Principles of corporate governance
“Baiterek” NMH” JSC is considering corporate governance as the key tool for the increase of the Holding’s and its subsidiaries’ efficiency, ensuring transparency and accountability, consolidating its reputation and reducing the costs for capital raising. The Holding is striving to contribute to the rule of law in the Republic of Kazakhstan through the implementation of proper corporate governance practices.
The effective corporate governance structure implies respect for the rights and interests of all persons interested in the activities of the Holding and contributes to the success of the Holding’s activities. The Holding’s corporate governance system provides for a clear division of powers and responsibilities between the authorities, officials and employees of the Holding.
The fundamental principles of the Holding’s corporate governance are:
- delineation of powers principle;
- protecting the rights and interests of the Sole Shareholder principle;
- the Holding’s effective management by the Board of Directors and the Management Board principle;
- sustainable development principle;
- risk management, internal control and internal audit principle;
- corporate conflicts and conflicts of interest settlement principle;
- transparency and credibility of information disclosure in regard to the Holding’s activities principles.
Due to the adoption of the Model Corporate Governance Code in government-controlled joint-stock companies, except for the National Welfare Fund (the Decree No. 21of the Minister of National Economy of the Republic of Kazakhstan dated October 5, 2018), amendments and additions were made to the Holding’s Corporate Governance Code by the Decree No. 681 of the Minister of Industry and Infrastructural Development dated August 29, 2019.
The Holding’s Corporate Governance Code.pdf
Internal audit services evaluate the corporate governance system once in every two years in the Holding’s subsidiaries, followed by the approval and monitoring of action plans to improve the corporate governance system, including measures stipulated by international practices for corporate governance structure, conflict of interest settlement, Board of Directors performance efficiency processes, risk management systems, internal audit, transparency.
In accordance with the best corporate governance practices, the Holding annually prepares Corporate Governance Principles Performance Report.
Report on compliance/non-compliance with the principles and provisions of the Corporate Governance Code of Baiterek National Managing Holding Joint-Stock Company for 2019
The corporate secretary is an employee of Baiterek NMH JSC, who is not a member of the Board of Directors or the Management Board of the Holding, who is appointed by the Board of Directors of Baiterek NMH JSC and reports to the Holding's Board of Directors.
The legal status of the Corporate Secretary is determined by the legislation of the Republic of Kazakhstan, the Charter of the Holding, the Regulations on the Corporate Secretary of the Holding and other internal documents of the Holding.
In accordance with the Regulations on the Corporate Secretary of Baiterek NMH JSC, by decision of the Board of Directors of the Holding, the duties of the Corporate Secretary of Baiterek NMH JSC can be assigned to the Head of the Office of the Prime Minister of the Republic of Kazakhstan, who is not an employee of the Holding and who is not subject to labor relationship and no remuneration is paid. At the same time, the Head of the Office of the Prime Minister of the Republic of Kazakhstan does not participate in the management of the Holding.
Ensuring the effective implementation of the functions assigned to the Corporate Secretary is the main task of the Corporate Secretary Service of the Holding. The service is headed by the Deputy Corporate Secretary - Head of the Corporate Secretary Service Maira Dyusenbaevna Turganova. The Corporate Secretary Service is a structural subdivision of the Holding and reports directly to the Corporate Secretary.
The main tasks of the Corporate Secretary include:
- ensuring compliance by the bodies and officials of the Holding with the rules and procedures of corporate governance that guarantee the implementation and protection of the rights and interests of the Sole Shareholder;
- ensuring the implementation of measures to prepare decisions of the Board of Directors in accordance with the requirements of the legislation of the Republic of Kazakhstan and internal documents of the Holding;
- ensuring the efficient operation of the Board of Directors of the Holding and its committees;
- ensuring the storage, disclosure and provision of the necessary information about the Holding;
- ensuring clear and effective interaction between the bodies of the Holding.
By the decision of the Board of Directors of the holding from April 16, 2019 No. 03/19, the Executive Secretary of Baiterek NMH JSC has been appointed Head of the Office of the Prime Minister of the Republic of Kazakhstan Koishybayev Galymzhan Telmanovich.
External auditor of financial statements of JSC "NMH "Baiterek"
The choice of an audit organization for JSC "NMH "Baiterek" and organizations, fifty or more percent of voting shares (participatory interest) of which directly or indirectly belong to JSC "NMH "Baiterek" on the basis of ownership or trust management is carried out in accordance with the Rules for the procurement of goods, works , services by national management holdings, national holdings, national companies and organizations, fifty or more percent of voting shares (participatory interests in the authorized capital) of which directly or indirectly belong to the national management holding, national holding, national company.
Mission of the internal audit is to maintain and increase the value of the organization by the objective internal audits based on a risk-oriented approach, recommendations providing and knowledge sharing.
In order to ensure the independence and objectivity of the internal audit, the Internal Audit Service of “NMH “Baiterek” JSC (IAS) is a body directly subordinated to the Board of Directors of “NMH “Baiterek” JSC and reports to it on the works performed.
In accordance with the requirements of the legislation of the Republic of Kazakhstan, the Charter and the Code of Corporate Governance of “NMH “Baiterek” JSC, the norms of the Regulation on IAS and the Rules of the internal audit organization of “NMH “Baiterek” JSC - IAS in its activity is guided by the International Fundamentals of Professional Internal Audit Practice, the elements of which are the mission and definition of the internal audit, basic principles of professional internal audit practice, the code of ethics and the International Professional Internal Audit Standards (IPIAS), as well as IPIAS application guidance and practical instructions of the Global Institute of Internal Auditors on the implementation of internal audit.
Following the results of the first five years of the IAS activity from 2013 to 2017, an independent external audit of its activity was conducted.
Compliance of the Internal Audit Service of “NMH “Baiterek” JSC activity to the International Professional Standards of the Internal Audit is confirmed by “KPMG Tax and Advisory” LLP an external independent appraiser in 2018.
In addition to the audits of risk-significant areas in the activity of “NMH “Baiterek” JSC and consulting services, IAS periodically conducts comprehensive assessments of the effectiveness of the internal control systems, information security, fraud and corruption control, risk management and corporate governance of the Holding in accordance with the statutory provisions, internal methods and taking into account applicable international corporate standards.
Risk management is an integral part of the Holding's activities. It is aimed at identifying, assessing and monitoring all significant risks of the Holding, as well as taking measures to reduce the risks level of these risks. The risk management system of the Holding is presented as three-level hierarchy:
- Board of Directors is absolutely responsible for the proper functioning of the risk management system, defines the objectives of the Holding's activities and approves the risk management documents.
- Management Board is responsible for creating of effective risk management processes, "risk awareness" culture and risk management philosophy.
- Risk Management Department controls compliance with the requirements of the regulatory documents, implementation of general principles and methods for financial and non-financial risks.
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Compliance and anti-corruption management
1. Compliance-risk management
Compliance Service of Baiterek NMH JSC is part of the corporate governance system and is responsible for compliance risk management – the risk of loss (material and reputational) as a result of non-compliance of Baiterek NMH JSC and its employees with the requirements of the legislation of the Republic of Kazakhstan.
The main functions of the Compliance Service are coordination of compliance risk management, counteraction to corruption, prevention of conflicts of interest, consideration of applications of individuals and legal entities on violations of the requirements of the Code of Business Ethics, corruption and other unlawful actions.
2. Anti-Corruption policy
Baiterek NMH JSC, being the main financial agent of the Government of the Republic of Kazakhstan, is actively working to counteract corruption through the introduction of control functions to prevent and detect corruption, and the formation of an atmosphere of tough rejection of corruption in Baiterek NMH JSC in any of its manifestations.
For this purposes, Baiterek NMH JSC adopted an Anti-Corruption Policy, which includes a set of measures to combat corruption, as well as the formation of an anti-corruption culture of Baiterek NMH JSC employees, which ensures the observance of the principles of honesty and transparency in the performance of job duties.
See the information on counteracting corruption in the Republic of Kazakhstan on the following links: http://kyzmet.gov.kz/en and http://anticorruption.gov.kz/en
Analytical reference for corruption risks internal review.docx
3. Code of Business Ethics
Baiterek NMH JSC adopted the Code of Business Ethics, which provides a set of rules that establish the fundamental values and principles of corporate (business) ethics, which are guided by officials and employees of Baiterek NMH JSC.
Code of Business Ethics