Conflicts of interest
Resolution of conflicts of interest is one of top priorities of the Company’s an
The conflict of interest procedures for the members of the Company’s Board of Directors are outlined in the Regulation on the Board of Directors of Russian RailwaysApproved by Order No. 265-r of the Russian Government dated 25 February 2004 (as amended).. The members of the Company’s Board of Directors, acting reasonably and in good faith, are expected to make decisions considering all available information, in the absence of a conflict of interest. The members of the Company’s Board of Directors may not use their official position and information about the Company’s operations for their personal advantage or allow using the same by third parties. Directors have a duty to disclose to the Board of Directors any matter under consideration by the Board of Directors in which they have a personal interest before the discussion of such matter begins and a duty to abstain from voting on any such matter.
There is a procedure in place obliging the members of the Board of Directors to inform the Audit Commission and the Company’s auditor about any legal entities, in which they independently or jointly with their affiliated person (persons) own 20 or more percent of voting shares (interests, stakes), as well as about their participation in the governance bodies of legal entities, any known or proposed transactions, in which they may be considered as interested parties, and about an intention to establish or hold interest in any entities competing with the Company.
In accordance with the Regulation on the Settlement of the Conflict of Interest of Russian RailwaysApproved by Russian Railways’ Order No. 321 dated 24 February 2016., all employees, including the members of the Management Board, are required to disclose conflicts of interest.
In 2019, 184 cases of conflict of interest were revealed (up 75% vs 2018) due to improved ways of identifying them. Measures were taken to resolve each conflict of interest depending on the case (see the chart).
In order to identify and eliminate causes of and conditions conducive to the emergence of conflicts of interest, ensure an objective and timely consideration and resolution of conflicts of interest, and protect the legitimate interests of Russian Railways and the rights of its employees, the Company has established a Conflict of Interest CommissionAs per Russian Railways’ Order No. 322r dated 25 February 2016..
Russian Railways’ anti-corruption policy
|Identify and resolve conflicts of interest; support the work of relevant commissions||Cooperate with public prosecution and law enforcement agencies|
|Monitor the compliance of Russian Railways’ employees with anti-corruption requirements, restrictions, and prohibitions||Implement anti-corruption initiatives jointly with the Russian Ministry of Labour and Social Protection, non-governmental organisations, major business associations and business community in general|
|Make sure that employees read and acknowledge the Company’s by-laws||Assess and update the register of corruption risks|
|Arrange legal training and promote anti-corruption initiatives among employees||Take measures to minimise corruption risks|
|Train and educate employees||Take measures to prevent corruption|
Russian Railways’ anti-corruption policy is based on a set of interrelated principles, procedures and initiatives designed to prevent and combat corruption and mitigate corruption risks. It is intended to ensure that managers and employees, as well as Board members, the investment community and other parties align around the idea of zero tolerance to corruption in all forms and manifestations and inevitability of punishment for corruption-related offences.
The measures taken by the Company to prevent corruption were approved by experts as meeting anti-corruption laws and provisions of the Anti-Corruption Charter of the Russian Business.
The Company operates in accordance with the National Anti-Corruption PlanApproved by the Russian President’s Decree No. 378 dated 29 June 2018. and Russian Railways’ Anti-Corruption Action Plan for 2018–2020.
In 2019, the Group implemented the following key initiatives:
- submission of income, expenses, assets and liabilities statements by employees holding corruption-prone positions;
- ensuring that employees comply with restrictions, requirements, and prohibitions with respect to notifying the employer of the attempts to induce them to commit corruption offences as well as with the procedure for reporting gifts received in an official capacity or while discharging their duties;
- holding best practice workshops involving representatives of government and law enforcement agencies, public organisations and Russian Railways’ employees responsible for the activities aimed at preventing and combating corruption in Khabarovsk and Rostov-on-Don;
- implementing anti-corruption initiatives jointly with the Russian Ministry of Labour and Social Protection, Office of the Prosecutor General, Russian Union of Industrialists and Entrepreneurs, Chamber of Commerce and Industry of the Russian Federation, educational institutions and business community to improve, unify, and enforce legislation, assess anti-corruption practices, shape and encourage responsible behaviour of employees;
- notifying the Audit and Risk Committee of Russian Railways’ Board of Directors of the results of monitoring of risk management processes and internal anti-corruption control, as well as the effectiveness of anti-corruption initiatives implemented by Russian Railways.
An effective feedback channel is Russian Railways’ Anti-Corruption Hotline. In 2019, the number of messages received by the Hotline more than doubled – 654 vs 323 in 2018.