Korvest : Corporate Governance Statement June 2022

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Corporate governance statement

This statement outlines the main corporate governance practices in place throughout the financial year, which comply with the ASX Corporate Governance Council recommendations, unless otherwise stated.

Principle 1 - Lay solid foundations for management and oversight

The Board's primary role is the protection and enhancement of long-term shareholder value. The Board believes that good corporate governance is essential to fulfilling its role and that it positively contributes to long-term shareholder value.

The Board delegates responsibility for the day-to-day management of the Group to the Managing Director and senior executives but remains responsible for overseeing the performance of the management team. To ensure that this responsibility is clearly defined, the Board has delegated a range of authorities to management through formal delegations. These include limited expenditure authority along with the limited authority to enter into contracts and engage staff.

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Group. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Group. The Board has the final responsibility for the successful operations of the Group. Without intending to limit this general role of the Board, the specific or principal functions and responsibilities include:

• Acting as an interface between the Group and shareholders;
• Setting the goals of the Group;
• Reviewing the annual progress and performance of the Group in meeting its objectives;
• Providing the overall strategic direction of the Group;
• Determining policies governing the operations of the Group;
• Appointing and approving the terms and conditions of the appointment of the Managing Director (MD);
• Reviewing and providing feedback on the performance of the MD;
• Endorsing the terms and conditions for senior executives reporting to the MD through the Remuneration Committee;
• Establishing and determining the powers and functions of the committees of the Board, including the Audit and the Remuneration Committees;
• Approving major operating plans;
• Approving the annual budget and long-term budgets;
• Board approval of all banking facilities;
• Approving all significant items of capital expenditure;
• Approving all significant operational expenditures outside budget;
• Approving all mergers and acquisitions, and property acquisitions and disposals;
• Approving the issue or cancellation of shares;
• Approving all significant loans to outside parties or employees;
• Approving half-yearly and yearly accounts;
• Keeping the market informed about Korvest in accordance with ASX rules;
• Reviewing its own performance;
• Resolution of major issues of material nature affecting the organisation;
• Approving management reporting processes and documentation;
• Approving all significant contracts, leases and other company commitments; and
• Ensuring that all requirements of the ASX, ASIC, ACCC, ATO and other relevant legislation are met.

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Corporate governance statement

A copy of the Board Governance Charter outlining the roles and responsibilities is available online on the Company's website at www.korvest.com.au/assets/downloads/Board-Governance-Charter.pdf.

Prior to appointing a person as a Director a number of checks are conducted including consultation with referees, police and bankruptcy checks. All current Board members have undergone police and bankruptcy checks. The skills and experience of directors standing for election or re-election are included in the annual report and/or the Notice of Meeting.

The Board has adopted a letter of appointment that contains the terms on which directors will be appointed. The letter of appointment clearly defines the role of directors, including the expectations in terms of remuneration, participation and time commitment. The letter of appointment also makes clear that directors are required to disclose circumstances that may affect, or be perceived to affect, their ability to exercise independent judgment so that the Chairman and the Company Secretary can determine any further action, if necessary.

Senior executives are provided a position description and letter of appointment which outlines the terms of their agreement with the Company. All directors and senior executives sign a Confidentiality Agreement upon appointment.

The specific tasks for the Company Secretary are set out in the Board Governance Charter, concerning all matters to do with the proper functioning of the board.

Diversity Policy

Korvest is committed to creating a diverse workplace that is fair and flexible, promotes personal and professional growth and enables employees to enhance their contribution to Korvest by drawing from their different backgrounds, beliefs and experiences. Korvest has developed a diversity policy, a copy of which can be found on the Company's website page at www.korvest.com.au/assets/downloads/KC19-4-Diversity-and-Inclusion-Policy.pdf

The policy provides guidance for the development and implementation of relevant plans, programs and initiatives to recognise and promote gender workforce diversity across all areas of the Korvest business.

The Korvest Board is responsible for setting specific gender diversity objectives and a range of metrics designed to measure the achievement of those objectives.

The Board is responsible for assessing, on an annual basis, the objectives and the progress of the achievement against Korvest's gender diversity objectives. In accordance with this policy and the ASX Corporate Governance Principles, the Board has established the following objectives in relation to gender diversity. The aim is to achieve these objectives as positions become vacant and appropriately skilled candidates are available.

	Objective	Actual
	%	Number		%
Number of females in senior management	40%	5		28%
positions
Number of females in administration/sales	50%	21		58%
positions
Number of female employees in the whole	20%	32		15%
organisation

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Corporate governance statement

The Company has lodged the annual report required under the Workplace Gender Equality Act 2012 and a copy of the report is available online on the Company's website page at www.korvest.com.au/assets/downloads/Workplace-Gender-Equality-Report-2021-22.pdf

Board performance

The Company's Board formally reviews the operations of the Board and its committees and the performance of its individual directors. The approach is to facilitate an assessment of the Board and its committees at least every two years. A review was undertaken during FY22.

Executive performance

The Managing Director reviews the performance of senior executives regularly via a formal performance management process. The executives are assessed on their performance against specified performance objectives. During the reporting period each senior executive has undertaken this process with the Managing Director. The Managing Director's performance is reviewed annually by the Chairman and a review was undertaken during the reporting period.

Principle 2 - Structure the Board to add value

Nomination Committee

The Board has established a Nomination Committee comprising all of the non-executive directors of the Company. The Committee meets on a needs basis. The Nomination Committee Charter is disclosed on the Company's website at www.korvest.com.au/assets/downloads/Nomination-Committee-Charter.pdf

Board composition

The Company constitution allows for a maximum of ten directors. The Company Board currently comprises six directors, four being independent non-executive directors plus the Managing Director and Finance Director. The directors come from a variety of business and professional backgrounds and bring to the Board a range of skills and experience relevant to the Company.

Board Skills Matrix

The Board has a skills matrix covering the following key areas of knowledge or experience: Executive leadership

Governance

Strategy/Risk Finance (Accounting) Remuneration Mergers/Acquisitions Marketing Engineering Industrial Markets

Health, safety and environment Listed entities

The Board is comfortable that the skills and experience of the current Directors satisfy the requirements of the skills matrix.

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Corporate governance statement

Board independence

The Board consist of six directors, four of whom are independent, non-executive directors.

The Board believes that the first priority in the selection of directors is their ability to add value to the Board and enhance the performance while safeguarding shareholders' interests. Accordingly, relevant expertise and competence is considered as important as technical independence.

The skills, experience and tenure of each director is set out in the Director's report of the annual report.

The Board has assessed all the relationships between the Company and external organisations in which the independent directors hold or held positions and does not believe there to be any dealings which will materially interfere with their ability to act in the best interests of the Company.

The role of the Chairman

ASX recommendation 2.5 states that the chair should be an independent director. The Company complies with this recommendation as Mr Graeme Billings (resigned 31 August 2021) and Mr Andrew Stobart (appointed as Chairman, 31 August 2021) are independent directors.

The roles of Chairman and CEO are not held by the same person with Mr Chris Hartwig being the Managing Director and CEO for the Company.

Director induction and development

The Board has a process for the induction of new directors to ensure they are provided with the information required to properly perform their role. Primarily this involves meeting with management and existing directors to understand Korvest's business operations, history and key risks. The Board also has access to senior executives, who are invited to attend Board meetings on a needs basis, where they make presentations and engage in discussions with Directors, answer questions and provide input and perspective on their areas of responsibility so as to ensure that all Directors are appropriately informed in relation to the operations of the Group.

Directors are briefed on significant changes to legislative and compliance (including accounting standards) as they occur. In addition, there is a regular and ongoing review to identify any need for professional development for existing directors to ensure that they maintain the appropriate skills and knowledge to perform their role effectively.

Board operations

During FY22 the Board met 16 times and the directors' attendance at those meetings is set out in the annual report. The directors receive a comprehensive Board pack, which includes financial statements and executive reports. The Chairman and the Managing Director communicate regularly between Board meetings.

All directors have unrestricted access to company records, information and personnel and the Board has a policy of allowing individual directors to seek independent professional advice at the Company's expense, subject to the approval of cost by the Chairman. Such approval shall not be unreasonably withheld.

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Corporate governance statement

Principle 3 - Act ethically and responsibly

While the Board has adopted those ASX principles of good corporate governance that it has deemed pertinent, it believes that these types of rules and regulations are of limited value unless supported by a foundation of honesty and integrity.

The Board has adopted a formal (written) Code of Conduct for Korvest, effectively a corporate creed that is best applied by asking "What is the right thing to do?" The code applies to all employees within the Company from the Board, through management to all other staff. The code encourages all staff and other stakeholders to report any breaches of the code to their manager, Finance Director, Managing Director or the Chairman of the Audit Committee, who are required to investigate and report on all such matters.

The Code of Conduct is supported by more detailed policies setting out the philosophy of the Company in relation to its various stakeholders. A copy of the code is available online on the Company's website page at www.korvest.com.au/assets/downloads/Code-of-Conduct.pdf.

The Company has defined values and these are disclosed on the company website at https://www.korvest.com.au/about-us/values/.

The Board has adopted a whistleblower policy and an anti-bribery and corruption policy and these are disclosed on the company website at https://www.korvest.com.au/assets/downloads/Korvest- Whistleblower.pdfand https://www.korvest.com.au/assets/downloads/Anti-Bribery-and-Corruption-Policy.pdf.

Principle 4 - Safeguard integrity in corporate reporting

Audit Committee

The Board has an Audit Committee. The committee has a Board approved charter setting out its role, responsibilities, structure and membership requirements. A copy of its charter can be found online on the Company's website at www.korvest.com.au/assets/downloads/Audit-Committee-Charter.pdf.

The committee consists of four independent non-executive directors. The Chairman of the committee is an independent director who is not the Chairman of the Board. The Managing Director, Finance Director and external auditors are invited to attend the committee meetings where appropriate. Details of membership and attendance at committee meetings are set out in the 2022 Annual Report.

Commitment to financial integrity

The Board has policies designed to ensure that the Company's financial reports meet high standards of disclosure and provide the information necessary to understand the Company's financial performance and position. The policies require that the Managing Director and Finance Director provide to the Board prior to the Board approving the annual and half-year accounts, a written statement that the accounts present a true and fair view, in all material respects, of the Company's financial performance and position and are in accordance with relevant accounting standards, laws and regulations.

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