2006 20-F - Sappi

Corporate Governance
The New York Stock Exchange (NYSE) requires compliance with its corporate governance rules. The
application of these NYSE rules is restricted for foreign companies, recognizing that such companies have
to comply with domestic requirements. As a foreign private issuer, Sappi must comply with four NYSE
corporate governance rules:
• Satisfy the audit committee requirements of the Securities and Exchange Commission (SEC);
• Chief Executive Officer must promptly notify the NYSE in writing after any executive officer of the
listed company becomes aware of any material non-compliance with any applicable provisions of
Section 303(A) of the Sarbanes-Oxley Act of 2002;
• Provide a brief description of any significant difference between its corporate governance practices
and those followed by US companies under the NYSE listing standards, and
• Maintain a publicly accessible website that includes a printable version of its audit committee
charter and the description of significant differences in corporate governance practices mentioned
above. In accordance with new NYSE rules, Sappi continues to make available on its website its
Annual Reports on Form 20-F.
As Sappi is listed on the JSE Limited in Johannesburg, Sappi is required to comply with the King
Report on Corporate Governance for South Africa—2002. Although there are differences between the
King Report and the NYSE corporate governance rules, Sappi believes it is in compliance with the King
Report and has otherwise voluntarily adopted corporate governance practices comparable in all significant
respects to the requirements of the NYSE corporate governance rules except as described below.
New York Stock Exchange (NYSE)
Corporate Governance Rules Sappi’s Governance Practice
1. Nominations / Corporate Governance Committee
Listed companies must have a
nomination/corporate governance committee
composed entirely of independent directors
Employees
97
Sappi has a nominations committee composed of
four non-executive directors, of whom three are
independent.
The following table sets forth the number of employees as at the close of each fiscal year ended
September.
2006 2005
Sappi Fine Paper
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,630 2,781
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,163 5.437
Southern Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,910 1,879
Sappi Forest Products......................................................... 5,251 5,254
Sappi Trading................................................................ 154 162
Corporate Office.............................................................. 91 105
Total ........................................................................ 15,199 15,618
North America
At the end of September 2006, Sappi Fine Paper North America had 2,630 employees, down from
2,781 in September 2005. The headcount reductions during fiscal 2006 are the result of closing out the