Annual Report 2010 - Magnitogorsk Iron & Steel Works

GENERALISTSBoard of DirectorsPositions on the Board of Directors are filled by candidates with broad knowledge required to take strategicdecisions, including decisions on environmental and social risks and opportunities.Information on the Board of DirectorsThe OJSC MMK’s Board of Directors consists of 10members, five of whom are independent.Victor F. Rashnikov is Chairman of the OJSC MMK’sBoard of Directors.No changes in the composition of the Board ofDirectors have been made during the accountingperiod (21.05.2010 – 01.04.2011).The Board of Directors has the overall responsibilityfor the management of the Company, with theexception of matters which are addressed at theGeneral Shareholders’ Meeting. The Board alsooversees the implementation of resolutions adoptedby the General Shareholders' Meeting or the Board ofDirectors.The responsibility of the Board of Directors isprovided for by the Company’s Charter which can befound on the MMK website at:http://www.mmk.ru/corporate_governance/internal_documents/index.php.Election of members of the Board of Directors:Members of the Company’s Board of Directors areelected by the General Shareholders’ Meeting bycumulative voting for a term until the followingAnnual General Shareholders' Meeting. The size of theBoard is determined by the Company’s Charter, andis currently 10 persons. Members of the Company’scollective executive body must not make up morethan one fourth of the Company’s Board of Directors.In line with the best Russian and internationalcorporate governance practices, independentdirectors have been elected to the Board of Directorsto enhance supervision, transparency and efficiencyof the Company's governing bodies' operation.Independent directors include Peter Charow, Sir DavidLogan, Andrey M. Gorodisskiy, Kirill Y. Liovin andZumrud Kh. Rustamova.Members of the Company’s Board of Directors aredeemed to be independent directors if they meet thefollowing requirements:• members who at the moment of election or for aterm of one year prior to it are not or have not beenofficers or employees of the Company;• members who are not officers of another companyin which any of the Company's officers is a memberof the committee of such company's board ofdirectors for nominations and remunerations;• members who are not spouses, parents, children,brothers or sisters of the Company's officers;• members who are not affiliated persons of theCompany other than members of the Company'sBoard of Directors;• members who are not parties to commitments withthe Company under which they can acquire propertyor receive monetary funds the value of whichamounts to 10 or more per cent of the aggregateannual income of such persons, with the exceptionof remuneration for participation in the activities ofthe Board of Directors.• members who are not representatives of the State,i.e. persons who represent the Russian Federationor its administrative subdivisions.To be nominated for election to the Board ofDirectors, a candidate must have knowledge sufficientfor making strategic decisions, including on issuesrelated to environmental and social risks andresponsibilities.Decision makingIn taking decisions at a meeting of the Company'sBoard of Directors, each Board member shall haveone vote. Voting at meetings of the Board of Directorswith respect to issues on the agenda for the meetingshall be open and by name.It is prohibited to transfer votes from members ofthe Board of Directors to other persons, includingother Board members. Decisions of the Board ofDirectors shall be taken by majority of the Boardmembers taking part in the meeting unless otherwiseprovided for by the Law "On Joint Stock Companies",the Company’s Charter and relevant Regulations. Indetermining the quorum and the results of votingon agenda items, the Board shall take into accountthe opinion of any Board member absent from themeeting, submitted in writing.Such a Board member shall submit his/her writtenopinion to the Chairman of the Board prior to theBoard meeting. The Board Chairman shall announcethe written opinion of such a Board member prior tovoting on each issue of the meeting's agenda. In casethe Board member, who submitted his/her opinionprior to the meeting, is present at the meeting, his/her written opinion shall be disregarded.EVENTS AFTER THE ACCOUNTING DATEIn keeping with the highest international standards, the Company is perfecting its corporate governance: MMK’sshareholders at their meeting on 20 May 2011 approved a new Board of Directors meeting the independencerequirements set out in the UK Corporate Governance Code. The new Board includes five directors meeting theindependence criteria, among them, the newly elected directors Bernard Sucher and David Herman.54