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The board of directors has three committees, each with its own mission to support the board’s activities

Board committees

The board of directors has three committees: the audit committee; the appointments, remuneration and corporate governance committee; and the risk management committee.

All members of the audit and the appointments, remuneration and corporate governance committees are required to be independent. At least half of the directors on our risk management committee are required to be independent.

Board of directors and committee composition

Audit committee

Members

The members of the audit committee are: Narayanan Vaghul, Wilbur L Ross, Antoine Spillmann and Bruno Lafont, all of whom are independent under the company’s corporate governance guidelines, the New York Stock Exchange (NYSE) standards and the 10 Principles of Corporate Governance of the Luxembourg Stock Exchange. The chairman of the audit committee is Mr Vaghul.

Rules

The audit committee makes decisions by a simple majority with no member having a casting vote.

Mission

The primary function of the audit committee is to assist the board of directors in fulfilling its oversight responsibilities by reviewing:

  • the financial reports and other financial information provided by the company to any governmental body or the public;
  • the company’s system of internal control regarding finance, accounting, legal compliance and ethics that management and the board have established;
  • the company’s auditing, accounting and financial reporting processes generally.

It also examines the yearly, half-yearly and quarterly financial statements for the parent company and the group, and comments on accounting principles and rules and on the valuation rules used by the company when compiling these financial statements.

The committee’s primary duties and responsibilities are, without being exhaustive, to:

  1. Serve as an independent and objective party to monitor the company’s financial reporting process and internal control system.
  2. Review and appraise the audit efforts of the company’s independent accountants and internal auditing department.
  3. Provide an open avenue of communication among the independent accountants, financial and senior management, internal auditing department and board.
  4. Approve the appointment and fees of the independent auditors.
  5. Monitor the independence of the external auditors.

Operating procedures

The committee is composed of four independent directors, appointed directly by the board of directors. The committee’s meetings are convened by its chairman at least four times a year. It can also meet at the request of at least two of its members.

As part of its role to foster open communication, the committee meets at least annually with management, the head of the internal audit department and the company’s independent accountants in separate executive sessions to discuss any matters that the committee or each of these persons believe should be discussed privately.

Appointments, remuneration and corporate governance committee

Members

The appointments, remuneration and corporate governance committee comprises four directors, all of whom are independent, as were all directors in the two predecessor committees. The members are appointed by the board of directors.

The current members of the appointments, remuneration and corporate governance committee are: Lewis Kaden, HRH Prince Guillaume de Luxembourg, Narayanan Vaghul and Suzanne Nimocks, all of whom are independent under the company’s corporate governance guidelines, the NYSE standards and the 10 Principles of Corporate Governance of the Luxembourg Stock Exchange. The chairman of the appointments, remuneration and corporate governance committee is Mr Kaden, who is also the board’s lead independent director.

Rules

The appointments, remuneration and corporate governance committee makes decisions by a simple majority with no member having a casting vote.

Mission

The primary function of the appointments, remuneration and corporate governance committee is to assist the board of directors and, in particular, without being exhaustive:

  1. Review and approve corporate goals and objectives relevant to the Group Management Board and senior management’s compensation, and evaluate performance in light of these goals;
  2. Make recommendations to the board with respect to incentive compensation plans and equity-based plans;
  3. Identify candidates qualified to serve as members of the board and the Group Management Board;
  4. Recommend candidates to the board for appointment by the general meeting of shareholders or for appointment by the board to fulfil interim vacancies at the board;
  5. Develop, monitor and review corporate governance principles applicable to the company;
  6. Facilitate the evaluation of the board;
  7. Review the succession planning and the executive development programme for the members of the Group Management Board;
  8. Submit proposals to the board on the remuneration of group management board members, and on the appointment of new directors and Group Management Board members;
  9. Make recommendations to the board on the company’s framework of remuneration for the Group Management Board and such other members of the executive management as designated by the committee to consider. In making such recommendations, the committee may take into account factors that it deems necessary (the remuneration of directors on the board shall be a matter to be decided by the board). This may include cost (including equity/stock options based component) and determination on behalf of the board specific remuneration packages and conditions of employment (including pension rights);

Operating procedures

Without being exhaustive, the committee functions based on the following rules:

It is composed of four members appointed by the board. Its members have relevant expertise or experience relating to the purposes of the committee. The chairman of the committee makes a verbal report of the committee’s decisions and findings to the board after each committee meeting.

Risk management committee

Purpose and scope

As part of its commitment to sound corporate governance, ArcelorMittal has set up a process of risk identification and management. These risks include but are not limited to financial, legal and operational risk and risks concerning ArcelorMittal’s reputation and ethical standards.

The board of directors of ArcelorMittal has created the board risk management committee to assist it with the identification and management of risks to which the ArcelorMittal group is exposed.

The Group Management Board of ArcelorMittal has established the group risk management committee (GMRC) at executive management level. The chairman of the GRMC is an invitee to the meetings of the risk management committee, established at the level of the board of directors, and in this capacity represents senior management at the committee’s meetings.

The purpose of the committee is to support the board of directors in fulfilling its corporate governance and oversight responsibilities by assisting with the monitoring and review of the risk management framework and process of the ArcelorMittal group.

The main responsibilities and duties of the committee are to assist the board of directors by developing recommendations regarding the following matters:

  • The oversight, development and implementation of a risk identification and management process and the review and reporting on the same in a consistent manner throughout the ArcelorMittal group;
  • The review of the effectiveness of the group-wide risk management framework, policies and process at corporate, segment and business unit levels, and the proposing of improvements, with the aim of ensuring that the group’s management is supported by an effective risk management system;
  • The promotion of constructive and open exchanges on risk identification and management among senior management (through the GRMC), the board of directors, the internal assurance department, the legal department and other relevant departments within the ArcelorMittal group;
  • The review of proposals for assessing, defining and reviewing the risk appetite/tolerance level of the group and ensuring that appropriate risk limits/tolerance levels are in place, with the aim of helping to define the group’s risk management strategy;

Composition

The committee is composed of at least two members of the board of directors. At least half of the members of the committee must be independent under the New York Stock Exchange (NYSE) Listed Company Manual and the 10 Principles of Corporate Governance of the Luxembourg Stock Exchange.

The members of the committee may decide to appoint a chairman by majority vote. The chairman of the GRMC is an invitee to the committee and, in addition, the committee may invite any other member of the GRMC or any other expert from within the ArcelorMittal group to participate in a meeting of the committee. The committee may also seek the advice of outside experts.

Committee members are required to have a working familiarity with the fundamentals of finance, accounting and risk management. It is appropriate for committee members to have a different range of backgrounds, skills and experiences due to the strategic, business, operational, financial and non-financial risk profiles of the ArcelorMittal group.

The current members of the committee are Antoine Spillmann, who is the chairman of the committee and qualifies as independent under the New York Stock Exchange standards and the 10 Principles of Corporate Governance of the Luxembourg Stock Exchange; Mrs Suzanne Nimocks and Mr. Tye Burt, who also qualify as independent under the same rules; and Mr Jeannot Krecké, who is a non-independent member.

Meetings

The committee will be validly constituted if at least a majority of its members are present or participating. If at any time the committee is composed of two members only, the presence or participation of the two members is required to have a quorum. Decisions and recommendations will be adopted by a simple majority. In case of deadlock, any committee member may bring the matter before the board of directors.

The committee meets at least four times a year on a quarterly basis or more frequently as circumstances may require. The chairman of the committee or, in the absence of a chairman, any other member of the committee, will report to the board of directors at each of the latter’s quarterly meetings or more frequently if circumstances require.

The committee conducts an annual self-evaluation of its own performance, its interaction with the GMRC and the board of directors, and its effectiveness and compliance with its charter.