building a STRONGER foundation - Cemex

Item 16G - Corporate Governance
Section 303A.11 of the New York Stock Exchange (“NYSE”) Listed Company Manual (“LCM”), requires that listed foreign
private issuers, such as CEMEX, disclose any significant ways in which their corporate governance practices differ from those
followed by U.S. companies under NYSE listing standards.
CEMEX’s corporate governance practices are governed by its bylaws, by the corporate governance provisions set forth in the
Ley del Mercado de Valores (the “Mexican Securities Market Law”), the Circular de Emisoras (the “Mexican Regulation for Issuers”)
issued by the Comisión Nacional Bancaria y de Valores (the “Mexican Banking and Securities Commission”) and the Reglamento
Interior de la Bolsa Mexicana de Valores (the “Mexican Stock Exchange Rules”) (the Mexican Securities Market Law, the Mexican
Regulation for Issuers and the Mexican Stock Exchange Rules, collectively the “Mexican Laws and Regulations”), and by applicable
U.S. securities laws. CEMEX is also subject to the rules of the NYSE to the extent they apply to foreign private issuers. Except for
those specific rules, foreign private issuers are permitted to follow home country practice in lieu of the provisions of Section 303A of
the LCM.
CEMEX, on a voluntary basis, also complies with the Código de Mejores Prácticas Corporativas (the “Mexican Code of Best
Corporate Practices”) as indicated below, which was promulgated by a committee established by the Consejo Coordinador
Empresarial (“Mexican Corporate Coordination Board”). The Mexican Corporate Coordination Board provides recommendations for
better corporate governance practices for listed companies in Mexico, and the Mexican Code of Best Corporate Practices has been
endorsed by the Mexican Banking and Securities Commission.
The following is a summary of significant ways in which our corporate governance practices differ from those required to be
followed by U.S. domestic companies under the NYSE’s listing standards.
NYSE LISTING STANDARDS CEMEX CORPORATE GOVERNANCE PRACTICE
303A.01
Listed companies must have a majority of
independent directors.
303A.03
Non-management directors must meet at
regularly executive sessions without management.
303A.04
Listed companies must have a
nominating/corporate governance committee
composed of independent directors.
Pursuant to the Mexican Securities Market Law, we are required to have a board
of directors with a maximum of 21 members, 25% of whom must be independent.
Determination as to the independence of our directors is made upon their election
by our shareholders at the corresponding meeting. Currently, our Board of
Directors has 12 members and 3 alternate members, of which more than 25% are
independent under the Mexican Securities Market Law.
The Mexican Securities Market Law sets forth, in article 26, the definition of
“independence,” which differs from the one set forth in Section 303A.02 of the
LCM. Generally, under the Mexican Securities Market Law, a director is not
independent if such director is an employee or officer of the company or its
subsidiaries; an individual that has significant influence over the company or its
subsidiaries; a shareholder that is part of a group that controls the company; or, if
there exist certain relationships between a company and a director, entities with
which the director is associated or family members of the director.
Under our bylaws and the Mexican Laws and Regulations, our non-management
and independent directors are not required to meet in executive sessions. Our
Board of Directors must meet at least once every three months.
Under our bylaws and the Mexican Laws and Regulations, we are not required to
have a nominating committee. We do not have such a committee.
Our Corporate Practices Committee operates pursuant to the provisions of the
Mexican Securities Market Law and our bylaws. Our Corporate Practices
Committee is composed of four independent directors.
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