Sumário
Annual Report
2022 Sustainability
2022 Sustainability
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Sumário
The Board of Directors and the Statutory Executive Board, with the support of non-statutory executive officers, make up MRS corporate governance structure. For resolutions related to the areas, the Board of Directors is advised by financial, strategic, sustainability or audit committees, replacing the existence of statutory committees. It also receives support from the internal audit area, provided for in the Bylaws, which reports directly to the Chairman of the Board of Directors. The Company does not have a Fiscal Council in operation.
*Non-statutory bodies
**Statutory board, with a term of office exercised by the Chief Executive Officer
The Board of Directors, the highest MRS governance body, is responsible, among other duties, for the strategic direction of the Company, the decision on more significant investments, and business health and longevity, therefore performing the duties related to economic, environmental and social aspects. The Board of Directors also appoints the Company’s CEO and Executive Officers.
The Board of Directors’ compensation refers exclusively to travel costs, since its members also hold positions in the Company or in companies belonging to MRS’ controlling block and have their main compensation covered by these parent companies. The Board does not undergo a formal performance assessment, but an annual assessment of governance evolution is performed, allowing the continuous implementation of improvements.
In line with the Shareholders’ Agreement, the members of the Board of Directors are defined in a joint vote with the shareholders. According to MRS Bylaws, the Board of Directors comprises up to 17 members, with a two-year term of office, which begins with investiture by means of a document drawn up in the proper book, always ending simultaneously, even if some members have been elected after the others. All members remain in the exercise of their positions until the investiture of the newly-elected members and the reelection is permitted.
The Company have no formal policy for appointing directors. The majority of members of the Board of Directors are appointed pursuant to the rules provided for in the Shareholders’ Agreement. It is worth noting that shareholder’s nominations lead to a composition of the Board of Directors with professionals with diversified profiles, and the body currently comprises administrators, engineers, and economists. This background diversity enables the Company to benefit from the plurality of arguments and experiences and a decision-making process with quality and security.
The Board of Directors in office in 2022, with a mandate until 2023 Annual Shareholders’ Meeting, was composed of 10 members, 9 of whom were shareholder representatives and 1 employee representative, and 9 men and 1 woman. In 2022 term of office, the Board composition was as follows:
MRS Board of Directors
| Composition | Up to 17 members. On 12/31/2022, the Board was comprised by 10 members: 1) Luís Fernando B. Martinez (chairman); 2) Alejandro Daniel Laiño; 3) Carlos Hector Rezzonico; 4) Enéas G. Diniz; 5) Marcelo C. Ribeiro; 6) Marcelo L. Barros; 7) Sonia Zagury; 8) Viktor N. Moszkowicz; 9) Wendel G. da Silva; 10) William Ignácio Dias. |
|---|---|
| Term of office | Until 2023 ASM, with the possibility of renewing the mandate. |
| Meetings held in 2022 | 15 |
| Percentage of attendance | 92% |
| Total independent members in 2022 | 0 |
Age range
| Age group | Quantity | % |
|---|---|---|
| Under 30 years old | 0 | 0% |
| Between 30 and 50 years old | 4 | 40% |
| Over 50 years old | 6 | 60% |
Breakdown by gender
| Gender | Quantity | % |
|---|---|---|
| Women | 1 | 10% |
| Men | 9 | 90% |
Members
| Member | Position | Age | Gender | External | Independent | Election | 1st term |
|---|---|---|---|---|---|---|---|
| Luís FernandoB.Martinez | Chairman | 59 | M | Y | N | 04/29/2021 | 11/06/2014 |
| Alejandro Daniel Laiño | Director | 66 | M | Y | N | 04/29/2021 | 03/08/2013 |
| Carlos Hector Rezzonico | Director | 70 | M | Y | N | 04/29/2021 | 09/17/2018 |
| Enéas Garcia Diniz | Director | 62 | M | Y | N | 04/29/2021 | 07/24/2017 |
| Marcelo Cunha Ribeiro | Director | 45 | M | Y | N | 04/29/2021 | 04/29/2021 |
| Marcelo Leite Barros | Director | 54 | M | Y | N | 04/29/2021 | 09/12/2019 |
| Sônia Zagury | Director | 55 | W | Y | N | 04/29/2021 | 04/24/2017 |
| Viktor Nigri Moszkowicz | Director | 44 | M | Y | N | 04/29/2021 | 11/27/2020 |
| Wendel Gomes da Silva | Director | 48 | M | Y | N | 04/29/2021 | 04/29/2021 |
| William Ignácio Dias | Director | 44 | M | N | N | 04/29/2021 | 04/29/2021 |
The representatives of the Board of Directors have seats on the following Committees:
| Representative | Committee(s): | Shareholder(s) |
|---|---|---|
| Alejandro Daniel Laiño | Member of the Strategic Committee | Usiminas |
| Luis Fernando B. Martinez | Member of the Strategic Committee and the Sustainability Committee | CSN |
| Sônia Zagury | Member of the Finance Committee | Vale |
| Vitor Nigri Moszkowicz | Member of the Strategic Committee | Vale |
| Wendel Gomes da Silva | Member of the Strategic Committee | Gerdau |
Learn more on the profile of each member of the Board of Directors, accessing MRS IR website.
The Finance Committee reviews and establishes the policies to manage financial risks, contributing to lower the financial or economic impacts which may harm the Company’s results. Other duties of this Committee are the preparation and review of the Financial Risk Management Policy, submitted annually for approval to the Board of Directors, as well as the analysis of the annual funding and investment budget. The Committee also acts on demand in the analysis of the Company’s financial matters, such as, for example, the funding plan and plays an advisory and recommendation role. Approvals are ultimately made by the Board of Directors.
Composition
| Composition | Committee Coordinator – Director appointed by the Board of Directors. The Committee also includes the participation of executives from MRS financial department and technical advisors appointed by the shareholders. |
|---|---|
| Term of office | Until 2023 ASM, with the possibility of renewing the mandate. |
| Meetings held in 2022 | 12 |
| Percentage of attendance | 100% |
| Total independent members in 2022 | 0 |
Age group
| Age group | Quantity | % |
|---|---|---|
| Under 30 years old | 0 | 0% |
| Between 30 and 50 years old | 0 | 0% |
| Over 50 years old | 1 | 100% |
Breakdown by gender
| Gender | Quantity | % |
|---|---|---|
| Women | 1 | 100% |
| Men | 0 | 0% |
Responsible for reviewing strategic issues for MRS, the Strategic Committee follows a predefined schedule of meeting throughout the year, to review the issues that affect the company’s direction in the medium and long term. The Committee’s actions are of an advisory and recommendation nature; there is no delegation of approval, which is ultimately done by the Board of Directors. Among the topics analyzed on an annual basis by the Strategic Committee are: assessment of the Executive Board, corporate and Executive Board goals, budget guidelines, the Company’s business plan. The Strategic Committee has no formal internal regulation and may hold meeting on demand.
Composition
| Composition | 4 members |
|---|---|
| Term of office | Until 2023 ASM, with the possibility of renewing the mandate. |
| Meetings held in 2022 | 6 |
| Percentage of attendance | 90% |
| Total independent members in 2022 | 0 |
Age group
| Age group | Quantity | % |
|---|---|---|
| Under 30 years old | 0 | 0% |
| Between 30 and 50 years old | 2 | 50% |
| Over 50 years old | 2 | 50% |
Breakdown by gender
| Gender | Quantity | % |
|---|---|---|
| Women | 0 | 0% |
| Men | 4 | 100% |
MRS non-statutory Sustainability Committee has no internal regulation and addresses relevant issues in the area, such as: monitoring and approval of the Internal Audit; establishing and ensuring compliance with the rules and authority levels for the Company’s institutional relationship, avoiding loss of value due to the disclosure of inappropriate information; monitoring, assessment and approval of environmental and operational risk management. The Committee is comprised by the Chairman of the Board, together with members of the General Internal Audit and Risk Management, and in some specific meetings, the coordinator of the Audit Committee is present. In addition, Company executives may attend to meetings, upon demand. Temporary teams can be created according to the specific needs in the topic.
| Composition | 1 member |
|---|---|
| Term of office | Until 2023 ASM, with the possibility of renewing the mandate. |
| Meetings held in 2022 | 6 |
| Percentage of attendance | 100% |
| Total independent members in 2022 | 0 |
| Age group | Over 50 years old |
| Breakdown by gender | 100% men |
With the purpose of providing technical support to the Chairman of the Board of Directors in the analysis of issues related to risk management and internal audit, the Audit Committee is non-statutory. Among its duties are the assessment, guidance and recommendation for approval of the Annual Audit Plan, the Regulation of General Internal Audit and Risk Management, the corporate risk management process and the practice of Internal Audit (methodology, scope and structure).
Composition
| Composition | 4 members with expertise in the areas of auditing and risk management, appointed by the shareholders of the controlling block |
|---|---|
| Term of office | Until 2023 ASM, with the possibility of renewing the mandate. |
| Meetings held in 2022 | 5 |
| Percentage of attendance | 85% |
| Total independent members in 2022 | 0 |
Age group
| Age group | Quantity | % |
|---|---|---|
| Under 30 years old | 0 | 0% |
| Between 30 and 50 years old | 2 | 50% |
| Over 50 years old | 2 | 50% |
Breakdown by gender
| Gender | Quantity | % |
|---|---|---|
| Women | 0 | 0% |
| Men | 4 | 100% |
The Executive Board’s mission is to protect and enhance the Company’s assets and maximize long-term investment returns in line with the Board of Directors’ mission. It is the Company’s executive management body, and is responsible for proposing initiatives, business plans and policies to the Board of Directors, implementing the strategy defined by the Board and conducting the Company’s daily operations, responsibilities subject to the limits established in MRS Bylaws. The profile of the members of the Executive Board are available at Company Investor Relations website.
MRS adopts a fixed compensation policy, approved at a Prior Shareholders’ Meeting in 2012, with annual bonuses based on results linked to the achievement of pre-established goals. The policy is reviewed on an annual basis by the Strategic Committee, with a recommendation to the Board of Directors to make any necessary adjustments.
By setting the global compensation with a fixed amount plus a variable amount, MRS seeks to ensure competitiveness towards the market, fostering the achievement of short-term results and the alignment of the executive staff with the Company’s mid- and long-term goals. Compensation also includes direct benefits such as a health plan, life insurance and a private pension plan, called MRSPrev.
Compensation amounts are defined with the support of the consultancy Kornferry/ HayGroup, in line with the overall market.
Members of the Board of Directors only receive amounts related to travel and committee members are not compensated for performing this activity. In case of unjustified dismissal of statutory officers, the Company adopts an indemnification policy of six monthly salaries. No other contractual arrangements or other instruments are in place whereby members of the other management bodies are entitled to compensation in the event of removal from office or retirement.
Composition of the compensation of the statutory and non-statutory executive boards
| Statutory executive board | Non-statutory executive board |
|---|---|
| (i) 12 fixed monthly fees, equivalent to partners' compensation; (ii) direct benefits, including health plan, periodic medical check-up, life insurance and private pension plan; and (iii) variable compensation of the Statutory Executive Board comprising an annual bonus based on results. | (i) 13 fixed monthly fees; (ii) direct benefits, including health plan, periodic medical check-up, life insurance and private pension plan; and (iii) variable compensation of the Statutory Executive Board comprising an annual bonus based on results. |
Based on a systematic and disciplined assessment methodology to promote improvements in the effectiveness of governance processes, risk management and controls, the internal audit area contributes to the achievement of MRS objectives. The area is also responsible for Compliance activities, which seek to ensure that policies and standards are in place to mitigate the risks of practices in non-compliance with legislation, in addition to strengthening and disseminating an ethical and transparent culture in business. Its duties also include the management of the Organizational Guideline for Approval Authorizations and, as of 2023, the second line through Risk Management.
Providing legal advice to all MRS areas, including the Board of Directors and Executive Boards, in negotiations with third parties, is one of the main activities of the General Legal Management. Its duties also include providing advice on legal provisions, diagnosing potential legal risks, pointing out impacts for MRS and mitigation alternatives, when applicable.
Aiming to increase the transparency of its operations, as well as to provide guidelines for the adoption of good sustainability practices with the different stakeholders, MRS has several policies and documents:
For 2023, seeking the ongoing enhancement of Governance, the Corporate Sustainability Policy and the Sustainable Procurement Policy are under discussion. Representatives of the Shareholders and the Company’s main interface areas are involved in this work.
Documents are available at MRS Investor Relations website.