Governance

Meeting Expectations

Never before have the legitimacy and credibility of business and industry been more intensely challenged, or the demands for scrutiny and transparency been more insistent. As is so often the case in life, the misbehaviour of the few has constrained the independence of the many.

We embrace the underlying principles of more extensive disclosure and governance and have taken steps to assure that our standards and performance meet or exceed expectations of, and are known by, our Communities of Interest. See Glossary.

We have a Board of Directors which is truly independent. We have ten outside directors and two inside directors, the Chief Executive Officer and the Chief Operating Officer. While we still maintain the office of Chairman and Chief Executive Officer, the Board has appointed a Lead Director who holds Board executive sessions exclusive of senior management.

In addition to having an independent audit committee of the board, independent board committees also review environment, health and safety performance, as well as internal, environmental, health and safety audits undertaken by the company.

The Board's independent Audit Committee also assures that the company is complying with policies on facilitating payments, business conduct and conflicts of interest. Similarly, the Audit Committee annually reviews the company's political donations to assure that they comply with all applicable laws and policies.

Inco's Corporate Social Responsibility Report cites a variety of achievements and challenges, as well as goals and objectives for our social responsibility performance. We are now exploring an appropriate review and auditing mechanism for specific aspects of our performance. We expect to make further comments on this area of governance in our next report.

For additional detail on Inco's corporate governance, see the 2003 Annual Report and 2004 Proxy Circular.