Bank of Russia issues recommendations for board of directors self-assessment

The recommendations have been drawn up in pursuance of the Corporate Governance Code and may be used by public as well as other companies, including financial institutions, for the purpose of identifying strengths and areas of prospective development in the work of boards of directors as a key component in the corporate governance system.

The Corporate Governance Code suggests that the efficiency of board of directors’ performance be assessed regularly. The recommendation is to conduct a self-assessment at least once a year and an external assessment with an independent consultant — at least once every three years.

The Bank of Russia believes that the board of directors self-assessment methodology must take into account the specifics of corporate governance, the communication environment, the practice of interaction existing between board of directors members, between the board and executive authorities and shareholders, the actual structure and composition of the board of directors, and corporate needs. Questions proposed by the Bank of Russia to be included in the questionnaires are of a basic nature; however, they may be adapted given the specifics of organisations and their adopted corporate practices, and also supplemented depending on the outcome of previous assessments of board of directors performance efficiency.

Self-assessment results shall be used when formulating proposals on the composition of a future board of directors, creating induction and director development programmes, and also in other areas of the work of the board of directors.

The Corporate Governance Code recommends that the key findings of self-assessments be disclosed in annual reports.