Board activities during 2023
In 2023, the Board of Directors held 24 meetings and reviewed 300 matters.
Breakdown by committee:
- Strategy and Portfolio Management Committee (SPMC): 5 meetings, 77 matters
- Nomination and Remuneration Committee (NRC): 10 meetings, 77 matters
- Audit Committee (AC): 13 meetings, 108 matters
- Health, Safety, Environment and Sustainable Development Committee (HSE&SD): 5 meetings, 40 matters.
In 2023, the Board of Directors placed particular focus on ensuring financial stability, overseeing investment project management and sustainability issues, internal audit and risk management, developing management KPIs, as well as safety and well‑being of employees.
Strategic session in 2023
As part of the scheduled session held on 26 June 2023, the Board of Directors reviewed relevance of the KMG Development Strategy for 2022–2031, analysis of external factors and the status of KMG’s strategy with respect to major oil and gas assets.
Board of Directors’ meeting on sustainability
On 6 October 2023, the Board of Directors held its annual meeting on sustainable development and discussed the following important matters:
- the sustainable development framework and ESG risk rating of KMG;
- TCFD disclosures and new financial reporting standards at KMG;
- progress update of the Low‑Carbon Development Programme of KMG.
Follow‑up on KMG’s key matters
To oversee the implementation of KMG’s strategic initiatives and ensure timely corrective actions, KMG’s Board of Directors requires that the Chairman of KMG’s Management Board report regularly on key changes in the Group’s operations and give other updates on HSE matters, interim financial and operating results, interested‑party transactions approved by the Management Board, progress on the implementation of the Group’s strategy, KPIs achievement, investment projects implementation, as well as follow‑up reports on KMG’s consolidated Development Plan, reports from the Board committee chairs, follow‑up reports on resolutions of the Board of Directors, and performance reports submitted by units reporting to the Board of Directors.
At every meeting, the Board of Directors’ Strategy and Portfolio Management Committee considers and discusses progress reports on major oil and gas projects (Kashagan, Karachaganak and Tengiz), as well as on transformation and privatisation programmes.
Performance evaluation of the Board of Directors
In accordance with the Code, the Board of Directors, its committees and members of the Board of Directors should be evaluated every year as part of a structured process approved by the Board of Directors. This process needs to be in line with Samruk‑Kazyna’s relevant methodology. In addition, at least once every three years the performance evaluation process is run with the involvement of an independent professional organisation.
In 2021, eleven portfolio companies of Samruk‑Kazyna, including KMG, were subject to an independent corporate governance review for the period from 1 January 2020 to 31 May 2021 conducted by PricewaterhouseCoopers LLP. The review assessed corporate governance in the following five areas: performance of the Board of Directors and the executive body; risk management, internal control and audit; sustainable development; shareholders’ rights; and transparency. For this reason, no separate independent evaluation of the Board of Directors’ performance was conducted in 2022.
In accordance with the Code’s requirements, in 2023, members of the Board of Directors conducted a self‑evaluation through questionnaires about their performance in 2022. The self‑evaluation questionnaire was developed by the Chairman of the Nomination and Remuneration Committee in cooperation with the Chairman of the Board of Directors. The questionnaire comprised two sections (Composition and Processes, Behaviour and Actions) and featured 30 questions. The self‑evaluation results were previewed by the Nomination and Remuneration Committee, which recommended that the Chairman of the Board of Directors together with the Chairman of the Nomination and Remuneration Committee review the following aspects as part of the Board of Directors meeting when discussing the results of the self‑evaluation of the Board of Directors’ performance in 2022:
- diversity in all aspects;
- succession plan and procedure for electing members of the Board of Directors;
- KMG’s strategy;
- professional development and training.
The report on self‑evaluation of the Board of Directors’ performance in 2022 (the “2022 Report”) was presented and discussed at a closed meeting of the Board of Directors attended only by members of the Board of Directors and the Corporate Secretary. The discussion included an analysis of the Board members’ self‑evaluation results and a review of the skills and competencies scored below four points (out of a maximum of five) (the “areas for improvement”). Furthermore, the Board of Directors developed a Plan to Improve the Board of Directors’ Performance (the “Plan”) to enhance the quality of its work across the areas for improvement and reviewed progress in implementing the previously adopted Plan.
In December 2023, the Board of Directors reviewed the matter of the Board of Directors’ 2023 performance evaluation. Following the discussion, the KMG Board of Directors decided to evaluate its 2023 performance through self‑evaluation with a view to identifying aspects of the Board’s activities that require improvement and comparing the results with the self‑evaluation scores obtained earlier. Furthermore, the Board of Directors decided to add new questions to the questionnaire to cover the Action Plan to Improve KMG’s ESG rating, for example: 1) The Board of Directors takes decisions based on their alignment with: KMG’s Strategy; the UN Sustainable Development Goals that were classified by KMG as priority ones; KMG’s KPIs, including in the ESG area; 2) The composition of the Board committees is sufficiently balanced to allow for the submission of objective and unbiased recommendations to the Board of Directors and protect them from the influence of the majority shareholder or KMG’s management.
The self‑evaluation of the Board of Directors’ performance in 2023 was completed in 1Q 2024 in line with the above methodology. The report on self‑evaluation of the Board of Directors’ performance in 2023 (the “2023 Report”) containing both the self‑evaluation results for 2023 compared to those for 2022 and the plan to improve the same across the areas for improvement so identified was previewed by the Nomination and Remuneration Committee. The 2023 Report was then discussed at a meeting of the Board of Directors attended only by members of the Board of Directors and the Corporate Secretary. With this in mind, the KMG Board of Directors will further discuss improvements to its activities.
Corporate Secretary
The Corporate Secretary’s main role is ensuring regular communication between KMG and its shareholders as well as between shareholders and the Board of Directors, the Internal Audit Service, the Compliance Service, the Ombudsman, the Management Board and other bodies within KMG.
The Corporate Secretary’s responsibilities include providing full support to the Board of Directors and its committees, assisting shareholders in making timely, high‑quality corporate decisions; acting as an adviser to the Board members on any matter related to their roles or the applicability of the Code’s provisions, and monitoring the implementation of the Code. The Corporate Secretary is responsible for improving corporate governance practices at KMG. The Corporate Secretary is a Company employee acting independently and reporting to the Board of Directors.
Nationality: Republic of Kazakhstan
Date of birth: 22 January 1980
Education:
- Al‑Farabi Kazakh National University (International Relations Department), majoring in international law;
- Russian Presidential Academy of National Economy and Public Administration, MBA programme, majoring in Management;
- Certified Corporate Secretary, certified trainer in corporate governance for corporate secretaries, trainer at Samruk Business Academy
Experience
- Between 2001 and 2007, he held various jobs working at the Tengiz field in the Atyrau Region. From 2007 to 2012, he worked at Development Bank of Kazakhstan, and from 2012 to 2014, he served in different capacities at KMG and KazTransGas.
- Since 5 January 2015, he has been Corporate Secretary at KMG.
- On 1 February 2019, Damir Sharipov was elected to the Corporate Secretaries Committee of the National Council for Corporate Governance at the Presidium of the National Chamber of Entrepreneurs of the Republic of Kazakhstan Atameken