Directors’ Independence
In accordance with the
requirements of the Law
On Joint Stock Companies,
independent members of the
Board of Directors should
make at least 30%. In
2023, this proportion in the
Kazakhtelecom JSC’s Board of
Directors was 43%.
An independent director
is a person of sufficient
professionalism and autonomy
to make independent and
objective decisions free from
the influence of individual
shareholders, the executive
body and other stakeholders.
Independent Director is
a member of the Board of
Directors who:
- is not an affiliate of this
joint stock company and
has not been an affiliate of
this joint stock company
for three years preceding
his election to the Board
of Directors (except for the
case of his tenure as an
independent director of this
joint stock company);
- is not an affiliate of any
affiliate of this joint stock
company;
- is not a subordinate to
any officials of the jointstock
company or affiliated
entities of the joint-stock
company and has not been
subordinate to any such
officials during the three
years preceding his election
to the Board of Directors;
- is not a government official;
- is not a shareholder’s
representative at meetings
of the bodies of the joint
stock company and has not
been such a representative
during the three years
preceding his election to
the Board of Directors;
- does not participate in the
audit of this joint stock
company as an auditor
working as part of an audit
organisation and has not
participated in such an
audit during the three years
preceding his election to
the Board of Directors.
The independent directors
of the Company’s Board of
Directors in 2023 fully met the
independence criteria.
Conflicts of interest
GRI 2-15
Kazakhtelecom has a Conflict
of Interest Policy in place. The
Policy defines the procedure
for prevention, identification
and regulation of conflict
of interests, procedures for
interaction and coordination of
the Company’s bodies and/or
persons in case of occurrence
or probability of occurrence of
conflict of interests.
Objectives of the Conflict of
Interest Policy:
- creating conditions for
prevention, detection and
elimination of conflict of
interest;
- resolving conflict of
interest due to this
Policy in the interests of the Company and its
shareholders in accordance
with the laws of the
Republic of Kazakhstan and
internal documents of the
Company;
- maintaining the lawfulness,
validity and compliance
with the Company’s
interests of the decisions
made by an employee, a
member of the Board of
Directors of the Company
within their competence;
- promoting the formation
of an appropriate working
culture that ensures
timely identification and
resolution of conflicts of
interest;
- managing conflicts of
interest in a transparent
and timely manner, without
prejudice to the efficiency
of the Company’s bodies,
structural units and
employees;
- ensuring personal
responsibility of an
employee, member of
the Company’s Board of
Directors for decisions
taken within their
competence;
- introducing internal and
external accountability
mechanisms;
- ensuring observance of
shareholders’ rights as
well as protection of
the Company’s property
interests and business
reputation;
- ensuring that the
Company’s decision-making
mechanism cannot be
compromised;
- permanent further
improvement of procedures
for preventing conflict of
interest in the Company in
accordance with changing
realities.
In accordance with the Conflict
of Interest Policy, members
of the Company’s Board of
Directors should:
- disclose any actual or
potential conflict of
interest to the Board of
Directors;
- not to take any actions that
may lead to a conflict of
interest;
- not make decisions
on transactions where
members of the Company’s
Board of Directors have a
conflict of interest;
- on a quarterly basis, as well
as upon request, provide
the Compliance Service with
information on its affiliates
(physical and legal entities)
in the form according to the
Appendix to this Policy.
In 2023, the Board of Directors
recorded no conflicts of
interest in its work.
Activity of the Board of
Directors
In 2023, the Board of Directors
held online meetings using
existing video conferencing
platforms.
During the year, the Company’s
Board of Directors held 14
meetings and considered 103
issues.
Key decisions of the Board of
Directors in 2023:
- Approval of the Roadmap
for the Company’s ESG
Practices;
- Approval of the business
plan for the strategic
project on network
modernisation in line the authorised body’s
requirements;
- Consideration of certain
issues of the Kazakhtelecom
JSC Group’s mobile
operators;
- Approval of the Business
Plan of Kazakhtelecom JSC
for 2024-2028.
The Management Board was
also invited to speak on a
regular basis regarding the
Business Plan implementation,
occupational health and
safety, strategic projects
implementation, risks, Strategy
implementation and mobile
operators’ activities.
Summing up the results of
the Board of Directors’ work
in 2023, no cases of corporate
disputes between the Company
and members of the Board
of Directors were in place,
nor were the facts of their
misconduct.
Assessment of the
Board of Directors
GRI 2-18
The Company evaluates
Kazakhtelecom’s Board of
Directors’ performance in
accordance with the Rules for
evaluation of the performance
of the Board of Directors and
its committees, members of
the Board of Directors and the
Corporate Secretary. According
to this document, the Company
evaluates the performance
of the Board of Directors
once a year by means of self-assessment
and at least once
in three years by independent
consultants.
PricewaterhouseCoopers
consultants conducted the
last external assessment of the
Board of Directors’ performance
in 2021. According to their
assessment, the rating for the
Board of Directors and Executive
Body Effectiveness increased
from BB in 2018 to BBB. In
addition, based on the results of
this assessment, the Corporate
Governance Improvement Plan
included measures related to
the activities of the Board of
Directors.
According to the mentioned
Rules, the Board of Directors
was evaluated through selfassessment
of its performance
in 2023. The list of evaluation
criteria included questions to
assess the level of strategic
thinking, industry knowledge,
professional experience,
commitment to teamwork,
adherence to the principles of
sustainable development, and
others.
The Board of Directors reviewed
the results of the performance
evaluation of its members at
its meetings. Each member’s
performance was in line with
high standards of reasonable,
professional and efficient
behaviour. This also translated
into the Company’s strong
financial and operational results.
In this regard, the performance
of the Board of Directors in 2023
was highly assessed.
Improving the professional
competence of members of the
Board of Directors
GRI 2-17
The Company has a policy in
place to encourage professional
development and attract
external experts by members
of the Board of Directors.
This policy is based on the
best practices of corporate
governance to improve the
efficiency of the Board of
Directors’ work through the
implementation of a system
of skills development and
professional development
of members of the Board of
Directors and the exercise of
their right to engage external
experts if the issues considered
by the Board of Directors
require external professional
and independent expert
analysis. No training of the
Board of Directors members was
organised in 2023.
Committees of the
Board of Directors
GRI 2-9
In 2023, three Committees
functioned under the Board
of Directors: the Audit and
Sustainable Development
Committee, the Human
Resources, Remuneration
and Social Affairs Committee,
and the Strategic Planning
Committee.
The Company’s Board of
Directors determines and
implements quantitative
composition, term of office of
the Committees, election of
their Chairman and members
as well as early termination
of their powers. According
to the Samruk-Kazyna Fund’s
Corporate Governance Code, the
Chairman of the Committee is an
Independent Director - member
of the Board of Directors.
Audit and Sustainable
Development Committee
GRI 2-9, 2-13
The Kazakhtelecom JSC’s
Board of Directors established
the Audit Committee by its
resolution in 2006. In July
2022, the Board of Directors
renamed the Audit Committee
into the Audit and Sustainable
Development Committee.
The Committee carries out its
activity in accordance with the
Regulations on the Committee
approved by the Board of
Directors on 19 July 2022.
Composition of the Committee
in 2023:
from 01 January to 19 July:
Armanbay Jubaev (Chairman
of the Committee), Alexey
Buyanov, Dmitry Zaika.
from 21 July:
Asset Abdualiyev (Chairman of
the Committee), Dmitry Zaika,
Artur Neupokoyev.
In accordance with the
Corporate Governance Code of
Kazakhtelecom JSC, the Audit
and Sustainable Development
Committee consists entirely
of independent directors who
meet the criteria for recognising
the independence of directors
stipulated by subparagraph 20)
of Article 1 of the Law of the
Republic of Kazakhstan On Joint
Stock Companies.
In accordance with the
Regulations on the Committee,
the Chairman of the Committee
invited to the meetings to
provide information on agenda
items:
- members of the Board of
Directors;
- Heads of the Internal Audit
Service and Compliance
Service;
- representatives of the
external auditor Ernst &
Young LLP;
- employees of the Company
(top management, heads
of structural divisions,
experts) and employees of
subsidiaries.
The Audit and Sustainable
Development Committee holds
regular in-person meetings
at least once a quarter and
extraordinary meetings as
required.
In 2023, the Committee held
8 meetings, considered 29
issues (including the activities
of the Internal Audit Service,
Compliance Service, Internal
Controls and Risks, Financial
Statements, and External
Audit) and made relevant
recommendations to the Board
of Directors.
The Committee worked in
accordance with the 2023 Work
Plan. The Committee members
took active part in each of its
meetings.
In its work, the Committee is
guided by the Kazakhtelecom
JSC’s Charter, the Company’s
Corporate Governance Code, the
Regulations on the Committee.
Attendance of Audit and Sustainable Development Committee meetings in 2023
* % of participation during the term of office of a Committee member.
Human Resources, Remuneration
and Social Affairs Committee
GRI 2-20
The Board of Directors of
Kazakhtelecom JSC established
the HR, Remuneration and
Social Affairs Committee by its
decision in 2015.
The Committee reports to the
Board of Directors and carries
out its activities in accordance
with the Regulations on HR,
Remuneration and Social Affairs
Committee of the Board of
Directors of Kazakhtelecom JSC,
approved by the decision of the
Board of Directors Minutes No.2
dated 18.03.2015.
Composition of the HR,
Remuneration and Social
Affairs Committee in 2023:
from 01 January to 19 July:
Alexey Buyanov (Chairman of
the Committee), Armanbay
Jubaev, Dmitry Zaika, Gibrat
Auganov
from 21 July:
Dmitry Zaika (Chairman of the
Committee), Asset Abdualiyev,
Artur Neupokoyev, Gibrat
Auganov.
In accordance with the
Regulations on the Human
Resources, Remuneration and
Social Affairs Committee, the
Chairman of the Committee
invited to the meetings as
speakers, observers and also to
provide information on agenda
items:
- members of the Board of
Directors;
- employees of the Company
(top management, heads
of structural divisions,
experts);
- candidates for managerial
positions in accordance
with the List of managerial
positions.
In 2023, the Human Resources,
Remuneration and Social
Affairs Committee held 10 inperson
meetings, considered
33 issues (including social
issues, changes in the structure
of the Central Administration,
election of employees to the
Company’s Management Board,
appointment of the first heads
of subsidiaries, approval of KPIs
for executives, remuneration,
HR management), and made
relevant recommendations
to the Board of Directors.
The Committee worked in
accordance with the 2023 Work
Plan.
Attendance of HR, Remuneration and Social Affairs Committee meetings in
2023
* Attendance in % during the term of office of a Committee member.
Strategic Planning Committee
The Board of Directors of
Kazakhtelecom JSC established
the Strategic Planning
Committee by the decision
of the Board of Directors in
2010. The Strategic Planning
Committee is a consultative
and advisory body of the Board
of Directors and carries out
its activities in accordance
with the Regulations on the
Strategic Planning Committee
approved by the decision of
the Board of Directors on 19
November 2010.
Composition of the Strategic
Planning Committee of
the Board of Directors of
Kazakhtelecom JSC in 2023:
from 01 January to 19 July:
Dmitry Zaika (Chairman
of the Committee), Alexey
Buyanov, Armanbay Jubaev,
as well as non-voting experts
Timur Sharipov and Almagul
Mukanova.
from 21 July:
Artur Neupokoyev (Chairman
of the Committee), Asset
Abdualiyev, Dmitry Zaika,
and non-voting experts
Timur Sharipov and Almagul
Mukanova.
The Chairman of the Committee
invited to the meetings as
observers, speakers and to
provide information on agenda
items:
- members of the
Management Board;
- top management and other
employees of the Company
and its subsidiaries;
- Samruk-Kazyna JSC
representatives
The Strategic Planning
Committee shall hold meetings
according to the annual plan
approved by a decision of
the Committee, but at least
once a quarter, extraordinary
meetings - as required.
In 2023, the Strategic Planning
Committee held 7 in-person
meetings, considered 11 issues
and made recommendations
to the Company’s Board of
Directors. These are issues of
strategy, business planning,
strategic projects, the
Company’s Development Plan
and other important issues
of the Company’s activities.
The Committee worked in
accordance with the 2023 Work
Plan.
Attendance of Strategic Planning Committee meetings in 2023
* Attendance in % during the term of office of a Committee member
Remuneration of the
Board of Directors
GRI 2-19, 2-21
The General Shareholders
Meeting of Kazakhtelecom JSC
of 12 August 2021 decided to
pay the independent director a
fixed annual fee and additional
fee for membership/presidency
in committees of the Board of
Directors:
- for non-residents of the
Republic of Kazakhstan -
fixed annual remuneration
amounting to USD 45,000
(forty-five thousand) and
additional remuneration
for membership/chairing of
committees of the Board of
Directors of the Company
amounting to USD 11,000
(eleven thousand) after taxes and other compulsory
contributions in accordance
with the legislation of the
Republic of Kazakhstan;
- for residents of the Republic
of Kazakhstan - fixed
annual remuneration
amounting to KZT
16,650,000 (sixteen million
six hundred fifty thousand)
and additional remuneration
for membership/chairing of
Committees of the Board of
Directors of the Company
amounting to KZT 4,000,000
(four million) after taxes
and other compulsory
contributions in accordance
with the legislation of the
Republic of Kazakhstan.
In accordance with the decision
of the Kazakhtelecom JSC
General Shareholders Meeting
dated 12 August 2021, the
amount of the fixed annual
remuneration to the Chairman
of the Board of Directors
of the Company makes up
KZT 16,000,000 (sixteen million) after taxes and other
compulsory contributions in
accordance with the laws of the
Republic of Kazakhstan.
The total remuneration paid to
the resident members of the
Board of Directors in 2023 made
KZT 57,356,111.65. The total
remuneration paid to nonresident
members of the Board
of Directors in 2023 amounted
to USD 56,148.87. The total
aggregate remuneration paid to
the members of the Company’s
Board of Directors for 2023
makes up KZT 82,631,922.24.
In accordance with the
Regulations on the Board
of Directors, if the powers
of an Independent Director
(including early termination)
are terminated before the end
of the six-month period, the
Independent Director shall
be paid remuneration and
compensation for the period of
actual membership on the Board
of Directors.
In accordance with the
Regulations on the Board of
Directors and the Policy of
remuneration of independent
members of the Board of
Directors of Kazakhtelecom JSC,
the Independent Director may
be paid additional remuneration
based on the results of the
year by the decision of the
General Shareholders Meeting of
Kazakhtelecom JSC.
Corporate
Secretary
The Corporate Secretary shall
report to the Board of Directors
and shall act in accordance
with the provisions of the laws
of the Republic of Kazakhstan,
the Charter, the Corporate
Governance Code, other internal
documents, as well as decisions
of the General Shareholders
Meeting and the Board of
Directors.
Within the framework of
its activities, the Corporate
Secretary controls preparation
and holding of General
Shareholders’ Meetings and
meetings of the Board of
Directors, organises office
work and ensures document
management of the Board of
Directors, ensures convocation
of meetings of the Board of
Directors and keeps minutes
of such meetings, provides
members of the Board of
Directors with necessary
information.
The Corporate Secretary of
Kazakhtelecom JSC Bulat
Abdykalykov holds state
awards and a sectoral title
of Үздік байланысшы (Best
Communicator). He was
recognised as one of the
best corporate secretaries
of the Samruk-Kazyna Group
of Companies, a permanent
participant in various measures
to further improve corporate
governance and the institute
of corporate secretaries. He
is an Honourable Member of
the Central Asian Association
of Corporate Secretaries. The
Chairman of the 2023 Corporate
Secretary competition jury.
The Regulations on the
Corporate Secretary are available
on the Company’s corporate
Internet resource in the
Corporate Governance section.
