Nominating/Corporate Governance Committee
U.S. companies listed on the NYSE are required to have a nominating/corporate governance committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. We do not have a nominating/corporate governance committee. We are not required under the Brazilian Corporate Law to have, and currently we do not have, a nominating and a corporate governance committee.
NYSE listing standards require U.S. companies to have a compensation committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. We do not have a compensation committee and, in our case, our directors, pursuant to our By-laws, are elected by our shareholders at a general shareholders meeting which also sets their global compensation, which is based on criteria established by our board of directors.
Fiscal Committee and Audit Committee
Under Brazilian Corporate Law, shareholders may request the appointment of a Fiscal Committee, a corporate body independent of management and our external auditors. The primary responsibility of the Fiscal Committee is to review management´s activities and the financial statements, and report its findings to the shareholders. The shareholders did not install a Fiscal Committee at the General Shareholders Meeting held in April 2006.
Pursuant to NYSE listing standards, a listed company must have an audit committee composed of a minimum of three independent directors that satisfy the independence requirements of Rule 10A-3 under the Exchange Act, with a written charter that covers certain minimum specified duties. We believe our audit committee members to be independent. We installed the Audit Committee in June 2005.
The Audit Committee is responsible for recommending the appointment of the independent auditors to the Board of Directors; reporting on the policies and our annual auditing plan submitted by the employee responsible for internal auditing and, on its execution, monitoring and evaluating the results and activities of the external auditors, and identifying, prioritizing, and submitting actions to be implemented by the executive officers; and analyzing the annual report, as well as our financial statements and making recommendations to the Board of Directors.
The Audit Committee is currently composed of Messrs. Perrone, Carneiro Netto and Nakano.
Other than the common shares that Mr. Steinbruch may be deemed to own as a result of his interests in Vicunha Siderurgia, our directors and officers as a group own less than 1% of our outstanding common shares.