Governance
By 2010, VTB Group established its “Strategic Holding” governance model envisaging:
- shared development strategy for VTB Group companies;
- single brand;
- centralized 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 Organizational Structure. To carry out administrative management, the corporate governance mechanism is applied, which implies exercise of the parent bank’s rights as principal shareholder by means of participation of its representatives in management bodies of subsidiaries;
- functional management – coordination along business and support areas within VTB Group. Functional management 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 business plans of VTB Group and its members;
- analyzing business plan progress reports;
- evaluating liquidity and risk situations;
- supervising implementation of priority projects;
- approving standards, approaches and principles of VTB Group operation.
Governance system development strategy in 2010-2013 is mainly aimed at adjusting it to the current objectives of VTB Group development, including a stronger role of product and business lines.
VTB Group Organizational Chart
including subholding VTB Bank (Austria) AG and Vietnam-Russia Joint Venture Bank as of 07 February 2011VTB Group includes JSC VTB Bank (hereinafter referred to as "VTB" or "the Bank"), lending and financial institutions in the charter/share capitals of which the Bank holds more than 50 per cent of the total number of voting shares, and which are classified, pursuant to the laws of the country of their incorporation, as lending institutions (i.e. institutions engaged in banking operations), or financial institutions (i.e. institutions which are not classified as credit institutions but provide financial services).
| Financial Institutions | Lending Institutions | |
|---|---|---|
| Russia |
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| CIS |
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| Europe |
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| Asia and Africa |
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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.
Governance Mechanisms
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.
