South West | Finance, business

Sberbank’s Supervisory Board members under scrutiny by minority shareholders

28 May '10
By Natalya Starostina

Source: http://www.rbcdaily.ru/2010/04/29/finance/475407

Sberbank’s Minority Shareholders Committee looks set to bring the bank’s Supervisory Board members under close scrutiny. To achieve that the body has developed questionnaires for directors to fill out; answers are expected to help assess their value for the bank owners. The future responses may also be used as recommendations for keeping or getting rid of this or that director.

“We want to assess the independent directors’ contribution to better corporate governance and see how useful they are for the bank shareholders, especially minority ones. Someone must uphold the rights of the minority shareholders too,” Sberbank’s Vladimir Statyin told RBC daily.

Sberbank’s minority shareholders have put together questions for both ordinary and independent Board members to answer. The former, for example, are requested to assess the latter’s performance. Sberbank’s independent directors, including Rajat Gumar Gupta, Sergei Guriev, Kairat Kelimbetov and Vladimir Maou, will be reportedly given grades from A to E regarding their professionalism, skills in financial and investment management, disinterestedness in statements and deeds, etc.

There are some questions, though, that imply a certain degree of subjectivity, for instance, one that assesses an independent director’s receptivity to criticism, diligence in day-to-day duty, conduct ethics, etc.

It’s likely that the questionnaire may be turned into a 'welcome ticket' for independent directors to be re-elected or, conversely, a ‘cudgel’ to see poorly performing ones off the Board (including early expulsion cases, too). For example, Rajat Gupta’s reputation has been questioned. He’s under investigation in the United States on alleged insider trading; as an independent director of Goldman Sachs Mr. Gupta is believed to have been self-interestedly leaking inside info about the bank’s deals.

Apropos, Mr. Gupta is Sberbank’s best-paid independent director; in 2009, he received a total of about 440,000 Euros while other directors were paid a max. 25,000 Euros each. Nevertheless, according to Sberbank president German Gref, Mr. Gupta will continue in office pending investigation results.

The bank’s ordinary Board members must also be evaluated, minority shareholders believe. Therefore some questions for the independent directors to answer have also been reportedly included in the questionnaire. The directors will have to give their appraisal of how effectively the Supervisory Board monitors bank managers, say if the Board is manned enough to cope with its tasks, and assess the current ratio of the independent, executive and other directors in the firm. The representation of all shareholder groups on the Board is also to be evaluated.

“We would also like to figure out what important aspects of the bank’s activity are of most interest for minority shareholders; to find out what groups such shareholders represent,” Mr. Statyin said. His Committee has explained that questions in the questionnaires are still subject to change.
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