Corporate Governance Statement

LawFinance Limited (ACN 088 749 008)

The board of the Company ("Board") recognises the importance of establishing a comprehensive system of control and accountability as the basis for the administration of corporate governance.

To the extent relevant and practical, the Company has adopted a corporate governance framework that is consistent with The Corporate Governance Principles and Recommendations (4th Edition) as published by ASX Corporate Governance Council ("Recommendations").

The Board has adopted the following suite of corporate governance policies and procedures which are available on the Company's website at https://www.lawfinance.com.au/investor-centre/governance/.

  • Code of Conduct
  • Audit and Risk Committee Charter
  • Remuneration and Nomination Committee Charter
  • Continuous Disclosure Policy
  • Securities Trading Policy
  • Complaints Policy
  • Conflicts Management Policy
  • Privacy Policy

The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.

The Company is pleased to report that its practices are largely consistent with the Recommendations of the ASX Corporate Governance Council and sets out below its compliance and departures from the Recommendations for the year ended 31 December 2020.

In the context of the Company's nature, scale and operations, the Board considers that the current corporate governance regime is an efficient, practical and cost-effective method of directing and managing the Company. As the Company's activities develop in size, nature and scope, the implementation of additional corporate governance policies and structures will be reviewed and considered.

PRINCIPLES AND RECOMMENDATIONS

COMPLY

EXPLANATION

(YES/NO)

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1

The Board is responsible for the corporate

A listed entity should have and disclose a board

governance of the Company.

charter setting out:

(a)

the respective roles and responsibilities of

YES

The Company has adopted a Board Charter which

its board and management; and

sets out, amongst other things, the specific

(b)

those matters expressly reserved to the

YES

responsibilities of the Board, the roles and

board and those delegated to

responsibilities of the Chairman, Board and

management.

management, as well as the matters expressly

reserved for the decision of the Board and those

delegated to management.

A copy of the Company's Board Charter is available

on the Company's website:

https://www.lawfinance.com.au/investor-

centre/governance/

The Company is committed to the circulation of

relevant materials to Directors in a timely manner to

facilitate Directors' participation in Board discussions

on a fully informed basis.

It is expected that the division of responsibility of the

Board and senior executives will vary with the

evolution of the Company.

PRINCIPLES AND RECOMMENDATIONS

COMPLY

EXPLANATION

(YES/NO)

The Company intends to regularly review the balance

of responsibilities between the Board and

management to ensure that the division of functions

remains appropriate to the needs of the Company.

Recommendation 1.2

The Remuneration and Nomination Committee's role

A listed entity should:

includes identifying and recommending candidates

(a)

undertake appropriate checks before

YES

for the Board to the Board. These recommendations

will occur after considering the necessary and

appointing a director or senior executive,

desirable competencies of new Board members, the

or putting someone forward for election,

range of and depth of skills and the diversity of the

as a Director; and

YES

Board, and making appropriate checks as to the

(b)

provide security holders with all material

character, experience, education, criminal record and

information relevant to a decision on

bankruptcy history of the candidate being put

whether or not to elect or re-elect a

forward. In the absence of the Committee

Director.

undertaking this role, it may be undertaken by the

Board.

All material information relevant to a decision on

whether to elect or re-elect a Director will be provided

to security holders in any notice of meeting pursuant

to which the resolution to elect or re-elect such

Director will be voted on.

Recommendation 1.3

Each Director and senior executive of the Company

A listed entity should have a written agreement

YES

is party to a written agreement with the Company

with each Director and senior executive setting

which sets out the terms and conditions of that

out the terms of their appointment.

Director's or senior executive's appointment.

Recommendation 1.4

The company secretary of a listed entity should

YES

The Board Charter outlines the role, responsibility

be accountable directly to the board, through the

and accountability of the Company Secretary. The

chair, on all matters to do with the proper

Company Secretary is accountable directly to the

functioning of the board.

Board, through the Chair, on all matters relating to

the proper functioning of the Board. The Chairman

and the Company Secretary co-ordinate the Board

agenda.

A copy of the Company's Board Charter is available

on the Company's website:

https://www.lawfinance.com.au/investor-

centre/governance/

Recommendation 1.5

Given its current size and stage of development, the

A listed entity should:

Company has not found it necessary to create a

(a)

have and disclose a diversity policy;

NO

formal diversity policy or to annually report on

measurable objectives with respect to achieving

(b)

through its board or a committee of the

NO

gender diversity or diversity generally. However, the

board set measurable objectives for

Company has and continues to remain committed to

achieving gender diversity in the

ideals of diversity throughout its business practices.

composition of its board, senior

executives and workforce generally; and

(c)

disclose in relation to each reporting

NO

As the Company continues to grow, the Board

period:

intends to review its practices and, if deemed

1) the measurable objectives set for

necessary in the future, the Board may consider

that period to achieve gender

adopting a formal diversity policy.

diversity;

2) the entity's progress towards

achieving those objectives; and

3) either:

PRINCIPLES AND RECOMMENDATIONS

COMPLY

EXPLANATION

(YES/NO)

(A) the respective proportions of

men and women on the board, in

senior executive positions and

across the whole workforce

(including how the entity has

defined "senior executive" for these

purposes); or

(B) if the entity is a "relevant

employer" under the Workplace

Gender Equality Act, the entity's

most recent "Gender Equality

Indicators", as defined in and

published under that Act.

Recommendation 1.6

The performance of the Board as a group

A listed entity should:

and of individual Directors is to be assessed

(a)

have and disclose a process for

YES

each year through a process as determined

periodically evaluating the performance of

by the Board at its discretion.

the board, its committees and individual

Directors; and

YES

In particular, all Directors seeking re-election

(b)

disclose for each reporting period,

whether a performance evaluation has

at an annual general meeting will be subject

been undertaken in the reporting period in

to a formal performance appraisal to

accordance with that process during or in

determine whether the Board (with the

respect of that period.

Director absenting themselves) recommend

their re-election to shareholders.

The Company did not undertake an evaluation of the

performance of the Board, its committees and

individual directors during the financial year ended 31

December 2020.

Recommendation 1.7

The Board and senior management team will

A listed entity should:

regularly review the performance of its senior

(a)

have and disclose a process for

YES

executives and address any issues that may emerge

periodically evaluating the performance of

through a process as determined by the Board or

its senior executives at least once every

YES

senior management team, at their discretion.

reporting period; and

(b)

disclose in relation to each reporting

The Company undertook an evaluation of the

period, whether a performance evaluation

performance of its senior executives during the

has been undertaken in the reporting

financial year ended 31 December 2020.

period in accordance with that process

during or in respect of that period.

PRINCIPLES AND RECOMMENDATIONS

COMPLY

EXPLANATION

(YES/NO)

Principle 2: Structure the board to be effective and add value

Recommendation 2.1

The Company has a remuneration and nomination

The board of a listed entity should:

committee (Remuneration and Nomination

(a)

have a nomination committee which:

Committee), which currently does not have at least

three members, a majority of whom are independent

(i)

has at least three members, a

NO

directors. Considering the size of the Company and

majority of whom are independent

that the full board comprises four directors, the

Directors; and

NO

Company considers that it is not appropriate to

(ii)

is chaired by an independent

strictly follow the Principles and Recommendations.

Director,

and disclose:

YES

(iii)

the charter of the committee;

A copy of the Company's Remuneration and

(iv)

the members of the committee;

NO

Nomination Committee Charter is available on the

and

Company's website:

(v)

as at the end of each reporting

NO

https://www.lawfinance.com.au/investor-

period, the number of times the

centre/governance/

committee met throughout the

period and the individual

attendances of the members at

those meetings; or

(b)

if it does not have a nomination

committee, disclose that fact and the

N/A

processes it employs to address board

succession issues and to ensure that the

board has the appropriate balance of

skills, experience, independence and

knowledge of the entity to enable it to

discharge its duties and responsibilities

effectively.

Recommendation 2.2

NO

The Board strives to ensure that it is comprised of

A listed entity should have and disclose a board

directors with a blend of skills, experience and

skill matrix setting out the mix of skills and

attributes appropriate for the Company and its

diversity that the board currently has or is looking

business.

to achieve in its membership.

However, the Board is of the belief that a Board Skills

Matrix is not required given the stage of development

of the business. The Board will continue to monitor

whether it will be appropriate for the company to

adopt a Board Skills Matrix as the Company

continues to develop.

Recommendation 2.3

NO

Given its current size and stage of development, the

A listed entity should disclose:

Company has not found it necessary to disclose the

(a)

the names of the Directors considered by

names of directors considered by the Board to be

independent Directors. However, the Company has

the board to be independent Directors;

disclosed details of each director, including their

(b)

if a Director has an interest, position,

length of service, in the 2020 Annual Report

association or relationship of the type

described in Box 2.3 of the ASX

Corporate Governance Principles and

As the Company continues to grow, the Board will

Recommendation (3rd Edition), but the

consider whether it is appropriate to appoint

board is of the opinion that it does not

additional independent director/s to the Board.

compromise the independence of the

Director, the nature of the interest,

position, association or relationship in

question and an explanation of why the

board is of that opinion; and

(c)

the length of service of each Director

PRINCIPLES AND RECOMMENDATIONS

COMPLY

EXPLANATION

(YES/NO)

Recommendation 2.4

NO

Given its current size and stage of development, the

A majority of the board of a listed entity should

Company has not found it necessary for the Board to

be Independent Directors.

comprise of a majority of independent directors.

As the Company continues to grow, the Board will

consider whether it is appropriate to appoint

additional independent director/s to the Board.

Recommendation 2.5

YES

The Board's current Chairman, Mr Tim Storey is a

The chair of the board of a listed entity should be

non-executive Director. Mr Storey satisfies the ASX

an Independent Director and, in particular,

Corporate Governance Principles and

should not be the same person as the CEO of

Recommendations definition of an independent

the entity.

director because he was not an executive of the

Company within the last three years. Mr Storey

brings an independent judgement to bear on issues

before the Board.

Mr Daniel Kleijn is the Chief Executive Officer of the

Company.

Recommendation 2.6

YES

Each new Director of the Company will, upon

A listed entity should have a program for

appointment, participate in an induction program.

inducting new Directors and for periodically

This will include meeting with members of the

reviewing whether there is a need for existing

existing Board, Company Secretary, management

directors to undertake professional development

and other relevant executives to familiarise

to maintain the skills and knowledge needed to

themselves with the Company, its procedures and

perform their role as a Director effectively.

prudential requirements, and Board practices and

procedures.

All Directors are encouraged to undergo continual

professional development and, subject to prior

approval by the Chairman, all Directors may have

access to various resources and professional

development training to address any skills gaps.

Principle 3: Instil a Culture of acting Lawfully, Ethically and Responsibly

Recommendation 3.1

NO

The Company does not currently have a formal

A listed entity should articulate and disclose its

statement of values.

values

Recommendation 3.2

YES

The Board is committed to the establishment and

A listed entity should:

maintenance of appropriate ethical standards in

(a)

have and disclose a code of conduct for

order to instil confidence in both clients and the

community in the way the Company conducts its

its Directors, senior executives and

business.

employees; and

(b)

ensure that the board or a committee of

the board is informed of any material

The Company has adopted a Code of Conduct which

breaches of that code.

applies to Directors, employees and contractors of

the Company. A copy of the Company's Code of

Conduct is available on the Company's website:

https://www.lawfinance.com.au/investor-

centre/governance/

The Board is informed of any material breaches of

the Code of Conduct.

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Lawfinance Ltd. published this content on 31 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2021 13:15:07 UTC.