Sovcomflot chairman Sergey Frank zones in on five key tasks

Sovcomflot (SCF Group)’s Sergey Frank sees five aspects to his new role as non-executive chairman.

In first place is delivering on what he said is the “ambitious” 2019-2025 growth strategy for state-owned Sovcomflot and its 143 million quasi shareholders of the Russian population.

A second task for him and the board will be to look beyond this to the next stage of planning for the 2025-2030 and 2030-2035 strategy periods.

He said this is a far more challenging job than when the company started trying to “read the future” with its first plan in 2005 because of the fast-moving technological shifts and constraints within the industry.

“That will occupy a lot of my personal time to think about this future and give a chance for Igor [Tonkovidov] to concentrate on the efficiency, delivery and day-to-day operations,” he said.

Raising questions

“The chairman will concentrate more on the long-term strategy and maybe not sending instructions but rather asking the questions — for our shareholders, our customers and personnel.

“That’s a very interesting assignment and one I like very much.”

In his new position, Frank will also be looking at the company’s human capital and its leadership from 2030.

“We have a constellation of stars,” he said, referring to Sovcomflot’s current executive team.

“We need now to work even harder — to find, to recruit, to retain, to educate, to motivate. I will work very closely with the CEO on this issue.”

Frank said he will also have a deep involvement in the big transaction and partnerships that the company is contemplating for the future projects with its customers.

He said these need a great deal of preparatory work, diplomacy and negotiations, particularly given the calibre and size of this material.

“Sometimes we are talking about a wave of investment that is bigger than the current Sovcomflot,” he said.

Frank ducks out of directly referencing what this is. But the company’s involvement in the shipping arrangements for Novatek’s second liquefaction project, Arctic LNG 2, the raft of Arc7 LNG carriers that are to be built domestically to serve it, and the wave of other LNG developments for Russia's high north, are known to be occupying company minds.

However, he does highlight the creation of Smart, the Arctic shipowning and logistics partnership between Sovcomflot and Novatek that was registered as a company last week, plus other linkups between the Russian energy company and foreign shareholders. but, he said, these are a little premature to speak about.

To progress on these, he said Sovcomflot has decided to build a closer collaboration between the management and the board of directors so it can move in a more efficient and agile way.

Finally, Frank expects to be homing in on the role of the board, which he said for all companies is now more complex than simply providing fiduciary duty to shareholders.

“It is very often about the social purpose of the enterprise and its sustainability and various things which society expects from responsible corporations,” he said.

“I think the role of the board of directors must grow in that sense.”