Report on the Brazilian Code of Corporate Governance - Publicly Held Corporations ("Code") of Vale S.A.
Base date for the information: 07/30/2021 | ||||||||||||
Principle | Best Practices | Adopted? | Explanation | |||||||||
1. Shareholders | ||||||||||||
1.1 Shareholding Structure | 1.1.1 | "the | company's | Yes | Completion is not applicable under the terms of the Empresas.Net System. | |||||||
capital | stock | shall | be | |||||||||
composed | solely | of | ||||||||||
common shares" | ||||||||||||
1.2 Shareholders' Agreement | 1.2.1 | "Shareholders' | Not applicable | Vale has no Shareholders' Agreement in force. | ||||||||
Agreement shall not bind | ||||||||||||
the | exercise | of | voting | |||||||||
rights of any director or | ||||||||||||
member | of | the | ||||||||||
supervisory | and | control | ||||||||||
bodies". | ||||||||||||
1.3 Shareholders' Meeting | 1.3.1 | "The | board | should | Yes | Completion is not applicable under the terms of the Empresas.Net System. | ||||||
use the meeting to report | ||||||||||||
the | conduct | of | the | |||||||||
company's | business, | so | ||||||||||
the management | should | |||||||||||
publish | a | guide | to | |||||||||
facilitate | and | encourage | ||||||||||
participation | in | general | ||||||||||
meetings". | ||||||||||||
1.3.2 | "The | minutes | shall | Yes | Completion is not applicable under the terms of the Empresas.Net System. | |||||||
enable | the | full | ||||||||||
understanding | of | the | ||||||||||
discussions | held | at | the | |||||||||
meeting, even if taken in | ||||||||||||
the form of a summary of | ||||||||||||
events | occurred | and | ||||||||||
contain | the | identification | ||||||||||
of the votes cast by the | ||||||||||||
shareholders". | ||||||||||||
1.4 Defensive measures | 1.4.1 | "the | board | of | No | The defensive measures and, above all, of its activation triggers were analyzed within the overall scope of | ||||||
directors | shall | make | a | the corporate reorganization held in 2017, which took the Company to the Novo Mercado, so that the | ||||||||
critical | analysis | of | the | Bylaws currently in force provide that any person, shareholder or group of shareholders, who acquires or | ||||||||
advantages | and | becomes, or has become the holder, for any reason, of shares issued by the Company in a number equal | ||||||||||
disadvantages | of | the | to or greater than 25% of the total common shares issued by Vale or the total capital stock, excluding | |||||||||
defensive | measure | and | treasury shares, shall, within a maximum period of 30 days from the date of acquisition or the event that | |||||||||
their | characteristics, | and | resulted in the ownership of shares in a number equal to or greater than the limit stipulated above, make | |||||||||
especially of the activation | or request registration of, as the case may be, a tender offer for acquisition ("OPA") of all common shares | |||||||||||
triggers | and | price | issued by the Company, observing the provisions of the applicable CVM regulations, the B3 regulations and | |||||||||
parameters, if applicable, | the terms of Article 46 of the Company's Bylaws, and the exceptions expressly provided for in the Bylaws. | |||||||||||
explaining them." | ||||||||||||
It should be clarified that the 25% trigger is in line with the practices observed in the Brazilian stock market, | ||||||||||||
also respecting the scope and purpose of the corporate restructuring operation concluded in August 2017. | ||||||||||||
Within this context, the Company's shareholders and the Board of Directors understood that a limit of 25% | ||||||||||||
was suitable to make the OPA mandatory and then approved its inclusion in the Company's Bylaws. |
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Report on the Brazilian Code of Corporate Governance - Publicly Held Corporations ("Code") of Vale S.A.
Base date for the information: 07/30/2021 | ||||||||||
1.4.2 Clauses that prevent | Yes | Completion is not applicable under the terms of the Empresas.Net System. | ||||||||
the | removal | of | the | |||||||
measure from the bylaws, | ||||||||||
the so-called "entrenched | ||||||||||
clauses", | shall not | be | ||||||||
used. | ||||||||||
1.4.3 | "If | the | bylaws | set | Yes | As provided in Article 46 of the Company's Bylaws, the minimum acquisition price in the OPA for each | ||||
forth that a tender offer | common share issued by the Company shall be equal to the higher of ("Minimum Acquisition Price"): (i) | |||||||||
for | the | acquisition | of | the economic value determined in the appraisal report; (ii) 120% of the weighted average unit quotation | ||||||
shares | (OPA) | is | made | of the common shares issued by the Company during the 60 trading days prior to the OPA; and (iii) 120% | ||||||
whenever | a | shareholder | of the higher price paid by the acquiring shareholder in the 12 months preceding the achievement of | |||||||
or group | of | shareholders | significant shareholding. | |||||||
directly | or | indirectly | ||||||||
reaches | a | significant | There is, therefore, no premium accrual above the economic value, and the premium of 20% on market | |||||||
interest | in | the | voting | value does not represent a substantial accrual, considering that it is within market parameters, according | ||||||
capital, | the | rule | for | to analyzes performed by advisors under the corporate reorganization project that took place in 2017. | ||||||
determining | the | offer | ||||||||
price | shall | not | impose | Notwithstanding the aforementioned, should CVM regulations applicable to the OPA determine the adoption | ||||||
accrued | premiums | of a calculation criterion to determine the acquisition price of each company share in the OPA resulting in | ||||||||
substantially | above | the | an acquisition price higher than the Minimum Acquisition Price, the acquisition price calculated in | |||||||
economic or market value | accordance with CVM regulations shall prevail in executing the OPA. | |||||||||
of the shares". | ||||||||||
1.5 Change of control | 1.5.1 | The | Company's | Yes | Completion is not applicable under the terms of the Empresas.Net System. | |||||
bylaws | shall | establish | ||||||||
that: | (i) | transactions | ||||||||
which set the direct or | ||||||||||
indirect | disposal | of | ||||||||
controlling interest is to be | ||||||||||
accompanied by a tender | ||||||||||
offer | for | acquisition | of | |||||||
shares | (OPA) | addressed | ||||||||
to all shareholders at the | ||||||||||
same price and under the | ||||||||||
same conditions obtained | ||||||||||
by the selling shareholder; | ||||||||||
(ii) directors must express | ||||||||||
their views on the terms | ||||||||||
and | conditions | of | ||||||||
corporate reorganizations, | ||||||||||
capital | increases | and | ||||||||
other | transactions | that | ||||||||
give rise to a change of | ||||||||||
control, | and | determine | ||||||||
whether | they | ensure | fair | |||||||
and | equitable | treatment | ||||||||
for | the | company's | ||||||||
shareholders. |
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Report on the Brazilian Code of Corporate Governance - Publicly Held Corporations ("Code") of Vale S.A.
Base date for the information: 07/30/2021 | ||||||||||
1.6 Statement of the | 1.6.1 | The | bylaws | shall | Yes | Completion is not applicable under the terms of the Empresas.Net System. | ||||
management on the OPAs | provide for the board | of | ||||||||
directors | to | give | its | |||||||
opinion | regarding | any | ||||||||
OPA having as its subject | ||||||||||
matter shares or securities | ||||||||||
that | are | convertible | or | |||||||
interchangeable | into | |||||||||
shares | issued | by | the | |||||||
company, | which | shall | ||||||||
include, | among | other | ||||||||
relevant | information, | |||||||||
management's opinion on | ||||||||||
possible acceptance of the | ||||||||||
OPA and on the economic | ||||||||||
value of the company. | ||||||||||
1.7 Income Allocation Policy | 1.7.1 | The | company | shall | Yes | Completion is not applicable under the terms of the Empresas.Net System. | ||||
prepare | and | disclose | a | |||||||
policy | for | allocation | of | |||||||
results | defined | by | the | |||||||
board of directors. Among | ||||||||||
other aspects, such policy | ||||||||||
shall | provide | for | the | |||||||
periodicity | of | dividend | ||||||||
payments | and | the | ||||||||
benchmark to be used to | ||||||||||
define | the | respective | ||||||||
amount | (percentages | of | ||||||||
adjusted net income and | ||||||||||
free | cash | flow, | among | |||||||
others). | ||||||||||
1.8 Government- controlled | 1.8.1 | The | bylaws | shall | Not applicable | Completion is not applicable under the terms of the Empresas.Net System. | ||||
private companies | clearly | and | precisely | |||||||
identify the public interest | ||||||||||
that | justified | the | ||||||||
formation | of | a | ||||||||
government-controlled | ||||||||||
private | company, | in | a | |||||||
specific chapter. | ||||||||||
1.8.2 | The | board | of | Not applicable | Completion is not applicable under the terms of the Empresas.Net System. | |||||
directors shall monitor the | ||||||||||
company's | activities | and | ||||||||
establish | policies, | |||||||||
mechanisms and | internal | |||||||||
controls to determine the | ||||||||||
possible | costs | of | serving | |||||||
the public interest and any | ||||||||||
compensation | of | the |
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Report on the Brazilian Code of Corporate Governance - Publicly Held Corporations ("Code") of Vale S.A.
Base date for the information: 07/30/2021
company | or | other | |||||||
shareholders | and | ||||||||
investors | by | the | |||||||
controlling shareholder. | |||||||||
2. Board of Directors | |||||||||
2.1 Duties | 2.1.1 | The | Board | of | Yes | Item (i): The Board of Directors deliberates on the strategic guidelines and strategic plan of the company, | |||
Directors | shall, | without | considering people safety, the social progress and the respect for the environment, acting as guardian of | ||||||
prejudice | to | other | legal | the implementation of the approved strategy. In 2020, the Board of Directors met 4 times to address | |||||
and statutory duties | and | exclusively the Company's strategic plan, and in 2021 it already held 3 meetings to deal with this agenda. | |||||||
to other practices set forth | |||||||||
in this Code: (i) define | Item (ii): The Board of Directors deliberates on the Company's corporate and financial risk policies proposed | ||||||||
business strategies, taking | by the Board of Executive Officers, relying, on a permanent basis, on the Operational Excellence and Risk | ||||||||
into account | the impacts | Committee, the People, Compensation and Governance Committee ("CPRG"), the Financial Committee, the | |||||||
of the company's activities | Audit Committee, the Sustainability Committee, and the Innovation Committee to support it in assessing | ||||||||
on | society | and | the | the effectiveness of processes and controls of complex risks or which may have a significant impact on the | |||||
environment, | aiming | at | Company, with due regard for each Committee's area of activity. Besides this, the Company counts, for the | ||||||
the company's | continuity | purposes of verification and monitoring of Risk Management, on the five Business Risks Executive | |||||||
and the creation of long- | Committees, the Executive Board, the Fiscal Council and the structure of 3 lines of defense, the 1st | ||||||||
term | value; | (ii) | composed of the executors of the Company's operational and business processes, the 2nd composed of a | ||||||
periodically | assess | the | set of "Experts" Lines of Defense, which includes, among others, the Executive Board of Safety and | ||||||
company's | exposure | to | Operational Excellence, coordinated by the Executive Management of Process Governance, Business Risks | ||||||
risks and the effectiveness | and Internal Controls, and the 3rd line of defense composed of the Internal Audit and the Whistleblower | ||||||||
of | risk | management | Channel. | ||||||
systems, internal controls | |||||||||
and | the | The guidelines and instructions for the risk management strategy are set out in the Company's Risk | |||||||
compliance/integrity | Management Policy, reviewed by the Board of Directors on March 15th, 2021. The Board of Directors | ||||||||
system, and | approve a | periodically monitors, through Vale's Integrated Global Risk Map, the main risks of the Company, with this, | |||||||
risk | management | policy | Vale seeks to have a clear view of its main risks, working on them systematically through the adoption of | ||||||
consistent | with | business | prevention/mitigation measures. | ||||||
strategies (see chapter 4); | |||||||||
(iii) define the company's | Item (iii): The Board of Directors deliberates on policies of functional conduct based on ethical principles | ||||||||
ethical | values | and | embodied in the society's Code of Conduct, as well as acting as a guardian of commitments related to | ||||||
principles and ensure the | respect for human rights. In March 2021, new Ethics & Compliance Program was launched, under the | ||||||||
company's | transparency | responsibility of the Compliance Department. For further information about such Department and Program, | |||||||
in its relationship with all | see item 5.1 of this Report. | ||||||||
stakeholders (see chapter | |||||||||
5); (iv) annually review | Item (iv): The Board of Directors acts as the guardian of the corporate governance model and practices, | ||||||||
the corporate governance | and is advised by the CPRG, which, among other duties, conducts the annual review of Vale's corporate | ||||||||
system, | seeking | to | governance system. | ||||||
improve it. | |||||||||
2.2 Composition of the Board of | 2.2.1 | The | bylaws | shall | Yes | Completion is not applicable under the terms of the Empresas.Net System. | |||
Directors | establish | that: | (i) | the | |||||
board of directors shall be | |||||||||
composed of a majority of | |||||||||
external members, with at | |||||||||
least | one | third | of | ||||||
independent | members; | ||||||||
(ii) the board of directors |
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Report on the Brazilian Code of Corporate Governance - Publicly Held Corporations ("Code") of Vale S.A.
Base date for the information: 07/30/2021
shall | evaluate | and | |||||||
annually disclose who are | |||||||||
the independent directors, | |||||||||
as well as indicating and | |||||||||
justifying | any | ||||||||
circumstances | that | might | |||||||
compromise | their | ||||||||
independence. | |||||||||
2.2.2 | The | board | of | Yes | On July 22, 2020, Vale's Nomination Committee was created and installed, with the mission of advising the | ||||
directors shall approve an | Board of Directors proposing improvements related to its structure, size and composition, in addition to | ||||||||
appointment | policy | recommending | competencies, | profiles | and | ||||
establishing: | (i) | the | potential candidates for the position of Director, so that the Company can benefit from the plurality of | ||||||
process | for | the | arguments and a decision-making process with quality and safety, in accordance with the law, ethics and | ||||||
appointment of members | best corporate governance practices. | ||||||||
of the board of directors, | |||||||||
including an indication of | On September 10, 2020, on the recommendation of the People, Compensation and Governance Committee | ||||||||
the participation of other | and the Nomination Committee, the Board of Directors approved Vale's | Management Nomination Policy, | |||||||
corporate | bodies in | said | which establishes principles, criteria and procedures to guide the choice of candidates for the positions of | ||||||
process; | (ii) | that | the | members of the Board of Directors, of the Advisory Committees and the Executive Board, Directors with | |||||
board of directors shall be | direct reporting to the Chief Executive Officer and Vale's Chief Compliance Officer, in line with the best | ||||||||
composed | taking | into | corporate governance practices and applicable legislation. The Nomination Policy describes the minimum | ||||||
consideration | the | qualifications to occupy such positions, including: (i) outstanding professional experience; (ii) strategic | |||||||
availability of time for its | vision; (iii) availability of time for the proper exercise of the role; (iv) communication skills; and (v) the | ||||||||
members to perform their | ability to work as a team. | ||||||||
duties and the diversity of | |||||||||
knowledge, | experience, | The bylaws of the Nomination Committee and the full Policy can be found at | |||||||
behavior, cultural aspects, | http://www.vale.com/brasil/PT/investors/corporate-governance/board-committees- | ||||||||
age group and gender. | councils/Paginas/default.aspx | and | |||||||
http://www.vale.com/esg/pt/Paginas/PoliticasDocumentosCorporativos.aspx, respectively. |
2.3 Chairman of the board | 2.3.1 The chief executive | Yes | Completion is not applicable under the terms of the Empresas.Net System. | |||
officer | shall | not | ||||
accumulate the position of | ||||||
chairman of the board of | ||||||
directors. | ||||||
2.4 Evaluation of the board and | 2.4.1 | The company | shall | The Board of Directors carries out an annual performance appraisal, with the support of the Personnel, | ||
directors | implement | an | annual | Yes | Compensation and Governance Committee, which analyzes and recommends the evaluation methodology, | |
process for evaluating the | aiming at continuous improvements in the process. | |||||
performance of the board | ||||||
of | directors | and | its | The Advisory Committees (excluding the Nomination Committee) also carry out the annual performance | ||
committees, | such | as | self-assessment, the result of which must be submitted to the Board of Directors. | |||
collective | bodies, | the | ||||
chairman of the board of |
5
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Vale SA published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2021 00:51:04 UTC.