OREANDA-NEWS. On 4 February 2008 Standard & Poor’s issued its annual update of the Corporate Governance Score (CGS) for MDM Bank, confirming the Bank’s score of CGS-6+.  The Bank’s score on the Russian national scale was also unchanged at 6.7.  MDM Bank remains the only Russian financial institution to receive a Corporate Governance Score from the Standard & Poor’s rating agency, and shares second place with two other large Russian corporates.

Although MDM Bank is a privately held financial institution, the S&P analysis approaches the Bank’s corporate governance practices as if it were about to be publicly traded and widely held.  In this year’s review, the agency noted, “several important improvements, particularly in the area of internal audit, and social and environmental performance.”

Standard & Poor’s also highlighted the following strengths in corporate governance at MDM Bank:

The positive role of the majority shareholder, who is not exposed to significant conflicts of interest and promotes strong governance standards at the Bank. A board process mediates the shareholder’s influence.

The positive influence of the Bank’s strategic minority shareholders, which represent an important source of expertise for the Bank. They also effectively balance the influence of the majority owner.

A strong Board composition. Each of the three minority shareholders has a representative on the seven-seat Board, and three seats belong to independent directors. There is a strong skill mix and an independent, prominent finance professional chairs the Board.

High level of transparency and a strong audit process. The Bank pursues active investor relations policies.

A strong executive compensation plan, in which key performance indicators are based on targets defined in the strategy.

Oleg Vyugin, Chairman of the MDM Bank Board of Directors, commented: “Corporate governance has long been a high priority for the Board and the management of MDM Bank, and I am pleased that we remain rated among the top companies in Russia.  By institutionalizing strong corporate governance practices, MDM Bank is ensuring the sustainability of the value it creates for all its stakeholders.”