Corporate governance at ArcelorMittal - the challenge of increasing gender diversity in senior management 17 October 2011 (Female Board Pool Luxembourg, 2 nd edition) Carole Wintersdorff, Senior Legal Counsel, Corporate & Securities Law - ArcelorMittal

The challenge facing all companies today “Especially in today's economic tumult (…) human capital is the whole game. The world's wealth comes increasingly from companies that need little physical capital but require tons of human talent, knowledge, and creativity. Making judgments about people is becoming the central managerial skill” Source: Fortune magazine (U.S.A.), September

2 Good intentions – and real life Davos World Economic Forum 2011: Female Quota Flops. The Davos organizers had instructed the WEF's top 100 member companies that at least 1 of their 5 delegates must be female. 20 of the 100 multinationals couldn't come up with a woman and opted to forego their 5th delegate. 2,500 delegates, only 16% women. CSSF ( ): 7 directors, including 1 woman (14.3%) Bourse de Luxembourg ( ): 19 directors, including 1 woman (less than 5%) [10 Principles of CorpGov: encourage diversity + maximum board size: 16] EU Commission Green Paper on corporate governance, 5 April 2011: 12% of supervisory board members in the EU are female

3 Recent developments – United Kingdom (1) This month changes were announced to the U.K. Corporate Governance Code to strengthen voluntary reporting around board diversity. Companies are encouraged to begin reporting on diversity considerations immediately (it will formally take effect for fiscal years beginning on or after Oct. 1, 2012) Section B.2.4. of the Code: "A separate section of the annual report should describe the work of the nomination committee, including the process used in relation to board appointments. This section should include a description of the board's policy on diversity, including gender, any measurable objectives set for implementing the policy, and progress on achieving the objectives. An explanation should be given if neither an external search consultancy nor open advertising has been used in the appointment of a chairman or a non- executive director."

4 Recent developments – United Kingdom (2) UK government in principle against mandatory quotas FTSE 100 companies have recruited 23 women to their boards in 2011 to date – representing 30% of total board appointments (compared to 13% in 2010). Lord Davies has said that companies should adopt a voluntary target of 25% female board representation by The number of FTSE 100 companies without a single woman on their boards has fallen to 14, 21 in 2010.

5 Recent developments - Germany The German government is split on how to push for more women to sit on boards, with 3 female ministers not agreeing on a common line. The labour minister is pushing for a quota, the justice minister strictly opposes it, and another advocates a “flexiquota” and requires companies to determine their own goals by The 30 companies listed on Frankfurt's Dax index of leading shares said they would set targets to promote more female managers. The German government said firms should aim to increase female representation on their boards by 30% by Companies that fail to meet these goals may face sanctions. Germany's minister for labour wants to see an average of 30% female representation on supervisory and executive boards among listed companies by The figure for Germany's 200 biggest companies is currently 3.2%.

6 ArcelorMittal Corporate Governance Structure Sets Group strategy, oversees the executive management (10 members) GMB (8 members) implements strategy, manages day-to-day operations. Supported by Management Committee (25 members) Monitor and control implementation of strategy, oversight of legal compliance. Subsidiary + Affiliate BoDs Board of Directors Group Management Board Management Committee

7 ArcelorMittal’s corporate governance rules As a company listed on the New York Stock Exchange: the Listed Company Manual of the NYSE as applicable to « Foreign Private Issuers » → Exemptions for non-US companies → Compliance is mandatory unless there is an exemption. As a company incorporated in Luxembourg and listed on the Luxembourg Stock Exchange: 10 Principes of Corporate Governance of the Luxembourg Stock Exchange → « comply or explain »

8 Identifying suitable female candidates for BoD Offer (relatively scarce) vs demand (high) Recruitment process is professional ↔ recruitment firms (departure from « old boys’ network ») Profiles defined by companies are « ideal » rather than « realistic » More females candidates outside of industry (law/finance/consulting) may present conflicts of interest Unique challenges faced by heavy industry Women ask many questions + tend not to accept more than 2 directorships (vs. Men who ask few questions + usually accept more than 2 directorships) Similar risks existed a few years ago in France where pressure was put on French companies to « internationalize » → Risk: picking « wrong » person/profile for the job Positive trend: Professionalisation → It’s a real job, not a « favor »

9 ArcelorMittal’s BoD: 10 members - 8 men, 2 women (20%) Suzanne P. Nimocks was elected director on Ms Nimocks, 51, a U.S. citizen, was a director (senior partner) of McKinsey & Company (the global management consulting firm) June March She had been with McKinsey since She was a leader in the firm’s Global Petroleum Practice, Electric Power & Natural Gas Practice, Organization Practice, and Risk Management Practice, and a member of McKinsey’s worldwide personnel committees. She chaired the Environmental Committee of the Greater Houston Partnership, the primary advocate of Houston's business community, until Bachelor of Arts in Economics from Tufts University +MBA from Harvard Business School. She is currently a director of Encana Corporation and Rowan Companies Inc, both listed companies in the US and Canada, and of Valerus, a non listed company. 9

10 APERAM – former stainless (inox) and specialty steels business of ArcelorMittal APERAM is listed in Luxembourg and on Euronext) Board of Directors: 7 directors, including 2 women - 29% Kathryn A. Matthews (50): British. Extensive experience in the financial sector with a focus on asset management. Has held senior management roles with Fidelity International Ltd, AXA Investment Managers, Santander Global Advisors Inc. and Baring Asset Management. She is a non-executive director of several investment funds. She has a Bachelor of Science degree with honors in Economics from Bristol University. Independent director. Laurence Mulliez (45): French. CEO of Eoxis since Privately held Eoxis produces energy from renewable sources. Ms. Mulliez was previously CEO of Castrol Industrial Lubricants and Services at British Petroleum and held various positions in BP starting in 1999, including Head of Strategy for Gas, Power and Renewable Energy. She started her career at Banque Nationale de Paris as a Financial Analyst after a degree from Sup de Co business school in Rouen, France, and obtained an MBA with honors from the University of Chicago’s Booth School of Business in Independent director.

11 CWDI (Corporate Women Directors International) 2010 report & Egon Zehnder International (EZI) « European board diversity analysis 2010 » EZI studied 340 companies in 17 European countries, all large companies, i.e., a sample of 6 companies per country. 2010: Female representation on boards in the 17 European countries is 12.2% on average [compared to 29% in Sweden, Finland; 32% in Norway]. BUT: EZI’s sector ranking for companies in “Steels & Other Metals”: only 4.7% of directors are women. ArcelorMittal has 20% of female directors, APERAM 29%

12 Bringing women on board lowers average age EZI: Shortage of female directors results in younger women joining boards. When women join boards, the average board member age becomes lower. Luxembourg, 2010: the average age gap between male and female directors is 16 years. ArcelorMittal: 5 out of 10 Board members are 60+. Excluding Vanisha Mittal Bathia (who is 30), the average age is Including Vanisha Mitttal Bathia, the average director age is At 51, Suzanne Nimocks is 8.5 years younger than the average director if VMB is excluded from the calculation.

13 ArcelorMittal Group Management Board ArcelorMittal Management Committee Group Management Board (acts by delegation from BoD) matters): 100% male. 8 members. High degree of diversity based on nationality (Europe/USA/India). No female members. Management Committee (advises GMB): 96% male, 4% female. 24 male members, 1 female member. The one woman sitting on the MC is a South African and the CEO of our South African business. The MC has a high degree of diversity based on nationality (Europe/USA/Brazil/South Africa). We have achieved geographic diversity – but not yet gender diversity.

14 Boards of Directors of subsidiaries and affiliates ArcelorMittal initiative implemented in 2010 to increase the number of women on the boards of its subsidiaries/affiliates Purpose? To encourage and promote female talents by increasing their visibility and providing development and business perspectives outside their usual roles Goal? Increase by 30% the number of women on boards Achieved? Yes – we increased by 100% starting from a very low base Future: HR intends to continue to create opportunities like these which promote diversity and develop (female) talent

15 Diversity & Inclusion Policy: Launched in 201, covers the entire group (280,000 employees). Focus is on all diversity factors (racial/religious/gender) + preventing discrimination, not on gender diversity. GEDP+ / “Talent Pipeline” programmes: Process for identifying and fostering management-level talent. All candidates are selected based on education, experience and performance with stated goal being to identify/promote high potential women. As of the end of % of employees in the programmes were women. Succession Management: Process for identifying potential candidates for key positions includes specific actions related to increasing the number of women candidates 15→Deliberate intent to identify female successors. Dedicated working group formed in June 2011: A dedicated WG has been formed comprising senior management members, mainly from HR, to study gender diversity issues and propose initiatives to increase gender diversity throughout the ArcelorMittal group. Initiatives to Increase Gender Diversity at ArcelorMittal

16 Expanding gender diversity initiatives beyond the Board of Directors Very few companies have publicly committed to self-imposed quotas/targets: Deutsche Telekom announced a self-imposed quota of 30% of women in senior management by 2015 Daimler announced a self-imposed goal of 20% of executive positions to be held by women by 2020 The 30 companies listed on Frankfurt's Dax index of leading shares said they would aim to increase female representation on their boards by 30% by 2013 Merck announced a target to lift the proportion of female managers to 25-30% by 2015 → ArcelorMittal has so far not set any such goals.

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