Comparison of Vale corporate governance practices with NYSE by liaoqinmei

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									 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.

								
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