Democratic values

20 Apr 2006 By Edward Hadas

The steelmaker isn t letting its owners vote directly on its defence plan. The best they can do is not to reelect the directors. It s ironic that Arcelor has thrown away its best competitive advantage in the fight with Mittal its corporate governance.

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Institutional Shareholder Services, a corporate governance advisor, has recommended that shareholders vote against the reelection of Joseph Kinsch and Jose Romon Alvarez Rendueles, the chairman and vicechairman of Arcelor's board of directors. It also recommended against discharging the directors of responsibility for 2005 and renewing the authorisation to repurchase up to 10% of the company's own shares.

The advice came in response to the company's refusal to give shareholders an opportunity to vote on its defence plans at the April 28 annual shareholders' meeting. ISS argued that opposing these nominees is the most appropriate measure for shareholders to show their displeasure with the company's recent actions.

Adam, a French shareholder group, suggests that shareholders reject the entire slate of directors. Adam also intends to protest against the corporate governance of Mittal Steel, which has made a takeover offer for Arcelor.

Shareholders will vote on the reelection of 14 of the 18 members of the Board of Directors.

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