Vladimir Zaluzhsky, head of IR at Russian mining and steel company Severstal, began his role with a number of aims. He tells Andrew Holt about his successes and future challenges
Celebrating Severstal’s tenth anniversary London Stock Exchange listing last week, the head of communications and IR at the Russian steel and mining company, Vladimir Zaluzhsky had time to ponder his six years in the role.
He told IR in 2010 about his desire to make the company more proactive in investor communications. Has he been successful?
‘The company has taken IR seriously,’ he says citing his ideas that led to holding capital markets days, a roadshow for management, arranging meetings with the board and investors and establishing a roadshow for the Severstal management in the Nordic region for ESG investors. ‘I can further list a number of initiatives that were trailblazers for the Russian market,’ he adds.
These have not been the only IR-related projects he has been working on. A year ago, three departments in the organization: external communications, internal communications and investor relations were merged into one department, reaping real benefits. ‘We are now much faster, we have much better information flow because everyone is involved in all parts: investor relations, external communications and internal communications.’ Zaluzhsky now sits as the head of the new section as head of communications and IR.
New board members have helped shape the organization’s governance and management effectiveness. ‘In the two years since the arrival of new board members there has been upward revisions in the benchmarks across all areas we operate, including investor relations. We are now moving financial reports every quarter as the fastest steel company in Russia. We now want to be the fastest of all companies,’ he says.
Sakari Tamminen, Severstal senior independent director and chairman of the Remuneration and Nomination Committee, is one of the new board members. He says of his experience: ‘Since being involved, I have had the feeling that not only on governance, but all respects of the organization it is open and transparent and listens fully to the independent directors.’
Some parts of Russian business have proved eye-opening for Tamminen nevertheless. ‘Russian culture in regulating business is a little bit different,’ he says. ‘For example, you have to sign an approved minutes of the meeting three days after the meeting. And you have to have directors vote in every related transaction. So we have to vote in some detail.’
Looking forward, what for Zaluzhsky is the most challenging aspect from an IR perspective? ‘The most complicated thing now, and always will be, is the level of disclosure of commercial sensitive information, because it is a very competitive market. You cannot find a way to help investors understand a trend and not disclose a price.’
Zaluzhsky has also set himself challenges. ‘We still need be ahead of the competition [in IR]. Every year it is becoming tougher and tougher. We are approaching the disclosure [level] of international companies, but we still wish to be leaders in the Russian peer group. The difference between local and international regulation related to stock markets, disclosure, corporate governance, ESG policies: these will be the biggest issues and challenges for us as a Russian entity.’
In addition, there is also the on-going geopolitical risk associated with Russia. But Zaluzhsky puts this in a historical and relative context. ‘Russia is viewed as hostile. A few years ago at the time of the [Ukraine] invasion we had questions from all directions asking: how will it impact you? The market and investors wanted to know our view. We refrained from any political comment saying we are just a private business.
‘Then the questions ended up being about the health of the Russian economy. The oil price collapsed and that did impact on the business. So now the political questions have almost gone, because they [investors and the market] understand we are a private business. We just need to be perfect in everything we do, while being low cost and work well regardless of the market environment.’
