Cleanaway Waste Management : Corporate Governance Statement and Appendix 4G

Cleanaway Waste Management Limited (Cleanaway or the Company) believes that high standards of corporate governance are critical to the achievement of business objectives and, in turn, the creation and protection of shareholders' interests, through effective oversight, risk management and transparency.

The Board of Cleanaway has adopted a range of charters and policies, which enshrine high standards of corporate governance across the Company's operations. Copies of Board and Committee charters and key policies and documents supporting Cleanaway's corporate governance practices are available online at http://www.cleanaway.com.au/for-investors/corporate- governance/. These documents are regularly reviewed by the Board in conjunction with Management to ensure that they continue to reflect any changes in governance practices and the law.

This Corporate Governance Statement was approved by the Board on 22 August 2017 and outlines Cleanaway's key corporate governance practices and related charters and policies as at 30 June 2017 and are consistent with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations - 3rd Edition.

Principle 1: Lay solid foundations for management and oversight

The Cleanaway Board is responsible for the overall stewardship, strategic direction, governance and performance of the Company. The Board operates under a Charter, which sets out its role, powers and responsibilities.

The Board's objectives are to:

• oversee and monitor the strategic direction of Cleanaway and provide effective oversight of its management and business activities;

• optimise Cleanaway's performance so as to create and build sustainable value for shareholders within a framework of appropriate risk assessment and management; and

• seek to ensure Cleanaway acts in accordance with its legal and other obligations.

  The key responsibilities of the Board in support of these objectives as set out in the Charter are as follows:

• oversight of Cleanaway, including its control and accountability systems, that seek to ensure the creation and protection of shareholder value;

• monitoring of Cleanaway's financial position and its ability to meet its debts and other obligations as they fall due;

• promulgating clear standards of ethical behaviour required of Directors, Senior Executives and employees, and encouraging observance of those standards;

• reviewing, ratifying and monitoring systems of risk management, internal compliance and control, codes of conduct and legal compliance;

• ensuring that an appropriate health, safety and environment framework is in place to support safe workplace practices and to comply with Cleanaway's environmental obligations;

• contributing to the development of and final approval of, management's corporate strategy and performance objectives; and

• monitoring the implementation of the strategic plans and performance objectives of Cleanaway and assessing Cleanaway's performance against these.

  Key functions reserved to the Board as set out in the Charter are as follows:

• adopting an annual budget for the financial performance of Cleanaway and monitoring performance against it;

• approving material capital expenditures, acquisitions and divestments and other material transactions;

• approving the Chief Executive Officer's (CEO) terms of engagement and where required, his termination benefits;

• reviewing the remuneration and incentive framework for senior management and all Cleanaway employees;

• approving Cleanaway's annual report and financial reports upon recommendations from the Audit and Risk Committee, and in accordance with the Corporations Act, ASX Listing Rules and any other applicable regulations;

• approving capital management matters, including Cleanaway's dividend policy and authorising payment of dividends;

• ensuring proper and timely financial and governance reporting to shareholders and other stakeholders;

• reviewing on a continuing basis:

  • recruitment, retention and termination policies and procedures for senior management; and

  • executive succession planning (in particular the office of CEO);

• reviewing, at least annually, diversity and inclusion policy, diversity targets, initiatives and progress toward their achievement; and

• monitoring and overseeing the management of shareholder and stakeholder relations.

  The Board has delegated the responsibility of day-to-day management and the performance of Cleanaway and the development and implementation of Board-endorsed strategy to the CEO and Management. This delegation is formally reflected in, and governed by, delegated authority limits, which are regularly reviewed and endorsed by the Board.

  Appointment of Directors and Executive Committee members

  Cleanaway carefully considers the character, experience, education and skill set, as well as interests and associations, of each potential candidate for appointment to the Board and conducts appropriate checks to verify the suitability of the candidate prior to their appointment as a Director.

  Cleanaway has appropriate procedures in place to ensure that material information relevant to a decision to elect or re-elect a Director is disclosed in the notice of meeting provided to shareholders.

  In addition to being set out in the Charter, the roles and responsibilities of Directors are formalised in the letter of appointment, which each Director is required to sign to confirm their appointment.

  Each letter of appointment specifies the term of appointment, time commitment envisaged, expectations in relation to committee work or any other special duties attaching to the position, reporting lines, remuneration arrangements, disclosure obligations in relation to personal interests, confidentiality obligations, insurance and indemnity entitlements and details of the Company's key governance policies.

  Each member of the Executive Committee enters into a service contract with the Company, which sets out the material terms of their employment, including a description of position and duties, reporting lines, remuneration arrangements and termination rights and entitlements.

  Details of contractual entitlements of Executive Committee members who are Key Management Personnel are summarised in the Remuneration Report of the Annual Report.

  Company Secretary

  The Company Secretary is responsible for ensuring that Board policies and procedures are complied with and that governance matters are addressed. The Company Secretary is accountable to the Board, through the Chairperson, on all matters to do with the proper function of the Board.

  Each Director is entitled to access the advice and services of the Company Secretary. The appointment and removal of a Company Secretary is a matter reserved for decision by the Board.

  Diversity and Inclusion

  At Cleanaway, our workforce is made up of people with diverse values, backgrounds, skills, experiences and needs. We value diversity and inclusion and recognise the benefits that it brings to our Company, as well as to us as individual employees within Cleanaway. It also strengthens our connection and care for our customers, the communities we operate within and any other key stakeholders we engage with.

  Cleanaway's Diversity & Inclusion Policy Statement, which can be found at http://www.cleanaway.com.au/about-us/our- people/diversity-and-inclusion/ and the supporting processes are aimed at creating a culture where our employees understand that each individual is unique and that being inclusive and engaging diversely makes us more productive, innovative and competitive. Under this Policy, the Board is responsible for establishing measurable objectives for achieving diversity within Cleanaway and assessing the progress in achieving the targets.

  Performance against these objectives for the period 1 July 2016 - 30 June 2017 is set out below:

  Targets for 30 June 2017	At 30 June 2016	At 30 June 2017
  Increase overall female representation to 21%	19%	19%
  Increase females in management roles to 22%	19%	19%
  Increase females in operational roles to 4.5%	4.4%	5.2%

  We have seen a consistent positive uplift in female participation within operational roles in FY17. The result of 5.2% is specifically contributed to the increase of female drivers, operators and general labourers joining our workforce. This is an 18% improvement compared to the prior year performance result.

  Performance targets around 'overall female participation' and 'females in management roles' have been maintained. Reduced recruitment activities across the Company during the last 12 months have impacted both performance metrics.

  In addition:

• One of our six Non-executive Directors is female (17% representation).

• One of our seven senior Executive Committee members is female (14% representation).

  During the last 12 months, Cleanaway has specifically focussed on laying down the foundation for Diversity & Inclusion. We have developed and implemented Cleanaway's first Reconciliation Action Plan 2017 - 2018 (RAP), endorsed by Reconciliation Australia. Our RAP is available online at http://www.cleanaway.com.au/about-us/our-people/aboriginal-engagement/

  To ensure common engagement across the Company we have established champion Working Groups for our RAP and Diversity & Inclusion. Our Reflect journey as outlined in the RAP is confidently underway. Similarly, we have developed and are implementing a Diversity & Inclusion Engagement Plan 2017 - 2020 (Plan) in support of covering a wider range of inclusive initiatives. The Plan is intended to drive and create a culture that values, encourages and embraces differences and creates opportunities for all employees with the aim making Cleanaway an employer of choice. The Plan consists of five focus areas underpinned by leadership commitment; workforce profile, pay equity, talent management, engagement & retention and diversity awareness. All of which are aligned with Cleanaway's mission of 'Making a sustainable future possible' and the Reconciliation Action Plan of 'Caring for Country'.

  Cleanaway has completed a workplace profile report as required by the Workplace Gender Equality Act 2012 (WGEA) for 2017. A copy of the Company's WGEA report for 2017 is available on the Company's website at http://www.cleanaway.com.au/about- us/our-people/diversity-and-inclusion/

  Performance Evaluation

  The Board considers that reviewing its performance is essential to good governance. Under its Charter, the Board is responsible for undertaking regular reviews of its own performance and that of the Board Committees and individual Directors.

  The review process is designed to help optimise performance by providing a mechanism to raise and resolve issues, and

  to provide recommendations to assist the Board, Board Committees and individual Directors to enhance their effectiveness.

  The Board's performance is externally and internally evaluated from time to time. An internal evaluation of the performance of Board members and Committees was undertaken during the course of the year.

  The Board is responsible for evaluating the performance of the CEO on an annual basis, assessed against Cleanaway's financial performance, business transformation, management development, and enhanced safety and sustainability performance.

  A performance review of the CEO was conducted in relation to his performance for the 2017 financial year. Evaluation details are set out in the Remuneration Report. The CEO conducts performance reviews of the Executive Committee members on an annual basis and reports on their performance to the Remuneration and Nomination Committee.

  Cleanaway has a performance management system that includes a scorecard of individual performance measures and standards. The system includes processes for the setting of objectives and the annual assessment of performance against objectives. The performance of the Executive Committee members was reviewed by the CEO in accordance with the performance management system in July 2017.

  Principle 2: Structure the Board to add value

  Cleanaway's constitution calls for at least three but not more than 10 Directors. As at 30 June 2017, the Board comprised of six independent Non-Executive Directors, and the Chief Executive Officer and Managing Director (the CEO). Martin Hudson retired as Chairman and as a Director of the Company during the year and Mark Chellew succeeded Mr Hudson as Chairman on 30 September 2016. Profiles of current Directors outlining their appointment dates, qualifications, directorships of other listed companies (including those held at any time in the three years immediately before the end of the financial year), experience and expertise are set out in the Annual Report.

  Director Independence

  The Board comprises a majority of independent Non-Executive Directors. The Charter states that a Non-Executive Director is independent if he or she is not a member of management and is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect, his or her capacity to bring independent judgement to bear on issues before the Board and to act in the best interests of Cleanaway and its shareholders generally.

  When determining the independent status of a Non-Executive Director, the Board will take into account the factors relevant to assessing the independence of a director as specified by the ASX Corporate Governance Council, including whether

  that Director:

• is a substantial shareholder of Cleanaway or an officer of, or otherwise associated directly with, a substantial shareholder of Cleanaway;

• is or has been employed in an executive capacity by the Cleanaway Group and there has not been a period of at least three years between ceasing such employment and serving on the Board;

• is or has within the last three years been a Partner, Director or senior employee of a provider of material professional services to the Cleanaway Group;

• is or has been within the last three years in a material business relationship (for example, as a supplier or customer) with the Cleanaway Group, or an officer of, or otherwise associated with, someone with such a relationship;

• has a material contractual relationship with Cleanaway other than as a Director;

• has close family ties with any person who falls within any of the categories described above; or

• has been a Director of Cleanaway for such a period that his or her independence may have been compromised.

  Whether or not a material relationship exists is determined on a case-by-case basis giving consideration to the nature of the relationship and the specific circumstances of the Director. Materiality is considered from the perspective of the Company, the Director, and the person or entity with which the Director has a relationship.

  The Board reviews the independence of Directors before they are appointed, on an annual basis, and at any other time

  where the circumstances of a Director changes such as to require reassessment. The Board has reviewed the independence of each of the Directors in office and has determined that all Non-Executive Directors are independent.

  The independent status of each Director standing for re-election is identified in the notice of Annual General Meeting. If the Board's assessment of a Director's independence changes, the change is disclosed to the market.

  Conflicts of Interest

  Directors are required to keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of Cleanaway. A Director who has an actual or potential conflict of interest or a material personal interest in a matter is required to declare that potential or actual conflict of interest to the Board. If the Board determines that there is a material conflict of interest, the Board may require the relevant director to:

• not receive the relevant papers;

• not be present at the meeting while the matter is considered; and

• not participate in any decision on the matter.

  The Board may resolve to permit a Director to have an involvement in a matter involving a potential or actual conflict of interest. In such instances, the Board will minute full details of the basis of the determination and the nature of the conflict, including a formal resolution concerning the matter.

  Chair of the Board

  The Board Charter requires an independent Non-Executive Director to hold the position of Chairperson, unless the Board otherwise resolves.

  The Chairman, Mark Chellew, is an independent Non-Executive Director. His responsibilities as Chairman are set out in the Board Charter.

  The roles of the Chairman and CEO are not exercised by the same person. The Chairman attends Board Committee meetings in an ex-officio capacity.

  Board Committees

  Under the Company's Constitution and as set out in the Charter, the Board may delegate any of its powers and responsibilities to a committee of the Board to assist it to effectively and efficiently discharge its responsibilities.

  The Board has established the following Committees:

• Audit and Risk Committee;

• Remuneration and Nomination Committee; and

• Health, Safety and Environment Committee.

The Charter of each Committee sets out their respective duties and responsibilities and is available online at http://www.cleanaway.com.au/for-investors/corporate-governance/

Details of Board Committee memberships as at 30 June 2017 are as follows:

Audit and Risk Committee		Remuneration and Nomination Committee	Health, Safety and Environment Committee
M P Chellew - Board Chairman		Member	Member
R M Smith	Chairman
E R Stein	Member	Member
T A Sinclair	Member		Member
R M Harding		Chairman
P G Etienne	Member		Chairman

All Directors are entitled to attend meetings of the Committees where there is no conflict of interest. Papers considered by the Committees, and minutes of each Committee meeting, are provided to all Directors. The proceedings of each Committee meeting are reported at the next Board meeting by the relevant Committee Chair.