The Government adopted a regulation on the implementation of Key Performance Indicators (KPI) for the assessment of joint stock companies and other entities with a state shareholding, except for banks and insurers, which will come into force starting from 1 January 2016.
The KPIs will be used to assess the efficiency of an organisation’s executives and should be approved by the supervisory board or the founder of the company. The list of KPIs has to be added as addition to the annual business plan of the company followed by its publication on its web-site. In addition, they should be electronically reported to the authorised government body on a quarterly and annual basis and pass through external audit.
It is proposed that remunerations of governing bodies are correlated with KPIs and poor or low efficiency of the executive body during two consecutive quarters entails the termination of the labour contract with the chairman of the executive body.
Contact:
Yuliya Shibukova
Relationship Manager
Global Securities Services Russia
Yuliya.Shibukova@unicredit.ru