Get documents about "Comparison of Vale corporate governance practices with NYSE
Shared by: liaoqinmei
-
Stats
- views:
- 3
- posted:
- 10/9/2011
- language:
- English
- pages:
- 5
Document Sample
Comparison of Vale’s corporate governance practices with NYSE corporate governance
requirements applicable to U.S. companies
Under the rules of the New York Stock Exchange (“NYSE”), foreign private issuers are subject to a more
limited set of corporate governance requirements than U.S. domestic issuers. As a foreign private issuer,
Companhia Vale do Rio Doce (“Vale”) must comply with four principal NYSE corporate governance rules: (1)
Vale must satisfy the requirements of Exchange Act Rule 10A-3; (2) Vale’s Chief Executive Officer must promptly
notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with the
applicable NYSE corporate governance rules; (3) Vale must provide the NYSE with annual and interim written
affirmations as required under the NYSE corporate governance rules; and (4) Vale must provide a brief description
of any significant differences between its corporate governance practices and those followed by U.S. companies
under NYSE listing standards. The table below briefly describes the significant differences between Vale’s
domestic practice and the NYSE corporate governance rules.
NYSE Corporate Governance Rule for
Section U.S. Domestic Issuers Vale’s Approach
303A.01 A listed company must have a majority of Vale is a controlled company because more
independent directors. than a majority of its voting power is
controlled by Valepar S.A. (“Valepar”). As a
“Controlled companies” are not required to
controlled company, Vale would not be
comply with this requirement.
required to comply with the majority of
independent directors requirement if it were a
U.S. domestic issuer. There is no legal
provision or policy that requires Vale to have
independent directors.
303A.03 The non-management directors of a listed The non-management directors of Vale do not
company must meet at regularly scheduled meet at regularly scheduled executive sessions
executive sessions without management. without management.
303A.04 A listed company must have a Vale does not have a nominating committee.
Nominating/Corporate Governance All but two of the members of the board of
Committee composed entirely of independent directors are nominated by Valepar. As a
directors, with a written charter that covers controlled company, Vale would not be
certain minimum specified duties. required to comply with the
nominating/corporate governance committee
“Controlled companies” are not required to
requirements if it were a U.S. domestic issuer.
comply with this requirement.
However, Vale does have a Governance and
Sustainability Committee, which is an advisory
committee to the board of directors. It has
three members, two of whom are directors.
According to its charter, this committee is
responsible for:
• evaluating and recommending
NYSE Corporate Governance Rule for
Section U.S. Domestic Issuers Vale’s Approach
improvements to the effectiveness of
Vale’s corporate governance practices and
the functioning of the board of directors;
• recommending improvements to Vale’s
code of ethical conduct and Vale’s
management system in order to avoid
conflicts of interest between the company
and its shareholders or management;
• issuing reports on potential conflicts of
interest between Vale and its shareholders
or management; and
• reporting on policies relating to corporate
responsibility, such as environmental and
social responsibility.
Moreover, the committee’s charter requires at
least one of its members to be independent.
For this purpose, an independent member is a
person who:
• does not have any current relationship with
Vale other than being part of a committee,
or being a shareholder of the Company;
• does not participate, directly or indirectly,
in the sales efforts or provision of services
by Vale;
• is not a representative of the controlling
shareholders;
• has not been an employee of the controlling
shareholder or of entities affiliated with a
controlling shareholder;
• has not been an executive officer of the
controlling shareholder.
303A.05 A listed company must have a compensation As a controlled company, Vale would not be
committee composed entirely of independent required to comply with the compensation
directors, with a written charter that covers committee requirements if it were a U.S.
certain minimum specified duties. domestic issuer.
“Controlled companies” are not required to However, Vale has an Executive Development
comply with this requirement. Committee, which is an advisory committee to
the board of directors. This committee has
three members, all of whom are directors.
According to its charter, at least one of its
members is required to be independent (as
defined above). This committee is responsible
for:
• reporting on general human resources
policies;
• analyzing and reporting on the adequacy of
compensation levels for Vale’s executive
officers;
• proposing and updating guidelines for
evaluating the performance of Vale’s
NYSE Corporate Governance Rule for
Section U.S. Domestic Issuers Vale’s Approach
executive officers; and
• reporting on policies relating to health and
safety.
NYSE Corporate Governance Rule for
Section U.S. Domestic Issuers Vale’s Approach
303A.06 A listed company must have an audit In lieu of appointing an audit committee
committee with a minimum of three composed of independent members of the
303A.07
independent directors who satisfy the board of directors, Vale has established a
independence requirements of Rule 10A-3 permanent conselho fiscal, or fiscal council, in
under the Exchange Act, with a written accordance with the applicable provisions of
charter that covers certain minimum the Brazilian Corporation Law, and provided
specified duties. the fiscal council with additional powers to
permit it to meet the requirements of Exchange
Act Rule 10A-3(c)(3).
The fiscal council currently has four members.
Under the Brazilian Corporation Law, which
provides standards for the independence of the
fiscal council from Vale and its management,
none of the members of the fiscal council may
be a member of the board of directors or an
executive officer. Management does not elect
any fiscal council member. One of the
members of our fiscal council meets the New
York Stock Exchange independence
requirements that would apply to audit
committee members in the absence of our
reliance on Exchange Act Rule 10A-3(c)(3).
The responsibilities of the fiscal council are set
forth in its charter. Vale’s bylaws require the
charter to give the fiscal council, at a
minimum, responsibility for the matters
required under the Brazilian Corporation Law,
as well as responsibility for:
• establishing procedures for the
receipt, retention and treatment of
complaints related to accounting,
controls and audit issues, as well as
procedures for the confidential,
anonymous submission of concerns
regarding such matters;
• recommending and assisting the
board of directors in the appointment,
establishment of compensation and
dismissal of independent auditors;
• pre-approving services to be rendered
by the independent auditors;
• overseeing the work performed by the
independent auditors, with powers to
suspend the payment of compensation
to the independent auditors; and
• resolving disagreements between
management and the independent
auditors regarding financial reporting.
303A.08 Shareholders must be given the opportunity Under the Brazilian Corporation Law,
to vote on all equity-compensation plans and shareholder pre-approval is required for the
material revisions thereto, with limited adoption of any equity compensation plans.
exemptions set forth in the NYSE rules.
NYSE Corporate Governance Rule for
Section U.S. Domestic Issuers Vale’s Approach
303A.09 A listed company must adopt and disclose Vale does not have formal corporate
corporate governance guidelines that cover governance guidelines that address all of the
certain minimum specified subjects. matters specified in the NYSE rules.
303A.10 A listed company must adopt and disclose a Vale has adopted a formal code of ethical
code of business conduct and ethics for conduct, which applies to its directors, officers
directors, officers and employees, and and employees.
promptly disclose any waivers of the code for
Vale reports each year under Item 16B of its
directors or executive officers.
annual report on Form 20-F any waivers of the
code of ethical conduct granted for directors
and executive officers. Vale’s code of ethical
conduct has a scope that is similar, but not
identical, to that required for a U.S. domestic
company under the NYSE rules.
Vale also has a code of ethics that applies
specifically to employees in the corporate
finance, investor relations and accounting
departments.
303A.12 Each listed company CEO must certify to the Vale’s CEO will promptly notify the NYSE in
NYSE each year that he or she is not aware writing if any executive officer of Vale
of any violation by the company of NYSE becomes aware of any material non-
corporate governance listing standards. compliance with any applicable provisions of
the NYSE corporate governance rules.
