Directors, Audit Commission, independent auditor, Internal Audit Department, and management of Nornickel.

During 2022, the Audit Committee prepared for the Board of Directors a number of recommendations for decision making on matters related to the accuracy, completeness and reliability of Nornickel’s financial statements, as well as health and safety, and the approval of PJSC MMC NORILSK NICKEL’s Internal Control Policy and PJSC MMC NORILSK NICKEL’s Internal Audit Policy. The Committee also reviewed the results of audits by the Internal Audit Department and Internal Control Department and discussed the 2021 Sustainability Report. The Committee reviewed reports by the Risk Management Service on the Company’s key risks and reports by the Inspection Department for Monitoring Technical, Production and Environmental Risks, as well as the Corporate Risk Appetite Statement for 2022.

In 2022, the Audit Committee of the Board of Directors:

• reviewed the annual audit plan and internal audit development plans
• reviewed bonus-related performance targets (KPI scorecards) of the Internal Audit Department Director
• discussed the results of completed audits, including gaps identified and remedial actions designed by management to improve internal controls and minimise risks.

Sustainable Development and Climate Change Committee

Committee members at 2022-end

The Committee is made up of five directors, four of whom are independent, including the Committee Chairman (i.e. the Committee is 80% independent). In accordance with its Terms of Reference, the Committee has five members, with an option to increase its membership should the Board of Directors decide to do so.

In 2022, the Committee held four meetings, including two in person and two in absentia.

The Sustainable Development and Climate Change Committee’s key functions:

• Integrating sustainability principles, including climate change, into the Company’s activities
• Developing and implementing the Sustainable Development and Climate Change Strategy
• Managing risks and internal controls related to sustainable development and climate change
• Preparing the Company’s internal reports and disclosures on sustainable development and climate change
• Overseeing the external audit of the Company’s reports and activities related to sustainable development and climate change.

In the reporting year, the Committee members discussed a report by Nornickel’s management on the Company’s sustainability performance, including environmental protection and climate change monitoring, international certification of the Company’s activities, compliance with international standards on business conduct, as well as social and corporate governance matters. Particular attention was paid to environmental remediation after the diesel fuel spill, carbon-neutral nickel production, as well as the integration of the International Council of Mining and Metals (ICMM) standards and the Initiative for Responsible Mining Assurance (IRMA) requirements into the Company’s operations. The Committee meeting also discussed in detail matters related to supporting indigenous peoples of the Far North and studying the impacts of climate warming on permafrost.

Following the discussion, the Committee deemed it appropriate to publish information about Nornickel’s sustainability/ESG performance and future plans on the Company’s website on a regular basis. Members of the Board of Directors and Company management recognised environmental and industrial safety matters as their special focus areas and highlighted the need for sustainable results in transforming Nornickel’s industrial safety culture.