Aristocrat Leisure : 2021 Corporate Governance Statement

Co rp o ra t e G ov e rn a n ce S t a t e m e n t 2 02 1 onlyuse

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Corporate Governance Statement

Our approach to Corporate Governance

The Board of Aristocrat Leisure Limited (Aristocrat or Company) is committed to maintaining high standards of effective corporate governance arrangements to help create, protect and enhance shareholder value and ensure the future sustainability of the Company. Aristocrat's strong governance framework provides a solid structure for effective and responsible decision making and setting a culture of integrity, transparency and accountability that flows throughout the Group.

Corporate Governance					Delegation
Framework
				Board
only
						Accountability		CEO
use	Internal auditor	Independent
External auditor	Assurance		Assurance,
		oversight, reporting	Delegation	Accountability	Delegation
				Committees				Executive
							Steering Committee

Compliance with ASX Corporate Governance Principles

personalAristocrat has followed the 4th Edition of the ASX Corporate Governance Council Principles and Recommendations (ASX Principles) throughout the 2021 financial year (the Reporting Period). This Corporate Governance Statement sets out key features of the Company's governance framework and compliance with the ASX Principles.

The Board continually reviews Aristocrat's governance policies and practices to ensure that they remain appropriate in light of changes in corporate governance expectations and developments, including as reflected in the 4th Edition of the ASX Principles.

This statement has been approved by the Board and is dated 18 November 2021.

Aristocrat's 2021 Areas of Governance Focus

During the year, the Board provided strategic guidance and effective oversight of management in its implementation of Aristocrat's objectives and instilling its values and desired culture.

CULTURE

- Ongoing oversight of Aristocrat's desired culture by leveraging data and analytics provided through a range of resources including our employee culture and engagement surveys and insights platform.

- The roll-out of mandatory global compliance training (covering, among other topics, anti-bribery and anti-corruption (ABAC)) and anti-modern slavery training for all global Gaming employees. The training is aimed at equipping employees to identify and speak-up should they observe situations that indicate ABAC or modern slavery concerns.

SUSTAINABILITY

• Continued risk-based identification of environment, social and governance (ESG) priorities, including Governance, Climate, Circular ForEconomy, Responsible Gameplay, Data Security and Privacy, Responsible Sourcing, Talent, Inclusion, Wellbeing and Community.
• Oversight of sustainability initiatives to ensure they are adequate to deliver progress against the Group's priorities, with Board participation where appropriate. Initiatives include improving and embedding policies, increasing awareness among staff, delivering training, capturing data, pursuing improvement initiatives and expanding reporting.
• Recognising that the Board, together with management, has a critical role in supporting responsible gameplay at Aristocrat, a comprehensive board education program on the topic has been developed as part of the Board's education and professional development calendar.

RISK MANAGEMENT

• Ongoing review and enhancement of risk management frameworks and governance to support achievement of business objectives.
• Continued focus on the Health, Safety and Environment (HSE) risk management framework and Business Resilience with global and regional business resilience teams co-ordinating and overseeing the Group's ongoing response to the COVID-19 pandemic.
• Achievement of an average cyber security maturity rating of 3.37 for FY2021, well ahead of the 2.5 target rating set for FY2021.

Aristocrat continues to have strong corporate governance practices and an appropriate culture in place, while at the same time maintaining the Board's strong strategic focus.

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1. The Board
2. The Role of the Board

The Board's primary role is to demonstrate leadership, provide overall strategic guidance and effective oversight of management in onlyimplementing Aristocrat's objectives and instilling its desired values and culture.

The roles and responsibilities reserved for the Board are set out in the Board Charter and include responsibilities relating to:

- leadership, strategy and oversight;

- governance;

- appointment, remuneration and performance of the CEO and the CEO's direct reports;

- financial;

- risk management;

- people and culture including overseeing Aristocrat's workplace health and safety measures; and use- l gal and compliance.

A copy of the Board Charter is available in the Governance section of the Company's Investor Centre at www.ir.aristocrat.com

The Board reviewed and updated its Charter during the Reporting Period to ensure the role, responsibilities and accountabilities of the Board remain appropriate and reflect a high standard of corporate governance.

The Board has authorised the CEO to oversee the day-to-day business and operations, within the limits of specific authorities set out in the delegations approved by the Board. The CEO has, in turn, approved sub-delegations of authority that apply to management.

The CEO is accountable to the Board. The Board monitors the decisions and actions of the CEO and the Group's progress on achieving the personalshort, medium and long-term objectives as set by the Board.

1.2 The Board Is Structured to Add Value

As at 30 September 2021, the Board comprised six independent Non-Executive Directors and the CEO and Managing Director, who is an Executive Director.

The names of the Directors and their respective qualifications, experience and responsibilities are set out in the Directors' Report within the Annual Report.

The Board's approach to its composition and renewal is determined using the following principles:

- Skills and Experience: A relevant blend of skills, expertise and experience to enable it to deal with current and emerging opportunities and risks, and to effectively review and challenge the performance of management. As an organisation with diverse global operations, the Board considers it important that it has members with experience in the major jurisdictions in which the Group operates, as well as having members with global business experience.

- Independence: The Board considers that all of its Non-Executive Directors, including the Chairman, were independent during the year and continue to be independent.

- Diversity: The Board has a diversity objective that includes geographical, gender and skills diversity to effectively discharge its responsibilities.

- Tenure Profile: The Board balances the length of service of each of its Non-Executive Directors so that it is appropriately balanced and Board succession and renewal planning is managed over the medium to longer term.

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1		1
			2
	3
Independence	4	Gender	Tenure
CEO	Female	0-4 years
Independent		Male	5-7 years
6		4	7+ years

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1.0 The Board continued

1.3 Board Skills and Experience

The Board seeks to have an appropriate and diverse mix of skills, experience, expertise and diversity (including geographical, gender onlyand skills diversity) to effectively discharge its responsibilities, appropriately monitor risk management and add value to the Group.

The Board has identified the following strategic priorities for the Group to drive sustained shareholder value:

- financial performance and sustainable profitability by expanding into markets adjacent to the core Gaming and Digital businesses

and driving continued momentum in various markets within a framework of effective controls and risk management.

- execution of strategic priorities, including developing and delivering on a sustainable strategic framework for the business.

- continue to embed effective risk management throughout the organisation, with a focus on business resilience, cyber security and

privacy maturity.

- product quality and delivery, product innovation, great game content and customer centricity.
- driving leadership effectiveness and a high performing culture through development, retention and succession planning across all
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	management levels and for creative talent.
The following table sets out the mix of skills and experience represented on the Board as at 30 September 2021:
	Skills and experience			Collective
		EXECUTIVE LEADERSHIP
personal		Significant experience at a senior executive level	Moderate	Strong	Very strong
	CAPITAL MANAGEMENT AND CORPORATE
		Senior experience in capital management strategies and corporate finance	Moderate	Strong	Very strong
		GLOBAL BUSINESS EXPERIENCE
		International business experience	Moderate	Strong	Very strong
		RISK MANAGEMENT
		Senior experience in financial and non-financial risk management	Moderate	Strong	Very strong
		FINANCIAL REPORTING AND MANAGEMENT
		Senior experience in financial management, reporting and audit	Moderate	Strong	Very strong
		CORPORATE GOVERNANCE, LEGAL AND REGULATORY
		Commitment to the highest standards of corporate governance and legal compliance, including	Moderate	Strong	Very strong
		experience with an organisation that is subject to rigorous governance and regulatory standards
orF	DIGITAL TECHNOLOGY1
		Senior experience in technology, especially in digital, software or computer	Moderate	Strong	Very strong
		industries and oversight of implementation of major technology projects
		INDUSTRY KNOWLEDGE AND EXPERTISE
		Senior executive or Board level experience in the land-based and/or digital gaming industry,	Moderate	Strong	Very strong
		including an in-depth knowledge of product and markets
		REMUNERATION AND PEOPLE
		Board remuneration committee membership or management experience	Moderate	Strong	Very strong
		in people management, succession planning and remuneration policy

1. Other Directors on the Board have broader technology experience which is also valuable.

In addition, A.G. Burnett was appointed as an independent voting member of the Board Regulatory and Compliance Committee on 16 March 2021. Having served as Chair of the Nevada Gaming Control Board from 2012 to 2017, among other appointments, A.G. Burnett is highly regarded for his leadership in developing strong frameworks for the gaming industry and provides his expert input to support the Regulatory and Compliance Committee's deliberations.

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1.0 The Board continued

1.4 Director Independence

All Directors, whether independent or not, are expected to bring an impartial judgement to bear on Board decisions and are subject to the onlyBoard's policy regarding management of conflicts of interest, as well as common law and Corporations Act requirements.

Each year, the Board assesses whether each of the Non-Executive Directors are independent. In making such an assessment, consideration is given to whether the Non-Executive Director satisfies Aristocrat's criteria for independence. Those criteria are set out in the Board Charter.

During the 2021 financial year, the Board reviewed each Non-Executive Director's independence and concluded that each Non-Executive Director is independent.

The Board considers Pat Ramsey to be an independent Non-Executive Director, notwithstanding his previous employment with Aristocrat. Pat Ramsey was employed by Aristocrat for approximately nine months in the role of Chief Digital Officer prior to his appointment as a Non-Executive Director effective 1 October 2016. The Board considers that the short length of his employment, the position he held within Aristocrat, and the fact that it has been over five years since Pat Ramsey held his executive role, means that his independence is not

usecompromised, and the Board is confident that he brings objective and independent judgement to the Board's deliberations.

D tails, including the term of office, qualifications, experience and information on other directorships held by each member of the Board can be found in the Directors' Report within the Annual Report.

1.5 Non-Executive Director Selection and Succession Planning

The Board adopts a structured and rigorous approach to Board succession planning. This process is continuous and the Board regularly evaluates and reviews its succession planning process to ensure the progressive and orderly renewal of Board membership.

Before a candidate is nominated by the Board, the candidate must confirm that they will have sufficient time to meet their obligations to Aristocrat and that they expect to meet all gaming licensing and regulatory approval conditions.

personalIn ddition, because Aristocrat operates in a highly regulated environment, comprehensive background and reference checks are undertaken on candidates - further information is set out in section 1.6 of this Corporate Governance Statement.

An election of Non-Executive Directors is held each year. Any new Non-Executive Director nominated during the year is known as a Non-Executive Director (Elect) and will stand for election by shareholders at the subsequent Annual General Meeting (AGM). Shareholders are asked to approve the appointment of a Director (Elect) subject to the receipt of all necessary regulatory pre-approvals. Until the receipt of

all ecessary regulatory pre-approvals, a Non-Executive Director (Elect) may attend all Board and any Committee meetings of the Company but will have no entitlement to vote on any resolutions proposed at any meeting of the Board or any Committee.

Aristocrat has appropriate procedures in place to ensure that material information relevant to a decision to elect or re-elect a Non-Executive Director (including whether Directors support the election or re-election), is disclosed in the notice of meeting provided to shareholders. Non-Executive Director candidates are also invited to address the meeting and provide details of the relevant qualifications, experience and kills they bring to the Board.

1.6 Background Checks

As Aristocrat operates in a highly regulated environment and is required to be licensed by gaming regulatory authorities in more than 320 jurisdictions, the Company undertakes comprehensive background checks prior to the appointment of a new Non-Executive Director or senior executive to demonstrate that the individual is suitable to be associated with the gaming industry. Non-Executive Directors and certain senior executives are required to be licensed in over 45 jurisdictions.

Background checks include employment, criminal history, bankruptcy and disqualified company director and officer checks. In addition, gaming regulators conduct detailed background investigations on Non-Executive Directors and senior executives, requiring them to disclose historical and current personal and financial information and records and participate in interviews. For certain roles, personal appearances

Formust be made (Nevada and Mississippi) and because the formal meetings are predetermined by each regulatory authority, the candidate has very little control of the dates of these appearances and typically require separate overseas trips to attend the appearances.

While spouses are not required to be licensed, they are required to provide certain personal and financial information which will be supplied to gaming regulators; this also applies to all children living with the candidate under the age of 18.

The process for applying for gaming licenses is lengthy, complex and time-consuming and there is an ongoing obligation to keep the regulators notified of any material changes, such as a change of address or purchase of new property within the timeframe required by the regulator. As a result, Non-Executive Directors and certain senior executives are required to provide financial statements and other requested records semi-annually to the Aristocrat licensing team to ensure ongoing regulatory requirements are fulfilled (which includes the renewal of licences and compliance with conditions of their licences).

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