The Gerdau Group continuously strives to improve its practices by following the leading global standards. Our internal management systems are currently being consolidated into the Gerdau Business System (GBS), a fundamental tool for the development of current operations and of future business ventures.

Strategic objectives are defined for implementation over the long-term (10 years). These 10-year objectives are broken down into goals to be met within three-year periods. These goals, which serve to guide teams, are established based on internal and external benchmarks, or in other words, best practices followed within the company and by the market. This allows us to draw on the experiences and knowledge across all Gerdau units and those of other steel companies throughout the world, as well as the experience of companies from other economic sectors.

During the next stage, these strategic objectives are transformed into projects and goals that must be achieved by employees within a one-year period. Thus, every team's work begins to have a direct relationship with the Group's overall 10-year goals. Key performance indicators are defined for each objective, enabling management to determine whether the desired performance is being achieved. The variable pay awarded to employees is associated with reaching these goals and recognizes the contribution of employees in achieving new levels of efficiency.

The Gerdau Group's management process includes the Plan, Do, Check, Act (PDCA) methodology. The check function (follow-up and control) is exercised by leaders at different functional levels in a systematic and organized way. The checks can be performed daily, weekly, monthly, quarterly, biannually or annually, depending on the activity.

The Gerdau Executive Committee, which is responsible for the daily management of the business, holds regular meetings with the different teams to evaluate whether goals have been met during the year. The Committee also determines the operational plans for the following year and the next three-year period.

The Group's business management processes are supported by tools such as Six Sigma, Balanced Scorecard, Process Management, Project Management, Lean Manufacturing, Total Quality and mapping of technical, human and conceptual competencies, among others.

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