Norwood : Corporate Governance Statement (Updated)

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ABN 15 062 959 540

Corporate Governance Statement

OVERVIEW

The Board of Directors (Board) of Norwood Systems Limited (the Company) is responsible for the overall corporate governance of the Company and is committed to implementing the highest standards of corporate governance. In determining what those high standards should involve the Company has considered the Australian Securities Exchange (ASX) Corporate Governance Council's Principles of Good Corporate Governance and Recommendations (4th Edition) (the Principles and Recommendations).

In line with the above, the Board has set out the way forward for the Company in its implementation of the Principles and Recommendations. Due to the current size of the Company and the scale of its operations it is neither practical nor economic for the adoption of all of the Principles and Recommendations. Where the Company has not adhered to the Principles and Recommendations it has stated that fact in this Corporate Governance Statement. This statement is current as at 14 December 2021.

The Company's corporate governance policies are as follows and are all available on the Company's website at https://norwoodsystems.com/investor/investor-documents

• Board Charter
• Code of Conduct
• Audit and Risk Committee Charter
• Remuneration & Nomination Committee Charter
• Continuous Disclosure Policy
• Security Trading Policy
• Risk Management Policy
• Diversity Policy
• Shareholders Communications Strategy
• Anti-Briberyand Anti-Corruption Policy
• Whistleblower Policy
• Social Media Policy
• Performance Evaluation Policy

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Principle / Recommendation	Compliance		Reference	Commentary
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1	Yes		Board Charter,	The Company has adopted a Board Charter, which discloses the specific responsibilities of the Board.
A listed entity should have and disclose a board			Code of Conduct and	The Board is responsible for promoting the success of the Company in a way which ensures that the
charter			Website
		interests of shareholders and stakeholders are promoted and protected. The Board may delegate
setting out:
			some powers and functions to the CEO for the day-to-day management of the Company. Powers and
(a) the respective roles and responsibilities of				functions not delegated remain with the Board. The key responsibilities and functions of the Board
its board and management; and				include the following:
(b) those matters expressly reserved to the				• appointment of the Managing Director/CEO and other senior executives and the determination of
board and those delegated to
			their terms and conditions including remuneration and termination;
management.
			• driving the strategic direction of the Company, ensuring appropriate resources are available to
				meet objectives and monitoring management's performance;
				• reviewing and ratifying systems of risk management and internal compliance and control, codes
				of conduct and legal compliance;
				• approving and monitoring the progress of major capital expenditure, capital management and
				significant acquisitions and divestitures;
				• approving and monitoring the budget and the adequacy and integrity of financial and other
				reporting;
				• approving the annual, half yearly and quarterly accounts;
				• approving significant changes to the organisational structure;
				• approving the issue of any shares, options, equity instruments or other securities in the Company;
				• ensuring a high standard of corporate governance practice and regulatory compliance and
				promoting ethical and responsible decision making;
				• recommending to shareholders the appointment of the external auditor as and when their
				appointment or re-appointment is required to be approved by them; and
				• meeting with the external auditor, at their request, without management being present.
				The Board's role and the Company's corporate governance practices are periodically reviewed and
				improved as required.
				Full details of the roles and responsibilities of the Board and the company secretary of the Company
				(Company Secretary) are contained in the Board Charter.
Recommendation 1.2	Yes		Director Selection Procedure and	Directors of the Company (Directors) are appointed based on the specific governance skills required
A listed entity should:			Website	by the Company. Given the size of the Company and the business that it operates, the Company aims
(a) undertake appropriate checks before				at all times to have at least one Director with experience appropriate to the Company's operations.
appointing a director or senior executive, or				The Company's current directors all have relevant experience in the operations. In addition, Directors

only	Principle / Recommendation	Compliance	Reference	Commentary
putting someone forward for election, as a			should have the relevant blend of personal experience in:
director; and			• Accounting and financial management; and
(b) provide security holders with all material
		• Director-level business experience.
information in its possession relevant to a
decision on whether or not to elect or re-			In respect of any future Directors, the Company will continue to conduct specific and appropriate
elect a director.			checks of candidates prior to their appointment or nomination for election by shareholders. However
			the Company does not propose to conduct these checks prior to nominating an existing Director for
			re-election by shareholders at a general meeting on the basis that it is not considered necessary in the
			Company's circumstances.
			The composition of the Board is assessed annually with due consideration given to ensure each
use				potential candidate had the appropriate experience and strong professional reputation in their
			industry, that would be of value to the Company.
			Currently, the Company includes in its notice of meetings a brief biography which sets out relevant
				qualifications and professional experience, of each Director who stands for election or re-election, for
				consideration by shareholders.
	Recommendation 1.3	Yes	Kept at registered office	The Company seeks to engage or employ its Directors and other senior management under written
	A listed entity should have a written agreement			agreements setting out key terms and otherwise governing their engagement or employment by the
	with each director and senior executive setting			Company.
personalr	out the terms of their appointment.			The Company's CEO and Director is employed pursuant to written agreements with the Company and
			each non-executive Director is engaged under a letter of appointment.
	Recommendation 1.4	Yes	Board Charter	The Company Secretary reports directly, and is accountable, to the Board through the Chairman in
	The company secretary of a listed entity should		And Website	relation to all governance matters.
	be accountable directly to the board, through			Full details of the Board's and Company Secretary's roles and responsibilities are contained in the
	the chair, on all matters to do with the proper
			Board Charter.
	functioning of the board.

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Principle / Recommendation	Compliance	Reference	Commentary
Recommendation 1.5	Yes - 1.5(a),	Diversity Policy and	The Board has adopted a Diversity Policy which is available on the Company's website
A listed entity should:	1.5(b) and	Website	https://norwoodsystems.com/investor/investor-documents.
(a)	have and disclose a diversity policy;	1.5(c)(1) &		The Company is committed to workplace diversity and recognises the benefits arising from employee
(b)	through its board or a committee of the	(2).		and board diversity, including a broader pool of high quality employees, improving employee
	board set measurable objectives for			retention, accessing different perspectives and ideas and benefiting from all available talent. Diversity
	achieving gender diversity in the			includes, but is not limited to, gender, age, ethnicity and cultural background.
	composition of its board, senior executives			The Board is responsible for developing objectives and strategies, if any, to meet the objectives of the
	and workforce generally; and	No - 1.5(c)(3)
(c)	disclose in relation to each reporting period		Diversity Policy and will report at least annually on the progress against and achievement of these
		objectives. The Board may also set measurable objectives for achieving gender diversity. The Board is
	1.	the measurable objectives set for that
			responsible for implementing, monitoring and reporting on any measurable objectives it has set.
		period to achieve;
	2. the entity's progress towards achieving			Given the size of the Company, no measurable objectives or strategies have been set by the Board at
		those objectives; and			this stage.
	3.	either:			However, it is Company practice to recruit from a diverse pool of candidates for all positions,
		i. the respective proportions of men
				including senior management and the Board.
		and women on the board, in senior
				As at the date of this report, the Company has the following proportion of women appointed:
		executive positions and across the
		whole organisation (including how			• to the Board - 0%
		the entity has defined "senior			• to senior management - 0%
		executive" for these purposes); or
				• to the organisation as a whole - 15%
		ii. 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	Yes - 1.6(a)		Whilst it is the policy of the Board to conduct evaluation of its performance through its Board Charter
A listed entity should:			and a Performance Evaluation Policy, the Company did not over the period conduct an evaluation of
(a)	have and disclose a process for periodically	1.6(b) 1		the Board, its committees and individual Directors.
	evaluating the performance of the board, its			1whilst not specifically referenced in the Annual Report it was stated that no remuneration consultants
	committees and individual directors; and			had been engaged and that the board considers that incentive options that have been issued and are
(b)	disclose, in relation to each reporting			a good measure of performance linked to the market price of shares and market capitalisation which
	period, whether a performance evaluation			is considered the best measure of the group's performance.
	was undertaken in the reporting period in
	accordance with that process.
Recommendation 1.7	Yes - 1.7(a)		The Company does have in place a formal processes for evaluation of its senior executives.
A listed entity should:	No - 1.7(b)

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Principle / Recommendation	Compliance	Reference	Commentary
(a) have and disclose a process for periodically			There was no review performance of senior management undertaken during the period.
evaluating the performance of its senior
executives at least once every reporting
period; and
(b) disclose, in relation to each reporting
period, whether a performance evaluation
was undertaken in the reporting period in
accordance with that process.
Principle 2: Structure the board to add value
Recommendation 2.1	Yes - 2.1(b)	Nomination Committee Charter and	Given the present size of the Company, the whole Board acts as the Nomination Committee.
The board of a listed entity should:		Website	The Board believes no efficiencies or other benefits could be gained by establishing a separate
(a) have a nomination committee which:	No - 2.1(a)
	Nomination Committee. To assist the Board to fulfill its function as the Nomination Committee, the
1. has at least three members, a majority			Board has adopted a Nomination Committee Charter. The responsibilities of the Committee include
	of whom are independent directors;			the periodic review and consideration of the structure and balance of the Board and the making of
	and			recommendations regarding appointments, retirements and terms of office of Directors.
2.	is chaired by an independent director,			As a matter of practice, candidates for the office of Director are individually assessed by the Board
and disclose:
		before appointment or nomination to ensure they possess the relevant skills, experience, personal
3.	the charter of the committee;
		attributes and capability to devote the necessary time and commitment to the role.
4. the members of the committee; and
		The Board intends to review the requirement for a separate nomination committee as the Company's
5. as at the end of each reporting period,
	the number of times the committee			operations grow and evolve.
	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 processes it
employs to address board succession issues
and to ensure that the board has the
appropriate balance of skills, knowledge,
experience, independence and diversity to
enable it to discharge its duties and
responsibilities effectively.
Recommendation 2.2	No		The Board does not have, and has not disclosed, a skills matrix setting out the mix of skills and diversity
A listed entity should have and disclose a board			that the board currently has or is looking to achieve in its membership. Owing to the size of the
skills matrix setting out the mix of skills that the			Company and its operations which are expanding, the Board has not considered the need to have a
board currently has or is looking to achieve in its			skills matrix as it considers the Board to have the appropriate skills for the operations and governance
membership.			of the Company. Should the Company's operations expand or change, the Board will re-consider the
				needs for a skills matrix.