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Corporate Governance

Severstal’ corporate governance system conforming to the modern requirements of the investors received a new development after the Company’s shares started to quote on the London Stock Exchange in the end of 2006. Committing to the best international practices of corporate governance the Company raised its corporate governance to a brand new level and is doing its utmost to improve it.

During the formation of the corporate governance standards Severstal focused on the requirements of the Combined Code on Corporate Governance, as well as recommendations of the Corporate Conduct Code of the Federal Financial Markets Service (2002). Many basic requirements of these codes found its application in the company corporate governance practices including those related to the composition of the Board of Directors, Board committees, functions of the Board Chairman, General Director, the leading role of the Board of Directors in working out the company development strategy, development of the Internal Audit and Risk Management Department, release of quarterly statements prepared on the basis of International Financial Reporting Standards and publication of the Annual Report as required by the international standards. The Company developed mechanisms for approval of large-scale and related party transactions by the Board members. The interaction system of the Company’s Board of Directors and the management allows to operate the Company’s business more efficiently.

OAO Severstal is a member of the Russian Institute of Directors, the leading expert and resource center for corporate governance established by the largest Russian issuer companies to develop, incorporate and monitor standards of corporate governance in Russia.

Awards

• 2008 - the Association of Independent Directors and PricewaterhouseCoopers honoured Rolf Stomberg, Senior Independent Director of OAO Severstal, as one of the best in the nomination “Independent Director 2008” and Oleg Tsvetkov, Corporate Secretary of OAO Severstal, became the winner in the nomination “Corporate Governance Director – Corporate Secretary 2008”.
• 2007- OAO Severstal won a special nomination “Best level in disclosure of information about corporate governance practices” in the Contest of Annual Reports organized by the rating agency "Expert RA";
• 2007 OAO Severstal became the best in the nomination for "Best Practice in Corporate Governance" sponsored by Investor Protection Association;
• 2006 OAO Severstal won an annual prize "For an Active Corporate Policy in the Area of Information Disclosure" handed by Interfax and AK&M agencies;