Corporate Governance

The Lietuvos Energija group, whose shareholder of which is the State of Lithuania, aims at ensuring the efficient and transparent operations. To achieve this, restructuring of governance was started, during which corporate group governance was rearranged and enhanced.
 
Most advanced international and national practice was applied, recommendations published by Organization for Economic Co-operation and Development were used, Corporate Governance Code of companies listed on NASDAQ OMX Vilnius Stock Exchange and governance guidelines recommended by the Baltic Institute of Corporate Governance for state-owned enterprises were taken into account in the preparation of the new Group governance structure and model. The corporate governance model of energy group was implemented following the governance guidelines approved by the Ministry of Finance of the Republic of Lithuania on 7 June 2013.

Principles of corporate governance of the Group

  • Prerequisites for efficient corporate governance. The environment in which the Group of companies or individual companies operate promotes transparent activities in the market, compliance with legal acts, and ensures the separation of management, supervisory and regulatory functions.
  • Exercise of rights of shareholders granted by their shares. Opportunities to exercise both property and non-property rights arising out of the control of shares are ensured simultaneously ensuring interests of minority shareholders.
  • Role of stakeholders. Expectations and rights of stakeholders deriving from agreements or legal regulation are recognized and the active cooperation in the creation of sustainable value added is encouraged.
  • Openness and transparency. Ensurance of timely and accurate disclosure of information about the Group.
  • Responsibility and accountability of management and supervisory bodies. Ensuring that management and supervisory bodies of the Group and individual companies carry out their functions adequately and are accountable to shareholders.
The  principles and model of corporate governance are focused on the assessment of stakeholder expectations and mutual alignment as well as the conversion thereof into measurable targets and indicators.   

System of governance and control

The main implementation and support tool of corporate governance of Lietuvos Energija Group is an integrated management and control system, the aim of which is to ensure a timely and efficient achievement of goals and their compliance with expectations of stakeholders.
 
This system includes all key operational elements: from cyclical business planning by setting performance targets, execution of operations until the achievement of targets and evaluation of achieved performance results, and ensures that the process is continuous and results of the end of one cycle become starting data of another cycle. This is a prerequisite for the implementation of constant improvement principles.
 
There are four groups of processes distinguished in the group management and control system model: governance (planning, strategic decision-making), operational support (human resources management, communication, procurement, etc.), core activity (production, services, trade, etc.) and operational assessment and improvement (monitoring, prevention, risk management).
 
Governance, operational support, assessment and improvement processes in each Group company are essentially the same and directed towards efficient implementation, governance, support, assessment and improvement of core activities of those companies.
 
Thus the main purpose of corporate governance is the improvement of these common processes throughout the entire Lietuvos Energija Group through the centralization, coordination and standardization thereof as well as sharing of experiences and good practice.
 
Corporate governance activities are focused in the parent company of the Group - Lietuvos Energija, UAB, which coordinates in the Group companies the areas of finance, law, planning and monitoring, human resources, risk management, audit, technology, communication and other common areas.
 
Activities of companies of the Group in these areas are based on mutual agreement - cooperation focusing on the pursuit of overall result, and is coordinated by policies - general provisions and norms applicable to all Group companies. 
 
Such a corporate governance model will help Lietuvos Energija Group implement its mission - to build sustainable value in the energy sector by promoting the development of the country’s economy and the society, and to achieve its goal - to double the value of the Group by 2020.