Untitled - PRIME Gold

38 2005 NORILSK NICKEL • ANNUAL REPORT •NORILSK NICKEL • ANNUAL REPORT •200539Transitional structureTarget structure8MMC NORILSK NICKEL NOT INCLUDINGGOLD MINING ASSETS (POLUS)By having addressed the tasks of the first stage, the Groupstreamlined the asset structure and redistributed the authoritiesand responsibility in accordance with the specific performanceresults. Moreover, the Group has completed theformation of the Corporate Center for MMC Norilsk Nickel,which is responsible for the development and control overthe operation of the Group's industry streams.Thus, the first results of the reform demonstrated that thetransition to the industry-based management significantlyreduces the burden on senior management and the CorporateCenter in terms of the need to address day-to-day tasks. Thisenabled senior management and the Corporate Center tofocus more on the global, strategic and long-term tasks.Since 2006, the Group starts the second stage of the managementsystem reform. On the basis of the directorates createdat the previous stage – industry stream prototypes –industry branches will be created having significant authoritiesas independent business entities. The Corporate center willbe in charge of management and control of the branches,doing this through the new system of industry performanceindicators and inter-industry balancing system based on thecorporate inter-industry balance sheet.At the third stage of the reform (2007–2010) the industrystreams will receive maximum mid-term planning and operatingindependence with the full operating cycle and responsibilityfor the economic and production performance. As fullfledgedmanagement structures are formed, new independentlegal entities will be created on the basis of the property ofthe streams, which will effect the unbundling of the business.The reform will result in enhanced management efficiencydue to the use of the experience accumulated by unit managers,possibility to evaluate and decide on the best optionsof capital investment in diverse assets evaluated along a unifiedsystem of Key Performance Indicators (KPIs).