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>> Corporate Governance

Corporate Governance Statement

The Board of Directors of ASG Group is committed to maintaining and promoting the principles of good corporate governance. Each year the Board reviews and confirms all charters, codes and policies. A summary is presented in this section of the annual report. The relevant documents may be reviewed on the Company website.

This Statement reflects our Corporate Governance policies and initiatives as at the date of publication of this Report. The ASX Principles of Good Corporate Governance and Best Practice Recommendations (the “ASX Principles”), in conjunction with the ASX Listing Rules, require companies to disclose whether their corporate governance practices follow the ASX Principles. The Board is in the process of reviewing its corporate governance statement in the light of “Second edition – Revised Corporate Governance Principles and Recommendations” published by the Australian Stock Exchange Limited in August 2007. The statement published is in accordance with the original guidelines which remain in force for reports regarding the financial year ended 30th June 2008.

The Company complies with the ASX Principles except in the following instances:

Principle 2 – Structure of the Board (Recommendation 2.4 – Nomination Committee): No formal Nomination Committee has been established given that the size of the Board allows the entire Board to participate directly in these functions. The procedures of the Board in relation to matters addressed by a nomination committee are in compliance with the Principles;

Principle 4 – Safeguard Integrity of Financial Reporting (Recommendation 4.3 – Structure of the Audit Committee): The vacancy for one of three Non-executive Director positions on the Board Audit Committee has recently been filled. The Committee operated for the FY2006 financial year with this vacancy unfilled. The Audit Committee and its activities comply in all other respects.

Principle 9 – Remuneration (Recommendation 9.3 – Structure of NED Remuneration): Non-executive Directors are eligible to participate in an equity participation plan approved by a general meeting of members in FY2003. An allocation of options to a Non-Executive Director was approved at the Company’s annual general meeting in November 2003.

The Roles of the Board and Management

The role of the Board is to oversee and guide the management of ASG Group to protect and enhance the rights and interests of its shareholders, and to take into account the interests of other stakeholders including clients, employees, suppliers and the community as a whole. The Board sets the strategic direction of the company, determines management objectives and targets, and monitors business performance in pursuit of the objectives. The Chief Executive Officer/Managing Director is responsible to the Board for day-to-day management of the company. The Board Charter describes the relationship between the Board and management, and defines their functions and responsibilities.

Board Composition

Membership of the Board is guided by the following principles:

• The number of directors will be maintained at a level which will enable effective spreading of workload and efficient decision making;
• The Chairman of the Board shall be an independent non-executive director and may not have served as an executive officer of the Company;
• A majority of the Board should be independent non-executive directors;
• The Board should comprise directors with a broad range of expertise, skills and experience from a diverse range of backgrounds; and
• The same individual may not hold the roles of Chairman and Chief Executive Officer.

Director Independence

Directors are expected to bring independent views and judgement to the Board’s deliberations. The Board comprises a majority of non-executive independent directors, a non-executive independent Chairman and different persons filling the roles of Chairman and Chief Executive Officer.

The Board regularly assesses the independence each director according to the independence criteria in ASX Principle 2 and to relevant laws, regulations and listing rules. Directors facilitate this review by providing up-to-date information regarding their personal circumstances related to the company, their external relationships and any potential conflicts of interest. The independence of new directors is assessed upon appointment.

The Chairman, Mr Ronald Baxter, meets the independence critera, given that he complies with all criteria set down for assessment of independence.

Mr Stephen Johnston, Mr Ian Campbell and Mr John McConnell are independent directors in accordance with the independence criteria, given that each of these directors complies with all criteria set down for assessment of independence.

Mr Geoffrey Lewis, the Managing Director is considered not to be independent.

Meetings of the Board

The full Board conducts at least ten meetings per annum, plus special purpose meetings on strategy, budget review and approval, review and adoption of reports, or other matters that require more time than a scheduled Board meeting normally permits.

Managers are invited to formal Board meetings and special purpose meetings, as required.

Appointment and Re-election of Board Members

The process for retirement by rotation and re-election of a director is set down in the Company’s constitution. If a retiring director nominates for re-election, the Board will assess the performance of that director in their absence, and determine whether the Board will recommend a shareholder vote in favour of the re-election, or otherwise.

Nomination and Appointment of New Directors

For new appointments, the Board identifies candidates with the appropriate expertise and experience, having regard to the weighted list of required directors’ competencies as maintained by the Company. The Board will appoint the most suitable candidate, but the shareholders at the next general meeting of the Company must ratify the appointment.

The key terms, conditions and requirements are set out in a standard letter of appointment as drafted by the Company’s lawyers. New directors are provided with an induction program specifically tailored to the needs of individual appointees. The program includes meetings with major shareholders, one-on-one meetings with the members of the management team and visits to key sites.

Directors are also encouraged to participate in the company’s continual improvement program and are expected to highlight areas of activity that could potentially be improved.

Board Access to Information and Independent Advice

All directors have unrestricted access to all employees of the group and, subject to the law, access to all company records and information held by group employees and external advisers. The Board receives regular detailed financial and operational reports from senior management to enable it to carry out its duties.

Each director may, with the prior written approval of the Chairman, obtain independent professional advice to assist the director in the proper exercise of powers and discharge of duties as a director or as a member of a Board Committee. The company will reimburse the director for the reasonable expense of obtaining that advice.