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Governance
By 2010, VTB Group had established its "Strategic Holding" governance model, which envisaged:
- a shared development strategy for VTB Group companies;
- a single brand;
- centralised financial efficiency and risk management;
- unified compliance systems;
- coordinated planning and reporting processes;
- focus on implementing best practices and developing common standards.
Under the current governance system, management procedures shall be implemented along two major lines:
- administrative management — managing subsidiaries within VTB Group’s Organizational Structure. To carry out administrative management, the corporate governance mechanism is applied, which entails the exercising of the parent bank’s rights as the principal shareholder by means of participation of its representatives in management bodies of VTB Group’s subsidiaries;
- functional management — coordination along business lines and support and oversight areas within VTB Group. Functional coordination is an additional governance mechanism for an expert review of management decisions at the preparation stage.
VTB Group Management Committee operates at the group level and is in charge of:
- considering development strategies for various business lines;
- reviewing the business plans of VTB Group and its members;
- analyzing business plan progress reports;
- evaluating liquidity and risk situations;
- supervising the implementation of priority projects;
- approving the standards, approaches and principles of VTB Group operations.
The governance system development strategy in 2010–2013 is mainly aimed at bringing it into line with the current objectives of the development of VTB Group, including assigning a stronger role to product and business lines.
VTB Group Organizational Chart
JSC VTB Bank
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Banco VTB Africa, SA (Angola)
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Russian Commercial Bank (Cyprus) Ltd.
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VTB Capital plc (UK, Singapore, UAE)
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"VTB Capital IB Holding", Ltd
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“VTB-Capital”, CJSC
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“VTB Pension administrator”, Ltd
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“VTB Arena”, CJSC
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“VTB-Leasing Finance”, Ltd
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“VTB-Leasing Ukraine”, Ltd
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"VTB Leasing" (Belarus)
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VTB Leasing (Europe) Ltd (Cyprus)
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VTB-Leasing Capital Ltd (Ireland)
- Parent organisation
- JSC VTB Bank's subsidiaries
- Subsidiaries of JSC VTB Bank's subsidiaries
- Non-financial subsidiary of VTB Group
VRB is not a member of VTB Group, but it may significantly impact its activities due to a large holding of VRB shares by VTB.
VTB Group governance is aimed at taking the fullest advantage of the Group competitive edge, increasing its share in target markets, enhancing its performance indicators and strengthening VTB Group capitalization.
In terms of integration, VTB Group is currently implementing the Strategic Holding Model which primarily implies sharing an overall strategic vision, major concepts and best practices against a background of somewhat limited integration and centralization. Under the model, VTB Group, in particular, should have a common development strategy of all its companies, a single brand, centralized financial and risk management, coordinated budgeting and reporting systems, with a focus placed on sharing best practices and applying the same standards.
VTB Group governance is founded on the Matrix Approach which allows managing the Group along two axes:
1. Administrative management - management of the subsidiary companies as legal entities within VTB Group organizational structure;
2. Functional management - management within business areas and other functional areas at the Group as a whole.
The main governance mechanism used at VTB Group is its corporate governance, i.e. exercise of the Bank's rights as a major shareholder through participating in the management bodies of its subsidiaries. Functional coordination of VTB Group main business areas, including support and control areas (e.g., risk management, planning, budgeting and management reporting, brand, internal control and audit) serves as an additional governance mechanism.
This additional mechanism is applied in order to achieve the greatest synergy effect within the Group, to share the best practices among VTB Group member companies acting alongside certain business lines, and to limit risk exposure. Functional coordination also facilitates sharing knowledge and experience among the Group companies, and allows pooling the resources available to complete certain projects. Functional coordination helps create common standards, principles and limits to be applied to certain VTB Group business lines.
