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Corporate
Governance

Governança Corporativa
Employees from Cajamarquilla

We follow the principles of transparency, fairness, accountability and corporate responsibility in our organization. We want to go beyond efficiency and technical rigor, maintaining the confidence already achieved in the markets and society, through a robust structure for decision-making, follow-up and monitoring of our achievements. Following international standards of best corporate governance practices, we extract what is essential to the present, with a responsible view of the future, designed to generate value for us and for society. Our main policies are established by the Board of Directors and supported by four advisory committees: Finance; Compensation, Nominating and Governance; Audit (composed entirely of independent directors); and Sustainability and Capital Projects. GRI 103-2, 103-3

We are a publicly traded company, with shares traded on the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSX). We are Sarbanes-Oxley (SOX) certified, which guarantees strict internal control and disclosure systems, required by US law. Even before the company’s initial public offering, we already had structured governance bodies in 2017 to guarantee autonomy and speed in decision-making and the definition of business strategies.

Our governance model is constantly improving, to meet the dynamics of society and our shareholders. Thus, in view of the health crisis scenario caused by Covid-19, we installed a crisis committee in March, at the corporate level and in the units, following the rules established in our Crisis Management Manual, developed in 2018. At the corporate level, the committee is formed by the CEO, vice-presidents and key personnel identified to help solving specific problems in the topic in question, not linked to the Board of Directors.

Another improvement occurred in the Sustainability Committee, which is currently called Sustainability and Capital Projects Committee, giving more visibility and transparency to the information related to the projects identified as the most relevant for the company, whether from a social, business or investment volume perspective.

Governance Structure
GRI 102-18
Our governance structure is formed by the Shareholders’ Meeting, the Board of Directors, the Advisory Committees and the Management Team.

Shareholders’ Meeting

It is our main decision-making body, empowered to amend the Bylaws, elect or dismiss members of the Board of Directors, approve accounts and financial statements, and other matters that are vital to our business.

Board of Directors (BoD)
GRI 102-22

It strives for the fulfilment of the business objectives and monitors its performance, seeking business longevity. Its responsibilities include: establishing the company’s general guidelines, defining mission, strategic objectives and direction; conducting the annual adoption and approval of strategic planning; approval of transactions related to Capex investments and other relevant financial transactions, such as loans, mergers, incorporations or joint ventures, in accordance with the limits established in the Bylaws; evaluating the CEO’s performance and effectiveness; oversight and assurance of the company’s governance and sustainability practices.

Our Bylaws require that the Board of Directors be comprised of at minimum of five and maximum 11 full members, at least three of them independent, in order to comply with the rules established by the stock exchanges in which we are listed. The members’ term of office is one year, with the possibility of re-election.

Currently, the Board of Directors is made up of ten members (two women and eight men), of different nationalities. Four of them are independent members. We always seek to have diversity represented not only in our organization’s operations, but also in our highest governance body. In 2020, one member left the Board of Directors, who was replaced, and the change of the president, elected at the meeting. No member, including the Chairman of the Board, exercises an executive function in the company and all receive compensation. GRI 102-23

More information about the duties of the Board of Directors and the curriculum of each member can be found at
nexaresources.com/board-of-directors

BOARD OF DIRECTORS

Jaime Ardila
Chairman of the Board (Compensation, Nominating and Governance Committee)

Edward Ruiz
Independent Director (Audit Committee and Finance Committee)
João Henrique Batista de Souza Schmidt
Director (Finance Committee)
Diego Hernandez
Director (Sustainability and Capital Projects Committee)

Jane Sadowsky
Independent Director (Audit Committee and Compensation, Nominating and Governance Committee)

Daniella Dimitrov
Independent Director (Audit Committee and Sustainability and Capital Projects Committee)
Eduardo Borges de Andrade Filho
Independent Director (Compensation, Nominating and Governance Committee)

Luís Ermírio de Moraes
Director (Compensation, Nominating and Governance Committee)

Ian W. Pearces
Director (Sustainability and Capital Projects Committee
Gianfranco Castagnola
Director (Finance Committee)
Corporate STRUCTURE
ESTRUTURA ORGANIZACIONAL
3Nexa Resources holds a direct equity interest of 0.17% in Nexa Resources Peru S.A.A. and an indirect equity interest of 80.06% through the Cajamarquilla unit; 15.79% of shares are in free float float and the remaining 3.97% of the shares are held in Treasury. Excludes the investment class shares.
4Nexa holds 100% of the common shares and 33.3% of the total capital stock of Pollarix.

Advisory committees
GRI 102-22, 102-18

The permanent committees aim to assist the Board of Directors in monitoring the company’s performance. Composed of Board members, they cover Audit, Finance, Compensation, Nominating and Governance, as well as Sustainability and Capital Projects matters. There are at least three annual meetings held, and periodically one of the members reports on the activities of the committee back to the BoD. Each committee has its own set of internal rules, which establishes roles and mandates, rules and procedures for its operation.

Audit Committee – Comprised of three independent members of the BoD, it is responsible to assist the board of directors´oversight of: quality and integrity of our financial reporting and related financial disclosure, the effectiveness of our internal control over financial reporting and disclosure controls and procedures, the monitoring of risk management processes and establish international governance standards (required by the TSX and the NYSE), as well as ethics and conduct procedures.
Finance Committee – Comprised of three members of the BoD, one independent. It is responsible to assist the board of directors in fulfilling its oversight responsibilities with respect to monitoring Nexa’s balance sheet and by providing recommendations on our capital management strategy and capital structure, including indebtedness, investments and returns, among others.
Compensation, Nominating and Governance Committee – Composed of four BoD members, two independents. It is responsible for evaluating compensation models, proposing candidates to the chair of CEO and the board of directors, as well as the evaluation of the performance and effectiveness of the board of directors, the CEO and each of the board’s standing committees, and developing corporate governance guidelines and principles.
Sustainability and Capital Projects Committee – Composed of three BoD members, one independent. It is responsible to assist the board of directors by supporting safe and sustainable business practices in the conduct of our activities in respect of environmental, health, safety and social matters, including tailings management. The committee also assists in the oversight of the estimate and disclosure of mineral reserves and resources related to our operational projects. It is also responsible for assisting the board with the review of technical, economic and social matters with respect to our projects, including exploration, development, permitting, construction and operation of our mining and smelting assets, which are core to our strategy and growth.
GOVERNANCE STRUCTURE
Estrutura de Governança
Management Team

Comprised of the president and the eight vice presidents, who make up the Management Team meet weekly to monitor strategic planning, discuss financial and non-financial issues and outline tactical plans for their teams. It is formed by leaders with the capacity to act globally in the key business areas and in the relationship with all stakeholders. Its objective is to ensure the development and execution of the strategic and budgetary plan, based on guidelines received from the Board of Directors. In 2020, the new Vice President of Human Resources, appointed in 2019, formally took over, and the Senior Vice President of Project Development and Execution was replaced. The management team also started having a more direct participation in the Board meetings, to personally discuss issues related to their areas, increasing their accountability before the Board members.

MANAGEMENT TEAM
Diretoria-executiva
Employees from Lima Corporate Office
Ethics and Compliance
MATERIAL TOPIC GRI 103-2, 103-3
Aiming to manage our businesses with the highest standards of ethics and integrity, we rely on the support of our Compliance Program, periodically reviewed, which specifically details the conduct we expect from all our employees and third parties when addressing the most diverse situations. The management and dissemination of this program is the responsibility of the general Compliance, Controls and Internal Audit management, who reports administratively to the CEO and functionally to the Audit Committee. As of 2020, the Internal Controls and Compliance areas are no longer linked to the Finance Department, gaining more independence and synergy in the performance of their duties. The Board of Directors is one of the main agents in promoting the program and we are determined to ensure its compliance, with penalties for acts that are not in compliance.

One of the main pillars of the Compliance Program is the Nexa Code of Conduct, essential in guiding activities and supporting decisions made at all levels of our Company. Based on the century-old values of the Votorantim Group, this document guides our internal behavior and the way we interact with different audiences. The Compliance program is comprised of policies – such as Compliance; Anti-corruption; Antitrust/Competition; and Money Laundering and Terrorism Financing Prevention – and the nine internal procedures that detail the management of these issues on a daily basis. Published two years ago, they are under review to incorporate the improvements that have been made over the period. Additionally, in 2021, we will create five additional general procedures and, after the issuance of these documents, update training will begin. The documents currently effective are available on the company’s website (ri.nexaresources.com).
GRI 205-2, 412-2 SDG 16.5

The Code of Conduct is a public document, shared with all stakeholders, including employees, suppliers, customers, communities, NGOs, government entities, shareholders and other individuals and organizations with whom we interact, to ensure that we achieve excellence in all our practices. Its review is scheduled for 2021, with the inclusion, among other issues, of the handling of data from third parties and employees, plurality and environmental, social and governance (ESG) practices. Our beliefs and our values are detailed on the internet (nexaresources.com/beliefs-and-values).
GRI 102-16
Training in policies and procedures
SDG 10.3

Remote training in the three policies – Code of Conduct, Anti-Corruption and Money Laundering – was available to the eligible employees via e-learning. Professionals hired as of the second quarter of 2020 should mandatorily attend this online training in their onboarding process. GRI 205-2 SDG 16.5

In 2020, a risk assessment was also performed to identify professionals in positions considered critical; that is, who are directly related to government, customs brokers, competitors, non-profit entities, communities, among others. These people were trained in specific rules and conduct for their positions. In the next period, people exposed to risks related to the management of third parties will be identified, who will also be subjected to specific training.

Information and reporting channels
GRI 102-17 SDG 5.1

Aiming to maintain the appropriate communication channels to report misconduct, we provide the Ethics Line, so that the internal and external audiences can report possible violations of the Code of Conduct or any policy, procedure, law or regulation. It was implemented to be impartial and transparent, in addition to ensuring the information confidentiality, safeguarding the identity of anyone who accesses it and promoting the best work environment for everyone.

Through this channel, it is possible to fully and anonymously report, any suspicion of financial crime, fraud, corruption, discrimination, harassment or other types of ethical violations. Available in Portuguese, English and Spanish, the service can be accessed through the electronic address (secure.ethicspoint.com) or by phone (Brazil: 0800-892-0741 (Portuguese); Peru: 0800-50-000 (Spanish) and 0800-50-288; United States: 1-855-888-9926; Canada 1-855-888-9926 and 1-855-350-9393; and Luxembourg: 800-201-11 (English and French). The use and operation of the channel are widely publicized to employees.

The channel is managed by a specialized and globally recognized external company, which performs the initial screening of all reports received to ensure that there is no conflict of interest in the handling of complaints. The Audit Committee and the organization’s leaders, supported by the Internal and Legal Audit areas, decide how to deal with each report received from its initial understanding, interviews with the parties involved, detailed investigation and conclusion as to the merits or lack thereof regarding the complaint, with the possible application of disciplinary and orientation measures.

However, no cases of corruption or violation of antitrust and antimonopoly laws involving employees or business partners were confirmed during the period. GRI 205-2, 205-3, 206-1

Risk Management
GRI 102-15, 103-2, 103-3
The Risk Management area, formerly part of the General Management of Internal Controls, Compliance and Risks, became part of the General Management of Controllership and Financial Planning, a management change that does not impact our risk procedures. The area is responsible for identifying, evaluating, tracking and monitoring the company’s risk mitigation action plans.

We have divided risks into three major topics: compliance; business risks (operational and strategic, including social and environmental aspects, and project risk); and financial risks. The risk matrix is reviewed annually to ensure it is always aligned with our strategic plans. In the ongoing review, we are analyzing the improvement of how this risk matrix can be submitted to the board members on a quarterly basis, with the purpose of giving more visibility to the risks to which the company is exposed and facilitating monitoring.

For risks considered critical and high, we have prepared action plans with specific deadlines for completion. Those with high and critical risks rely on the issuance of expiration alerts, facilitating the monitoring and compliance with deadlines. We carry out a monitoring that involves, in addition to the area directly responsible for the issue, the Risk team, the Financial Executive Board, the Board of Directors and the Audit Committee. For the risks below this rating, the monitoring is performed on an ad hoc basis by the areas involved.

Since 2016, we have adopted the Enterprise Risk Management – ERM Policy, which addresses the main risks in all corporate areas and operational units and is applied to subsidiaries and controlled companies. With the adequacy of the BWise System to our management process, the risk assessment is performed online and can be updated at any time, and not only in the reassessment period determined by the ERM team. Therefore, we gain efficiency in the evaluation and monitoring process.

With the new scenario arising from Covid-19, virtually all risk management processes were carried out. The training on the BWise system took place with the participation of the focal points of the units and the corporate areas. These focal points started reassessing the risks with the areas and input the information in the system, as well as identified new risks and filled in the matrix, with the full process being assisted by the Risk Management area.

Among the new risks identified are those regarding the Aripuanã project, which still need to be complemented with operational activities (mine development, drilling and geomechanics). We also identified the IT risks arising from the General Data Protection Act, which will be inserted and managed at BWise as of 2021. In 2020, the financial and non-financial impact rule was updated to adapt to the changes in our scenario and are already reflected in the system. During the year, we also made progress in project risk governance, holding workshops to support Vazante and Três Marias to identify risks in small internal projects, which emerged with high and critical risk action plans.

With the support of an external consulting firm, we carried out a risk culture survey, involving all Nexa employees and third parties from Brazil, Peru, Luxembourg and Namibia. Eight vectors were assessed: Risk tolerance and appetite; Perception of risks and vulnerability; Perception of controls; Discipline regarding rules and procedures; Autonomy in decision-making; Compliance culture; Prioritization of risks vs. production; Occupational safety. The score of each vector was compared with the Brazilian national average within the segment and with the global benchmarking, when applicable. Each unit and each corporate area had its average score in each of the vectors and operation strategies are being created for each one of them according to the result obtained.

Employees from Três Marias

The details of the main risks we manage can be found in the Form 20-F, a document presented to the New York Stock Exchange, that can be accessed at
ir.nexaresources.com/regulatory-filings

ReputaTION
MATERIAL TOPIC

We want to stand out from our competitors by bringing the world of mining to the world of people, through sustainable production and co-creation a legacy for society.

We constantly take care of our corporate and organizational identity to be recognized before the internal and external audiences as a company that consistently invests in the sustainability and longevity of its businesses while payment close attention to the impacts of its activities on the environment and in society, seeking to mitigate them.

Our Corporate Affairs area has carried out and extensive work to identify opportunities to expand the influence with stakeholders that impact the company’s business, increasing the familiarity of the Nexa brand by occupying positive spaces in the press, at events and on social media, as well as we seek to generate connection with the priority stakeholders for the company.

By taking care of our reputation, we are contributing to maintaining our leadership position in the Latin American market, attracting better talent, expanding the penetration of our products in different markets and presenting even more stable results.

One of the parameters to identify a company’s reputation is through the awards and recognitions received.

Awards and Recognition
Company of the Year by the magazine Brazil Mineral – Nexa Resources was elected for the 12th time as one of the Companies of the Year by Brasil Mineral magazine. In the 36th edition of this award, the company was the winner in the Non-Ferrous Metals category for its innovative capacity in fighting the pandemic.
Companies that Best Communicate with Journalists Award – In the 8th edition of the award promoted by Negócios da Comunicação magazine, in partnership with Centro de Estudos da Comunicação (Cecom), Nexa was recognized in the mining sector for generating good quality information, being transparent in its communication and maintaining a good relationship with journalists and the market. 25 thousand professionals from all over Brazil were consulted for the award, voting for companies from 30 sectors of the economy.

Excellence in the Brazilian Mining-Smelting Industry Award – the second consecutive time, the Vazante unit received the award from Minérios Magazine in the process category, with the project “Optimization of ball mill lining”, which allows to extend the profile useful life and optimize the performance of a given mill, resulting in significant increases in production capacity and energy gains in our operation.

Sustainable Development Award – Nexa ranked first in the category Together against Covid-19 – Adding Efforts, in the Sustainable Development Award promoted by the National Society of Mining, Oil and Energy (SNMPE), at Peru. The company was recognized for its contribution to the fight against the new coronavirus in its Citizen Monitoring and Surveillance project, from which 60 monitors were trained in 14 communities in Pasco and Chincha to help establish safety rings to prevent contagion.

Best Underground Mining Safety Indicator – El Porvenir unit was recognized by the Peruvian Mine Safety Institute (ISEM) for achieving the best underground mining safety indicators in the country during 2019. Six million man hours were worked, with no record of fatal accidents and zero accidents, the result of a robust safety plan implemented since 2018.
Sustainability
We want to be a benchmark in sustainability, continuously improving the organization’s safety and health culture. At the same time, we seek to reduce the environmental impacts (emissions, waste, water, and energy consumption, and similars) of the operations and co-create a relevant legacy for society, based on a constructive relationship with our stakeholders.

In all our activities, we follow strict sustainability guidelines as defined in our Sustainability Master Plan, whose practices are supported and monitored by the Sustainability Committee that was created in 2019 and improved in 2020, including in its scope the monitoring of the most relevant projects for the company.