Appendix 4G and Corporate Governance Statement

Page 1
Rules 4.7.3 and 4.10.3
1

Appendix 4G


Key to Disclosures
Corporate Governance Council Principles and Recommendations



Name of entity:
Michael Hill International Limited

ABN / ARBN: Financial year ended:
25 610 937 598 30 June 2018

Our corporate governance statement
2
for the above period above can be found at:
3

☐
These pages of our annual report:
☒
This URL on our website:
investor.michaelhill.com

The Corporate Governance Statement is accurate and up to date as at 20 September 2018 and has been approved by
the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 26 September 2018
Name of Director or Secretary authorising
lodgement:
Katherine Hammond, Company Secretary


1
Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.
Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate
governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The
corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate
Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate
governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not
following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.
Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must
lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance
statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.
2
“Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the
extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.
3
Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s
corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.
Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just
retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can
also, if you wish, delete the “OR” at the end of the selection.

Page
2
ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT
AND OVERSIGHT
1.1
A listed entity should disclose: (a) the respective roles and responsibilities of it
s board and
management; and
(b) those matters expressly reserved to the board a
nd those
delegated to management.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
☒
in the Directors’ Report contained in our 2018 Ann
ual Report at
http://investor.michaelhill.com/financial-reports/a
nnual-reports

... and information about the respective roles and re
sponsibilities of
our board and management (including those matters e
xpressly
reserved to the board and those delegated to manage
ment):
☒
in our Corporate Governance Charter at
investor.michaelhill.com

☒
in our Corporate Governance Statement

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

1.2
A listed entity should: (a) undertake appropriate checks before appointing
a person, or
putting forward to security holders a candidate for
election,
as a director; and
(b) provide security holders with all material info
rmation in its
possession relevant to a decision on whether or not
to elect
or re-elect a director.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
☒
in our Notice of 2018 AGM
http://investor.michaelhill.com/events/shareholders
-meetings

(available from September 2018)

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

1.3
A listed entity should have a written agreement wit
h each director
and senior executive setting out the terms of their
appointment.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☒
in the Remuneration Report contained in our 2018
Annual
Report at
http://investor.michaelhill.com/financial-
reports/annual-reports

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this recom
mendation
is therefore not applicable

1.4
The company secretary of a listed entity should be
accountable
directly to the board, through the chair, on all ma
tters to do with the
proper functioning of the board.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☒
in our Corporate Governance Charter at
investor.michaelhill.com

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

4

If you have followed all of the Council’s recommend
ations in full for the whole of the period above, y
ou can, if you wish, delete this column from the fo
rm and re-format it.

Page
3
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

1.5
A listed entity should:
(a) have a diversity policy which includes requirem
ents for the
board or a relevant committee of the board to set measurable objectives for achieving gender diversit
y and to
assess annually both the objectives and the entity’
s progress
in achieving them;
(b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period
the
measurable objectives for achieving gender diversit
y set by
the board or a relevant committee of the board in a
ccordance
with the entity’s diversity policy and its progress
towards
achieving them and either: (1) the respective proportions of men and women on
the
board, in senior executive positions and across the

whole organisation (including how the entity has de
fined
“senior executive” for these purposes); or
(2) if the entity is a “relevant employer” under th
e Workplace
Gender Equality Act, the entity’s most recent “Gend
er
Equality Indicators”, as defined in and published u
nder
that Act.
... the fact that we have a diversity policy that com
plies with
paragraph (a):
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]
... and a copy of our diversity policy or a summary o
f it:
☒
in our Corporate Governance Charter at
investor.michaelhill.com


... and the measurable objectives for achieving gende
r diversity set by
the board or a relevant committee of the board in a
ccordance with our
diversity policy and our progress towards achieving
them:
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

... and the information referred to in paragraphs (c)
(1) or (2):
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

1.6
A listed entity should:
(a) have and disclose a process for periodically ev
aluating the
performance of the board, its committees and indivi
dual
directors; and
(b) disclose, in relation to each reporting period,
whether a
performance evaluation was undertaken in the report
ing
period in accordance with that process.
... the evaluation process referred to in paragraph (
a):
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

... and the information referred to in paragraph (b):

☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

Page
4
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

1.7
A listed entity should:
(a) have and disclose a process for periodically ev
aluating the
performance of its senior executives; and
(b) disclose, in relation to each reporting period,
whether a
performance evaluation was undertaken in the report
ing
period in accordance with that process.
... the evaluation process referred to in paragraph (
a):
☒
in our Corporate Governance Statement
OR
☒
in the Remuneration Report contained in our 2018
Annual
Report at
http://investor.michaelhill.com/financial-
reports/annual-reports

... and the information referred to in paragraph (b):

☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

Page
5
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE 2.1
The board of a listed entity should: (a) have a nomination committee which:
(1) has at least three members, a majority of whom
are
independent directors; and
(2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the num
ber of
times the 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, dis
close 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, experienc
e,
independence and diversity to enable it to discharg
e its
duties and responsibilities effectively.
[If the entity complies with paragraph (a):] ... the fact that we have a nomination committee that
complies with
paragraphs (1) and (2):
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

... and a copy of the charter of the committee: ☐
at [
insert location
]
... and the information referred to in paragraphs (4)
and (5):
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

[If the entity complies with paragraph (b):] ... the fact that we do not have a nomination committ
ee and the
processes we employ to address board succession iss
ues and to
ensure that the board has the appropriate balance o
f skills,
knowledge, experience, independence and diversity t
o enable it to
discharge its duties and responsibilities effective
ly:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

2.2
A listed entity should have and disclose a board sk
ills matrix
setting out the mix of skills and diversity that th
e board currently
has or is looking to achieve in its membership.
... our board skills matrix:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

Page
6
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

2.3
A listed entity should disclose:
(a) the names of the directors considered by the bo
ard to be
independent directors;
(b) if a director has an interest, position, associ
ation or
relationship of the type described in Box 2.3 but t
he board
is of the opinion that it does not compromise the independence of the director, the nature of the int
erest,
position, association or relationship in question a
nd an
explanation of why the board is of that opinion; an
d
(c) the length of service of each director.
... the names of the directors considered by the boar
d to be
independent directors:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

... and, where applicable, the information referred t
o in paragraph (b):
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]
... and the length of service of each director:
☒
in our Corporate Governance Statement
☒
in the Directors’ Report contained in our 2018 An
nual Report at
http://investor.michaelhill.com/financial-reports/a
nnual-reports


☐
an explanation why that is so in our Corporate Go
vernance
Statement

2.4
A majority of the board of a listed entity should b
e independent
directors.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this recom
mendation
is therefore not applicable

2.5
The chair of the board of a listed entity should be
an independent
director and, in particular, should not be the same
person as the
CEO of the entity.
... the fact that we follow this recommendation:
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☒
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this recom
mendation
is therefore not applicable

2.6
A listed entity should have a program for inducting
new directors
and provide appropriate professional development op
portunities
for directors to develop and maintain the skills an
d knowledge
needed to perform their role as directors effective
ly.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY 3.1
A listed entity should:
(a) have a code of conduct for its directors, senio
r executives
and employees; and
(b) disclose that code or a summary of it.
... our code of conduct or a summary of it:
☒
in our Corporate Governance Statement
☒
in our Corporate Governance Charter at
investor.michaelhill.com

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page
7
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPO
RTING
4.1
The board of a listed entity should: (a) have an audit committee which:
(1) has at least three members, all of whom are non
-
executive directors and a majority of whom are independent directors; and
(2) is chaired by an independent director, who is n
ot the
chair of the board,
and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of t
he
members of the committee; and
(5) in relation to each reporting period, the numbe
r of
times the committee met throughout the period and the individual attendances of the members at those meetings; or
(b) if it does not have an audit committee, disclos
e that fact
and the processes it employs that independently ver
ify and
safeguard the integrity of its corporate reporting,
including
the processes for the appointment and removal of th
e
external auditor and the rotation of the audit enga
gement
partner.
[If the entity complies with paragraph (a):] ... the fact that we have an audit committee that com
plies with
paragraphs (1) and (2):
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]
... and a copy of the charter of the committee:
☒
in our Corporate Governance Charter at
investor.michaelhill.com

... and the information referred to in paragraphs (4)
and (5):
☒
in our Corporate Governance Statement
☒
in the Directors’ Report contained in our 2018 An
nual Report at
http://investor.michaelhill.com/financial-reports/a
nnual-reports

[If the entity complies with paragraph (b):] ... the fact that we do not have an audit committee a
nd the processes
we employ that independently verify and safeguard t
he integrity of our
corporate reporting, including the processes for th
e appointment and
removal of the external auditor and the rotation of
the audit
engagement partner:
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]
☐
an explanation why that is so in our Corporate Go
vernance
Statement

4.2
The board of a listed entity should, before it appr
oves the entity’s
financial statements for a financial period, receiv
e from its CEO
and CFO a declaration that, in their opinion, the f
inancial records
of the entity have been properly maintained and tha
t the financial
statements comply with the appropriate accounting s
tandards
and give a true and fair view of the financial posi
tion and
performance of the entity and that the opinion has
been formed
on the basis of a sound system of risk management a
nd internal
control which is operating effectively.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page
8
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

4.3
A listed entity that has an AGM should ensure that
its external
auditor attends its AGM and is available to answer
questions
from security holders relevant to the audit.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement

☒
in our Notice of 2018 AGM
http://investor.michaelhill.com/events/shareholders
-meetings

(available from September 2018)

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity that does not
hold an
annual general meeting and this recommendation is t
herefore
not applicable

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE 5.1
A listed entity should:
(a) have a written policy for complying with its co
ntinuous
disclosure obligations under the Listing Rules; and

(b) disclose that policy or a summary of it.
... our continuous disclosure compliance policy or a
summary of it:
☒
in our Corporate Governance Statement
OR

☒
in our Corporate Governance Charter at
investor.michaelhill.com

☐
an explanation why that is so in our Corporate Go
vernance
Statement

PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDER
S
6.1
A listed entity should provide information about it
self and its
governance to investors via its website.
... information about us and our governance on our we
bsite:
☒
at
investor.michaelhill.com

☐
an explanation why that is so in our Corporate Go
vernance
Statement

6.2
A listed entity should design and implement an inve
stor relations
program to facilitate effective two-way communicati
on with
investors.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

6.3
A listed entity should disclose the policies and pr
ocesses it has in
place to facilitate and encourage participation at
meetings of
security holders.
... our policies and processes for facilitating and e
ncouraging
participation at meetings of security holders:
☒
in our Corporate Governance Statement
☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity that does not
hold
periodic meetings of security holders and this reco
mmendation
is therefore not applicable

6.4
A listed entity should give security holders the op
tion to receive
communications from, and send communications to, th
e entity
and its security registry electronically.
... the fact that we follow this recommendation:
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page
9
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

PRINCIPLE 7 – RECOGNISE AND MANAGE RISK 7.1
The board of a listed entity should: (a) have a committee or committees to oversee risk,
each of
which: (1) has at least three members, a majority of whom
are
independent directors; and
(2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the num
ber of
times the committee met throughout the period and the individual attendances of the members at those meetings; or
(b) if it does not have a risk committee or committ
ees that
satisfy (a) above, disclose that fact and the proce
sses it
employs for overseeing the entity’s risk management

framework.
[If the entity complies with paragraph (a):] ... the fact that we have a committee or committees t
o oversee risk
that comply with paragraphs (1) and (2):
☒
in our Corporate Governance Statement
OR
☐
at [
insert location
]

... and a copy of the charter of the committee: ☒
in our Corporate Governance Charter at
investor.michaelhill.com

... and the information referred to in paragraphs (4)
and (5):
☒
in our Corporate Governance Statement
OR

☒
in the Directors’ Report contained in our 2018 An
nual Report at
http://investor.michaelhill.com/financial-reports/a
nnual-reports

[If the entity complies with paragraph (b):] ... the fact that we do not have a risk committee or
committees that
satisfy (a) and the processes we employ for oversee
ing our risk
management framework:
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

7.2
The board or a committee of the board should: (a) review the entity’s risk management framework a
t least
annually to satisfy itself that it continues to be
sound; and
(b) disclose, in relation to each reporting period,
whether such
a review has taken place.
... the fact that board or a committee of the board r
eviews the entity’s
risk management framework at least annually to sati
sfy itself that it
continues to be sound:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]
... and that such a review has taken place in the rep
orting period
covered by this Appendix 4G:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page
10
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the f
unction is
structured and what role it performs; or
(b) if it does not have an internal audit function,
that fact and
the processes it employs for evaluating and continu
ally
improving the effectiveness of its risk management
and
internal control processes.
[If the entity complies with paragraph (a):] ... how our internal audit function is structured and
what role it
performs:
☒
in our Corporate Governance Statement
OR

☐
at [
insert location
]
[If the entity complies with paragraph (b):] ... the fact that we do not have an internal audit fu
nction and the
processes we employ for evaluating and continually
improving the
effectiveness of our risk management and internal c
ontrol processes:
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

7.4
A listed entity should disclose whether it has any
material
exposure to economic, environmental and social sust
ainability
risks and, if it does, how it manages or intends to
manage those
risks.
... whether we have any material exposure to economic
,
environmental and social sustainability risks and,
if we do, how we
manage or intend to manage those risks:
☒
in our Corporate Governance Statement

☒
in our 2018 Annual Report at
http://investor.michaelhill.com/financial
reports/annual-reports

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page
11
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY 8.1
The board of a listed entity should: (a) have a remuneration committee which:
(1) has at least three members, a majority of whom
are
independent directors; and
(2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the num
ber of
times the committee met throughout the period and the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, d
isclose that
fact and the processes it employs for setting the l
evel and
composition of remuneration for directors and senio
r
executives and ensuring that such remuneration is appropriate and not excessive.
[If the entity complies with paragraph (a):] ... the fact that we have a remuneration committee th
at complies with
paragraphs (1) and (2):
☒
in our Corporate Governance Statement
☐
at [
insert location
]

... and a copy of the charter of the committee: ☒
in our Corporate Governance Charter at
investor.michaelhill.com

... and the information referred to in paragraphs (4)
and (5):
☒
in our Corporate Governance Statement
OR
☒
in the Directors’ Report contained in our 2018 An
nual Report at
http://investor.michaelhill.com/financial-reports/a
nnual-reports

[If the entity complies with paragraph (b):] ... the fact that we do not have a remuneration commi
ttee and the
processes we employ for setting the level and compo
sition of
remuneration for directors and senior executives an
d ensuring that
such remuneration is appropriate and not excessive:

☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐

we are an externally managed entity and this recomm
endation is
therefore not applicable

8.2
A listed entity should separately disclose its poli
cies and
practices regarding the remuneration of non-executi
ve directors
and the remuneration of executive directors and oth
er senior
executives.
... separately our remuneration policies and practice
s regarding the
remuneration of non-executive directors and the rem
uneration of
executive directors and other senior executives:
☒
in our Corporate Governance Statement
☒
in the Remuneration Report which is contained in
our 2018
Annual Report at
http://investor.michaelhill.com/financial-
reports/annual-reports

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

Page
12
Corporate Governance Council recommendation
We have
followed the recommendation in full for the whole
of the
period above. We have disclosed ...
We have NOT followed the recommendation in full for
the whole
of the period above. We have disclosed ...
4

8.3
A listed entity which has an equity-based remunerat
ion scheme
should: (a) have a policy on whether participants are permi
tted to
enter into transactions (whether through the use of

derivatives or otherwise) which limit the economic
risk of
participating in the scheme; and
(b) disclose that policy or a summary of it.
... our policy on this issue or a summary of it:
☒
in our Corporate Governance Statement
☒
in our Trading Policy contained in the Corporate
Governance
Charter at
investor.michaelhill.com

☐
an explanation why that is so in our Corporate Go
vernance
Statement
OR

☐
w e do not have an equity-based remuneration sche
me and this
recommendation is therefore not applicable
OR

☐
we are an externally managed entity and this reco
mmendation
is therefore not applicable

ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MAN
AGED LISTED ENTITIES
-
Alternative to Recommendation 1.1 for externally ma
naged listed
entities: The responsible entity of an externally managed lis
ted entity
should disclose: (a) the arrangements between the responsible entity
and the
listed entity for managing the affairs of the liste
d entity;
(b) the role and responsibility of the board of the
responsible
entity for overseeing those arrangements.

... the information referred to in paragraphs (a) and
(b):
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

-
Alternative to Recommendations 8.1, 8.2 and 8.3 for
externally
managed listed entities:
An externally managed listed entity should clearly
disclose the
terms governing the remuneration of the manager.

... the terms governing our remuneration as manager o
f the entity:
☐
in our Corporate Governance Statement
OR

☐
at [
insert location
]

☐
an explanation why that is so in our Corporate Go
vernance
Statement

Page 13
2018 Corporate Governance Statement
Michael Hill International Limited (“Company”) and the board of directors of the Company (“Directors”
or “Board”) are committed to achieving and demonstrating the highest standards of corporate
governance. The Company has reviewed its corporate governance practices against the Corporate
Governance Principles and Recommendations (3rd edition) published by the ASX Corporate
Governance Council (“ASX Principles and Recommendations”).
The 2018 Corporate Governance Statement is dated as at 30 June 2018 and reflects the corporate
governance practices of the Company and its subsidiaries (“Group”) in place throughout the 2017/18
financial year. The 2018 Corporate Governance Statement was approved by the Board on 20
September 2018 and can be viewed at
investor.michaelhill.com.
Compliance with ASX Principles and Recommendations
The following statement explains how the Company complies with the ASX Principles and
Recommendations, and, in the case of non-compliance, why not. The Board is of the view that with
the exception of the departures from the ASX Principles and Recommendations noted below, the
Company complies with all of the ASX Principles and Recommendations.
Principle 1: Lay solid foundations for management and oversight
The relationship between the Board and Group executives is critical to the Group's long-term success.
The Directors are responsible to the shareholders for the performance of the Group in both the short
and the longer term and seek to balance sometimes competing objectives in the best interests of the
Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders
and to ensure the Group is properly managed.
The responsibilities of the Board include:

providing strategic guidance to the Group including contributing to the development of and
approving the corporate strategy;

reviewing and approving business plans, the annual budget and financial plans including
available resources and major capital expenditure initiatives;

overseeing and monitoring:

organisational performance and the achievement of the Group's strategic goals and
objectives;

compliance with the Company's Code of Conduct (refer to Principle 3);

progress in relation to the Company's diversity objectives and compliance with its
diversity policy;

progress of major capital expenditures and other significant corporate projects including
any acquisitions or divestments;

monitoring financial performance including approval of the annual and half-year financial
reports and liaison with the Company's auditors;

appointment, performance assessment and, if necessary, removal of the Company’s Chief
Executive Officer (“CEO”);

ratifying the appointment and/or removal and contributing to the performance assessment for
the members of the Group executive team;

ensuring there are effective management processes in place and approving major corporate
initiatives;

enhancing and protecting the reputation of the organization;

Page 14

overseeing the operation of the Group's system for compliance and risk management reporting
to shareholders;

ensuring appropriate resources are available to Group executives and the senior management
team.
Day to day management of the Group's affairs and the implementation of the corporate strategy and
policy initiatives are formally delegated by the Board to the CEO and Group executives.
Diversity policy
The Company values diversity and recognises the benefits it can bring to the organisation’s ability to
achieve its goals. Accordingly, the Company has developed a Diversity Policy, which is set out in the
Corporate Governance Charter available on the Company’s website. This policy outlines the Company's
diversity objectives in relation to, amongst other things, gender, age, cultural background and
ethnicity. It includes requirements for the Board to establish measurable objectives for achieving
diversity, and for the Board to assess annually both the objectives, and the Company's progress in
achieving them.
Principle
Number
Recommendation Company’s Compliance with
Recommendation

1 Lay solid foundations for management and oversight
1.1
Role of board
and
management
Disclose the respective roles and
responsibilities of the board and
management and those matters
expressly reserved to the board and
those delegated to management.
The respective roles and
responsibilities of the Directors are set
out in the Directors’ Report contained
in the Company’s Annual Report. The
Board has established a clear
distinction between the functions and
responsibilities reserved for the Board
and those delegated to management,
which are set out in the Corporate
Governance Charter, available from
the Company’s website,
investor.michaelhill.com.





1.2
Information
regarding
election and re-
election of
director
candidates
Undertake appropriate checks
before appointing a person, or
putting forward to security holders
a candidate for election, as a
director and provide security
holders with all material
information in the company’s
possession relevant to a decision on
whether or not to elect or re-elect a
director.
The Company carefully considers the
character, experience, education and
skillset, as well as interests and
associations of potential candidates
for appointment to the Board and
conducts appropriate checks to verify
the suitability of the candidate, prior
to their election.
The Company 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.






1.3 Have a written agreement with
each director and senior executive
setting out the terms of their
appointment.
In addition to being set out in the
Corporate Governance Charter, the
roles and responsibilities of Directors
are also formalized in a letter of




Page 15
Principle
Number
Recommendation Company’s Compliance with
Recommendation

Written
contracts of
appointment
appointment which each Director
receives and commits to on their
appointment. The letters of
appointment specify 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, such as the
Trading Policy.
Each Group executive enters into a
service contract which sets out the
material terms of employment,
including a description of the position
and duties, reporting lines,
remuneration arrangements and
termination rights and entitlements.
In accordance with the Corporations
Act 2001 (Cth) (“Corporations Act”),
certain service contract details of
Group executives which are KMP are
summarized in the Company’s
Remuneration Report contained in the
Company’s Annual Report.
1.4
Company
secretary
The company secretary should be
accountable directly to the board,
through the chair of the board, on
all matters to do with the proper
functioning of the board.
In accordance with the Corporate
Governance Charter, the company
secretary of the Company (“Company
Secretary”) is accountable to the
Board for facilitating the Company’s
corporate governance processes and
the proper functioning of the Board.
Each Director is entitled to access the
advice and services of the Company
Secretary.
In accordance with the Company’s
Constitution, the appointment or
removal of the Company Secretary is a
matter for the Board as a whole.
Details of the Company Secretary’s
experience and qualifications are set
out in the Directors’ Report contained
in the Company’s Annual Report.




Page 16
Principle
Number
Recommendation Company’s Compliance with
Recommendation

1.5
Diversity

Have a diversity policy which
includes requirements for the
board or a relevant committee
of the board to set measurable
objectives for achieving gender
diversity and to assess annually
both the objectives and the
company’s progress in
achieving them.

Disclose that policy or a
summary of it.

Disclose at the end of each
reporting period the
measurable objectives for
achieving gender diversity set
by the Board or a relevant
committee of the Board in
accordance with the company’s
diversity policy and its progress
toward achieving them and
either the respective
proportions of men and women
on the board, in senior
executive positions and across
the whole organization
(including how the company
has defined ‘senior executive’
for these purposes) or if the
company is a ‘relevant
employer’ under the Workplace
Gender Equality Act 2012 (Cth),
the company’s most recent
‘Gender Equality Indicators’, as
defined in and published under
that Act.
The Company has adopted a Diversity
Policy setting out its objectives and
reporting practices with respect to
diversity, which is set out in the
Corporate Governance Charter,
available from the Company’s
website,
investor.michaelhill.com.
As the Company matures in the
diversity and inclusion space, the
business may seek to capture further
data regarding various identified
diversity markers. This should be
achieved through data capture during
the recruitment process as well as
through employee profiles in an
established Human Resources
Information System. This would allow
the Company to track and report on
diversity factors such as heritage,
languages other than English and
overseas work experience, allowing
for stronger talent management,
succession planning and development.

The measurable objectives for gender
diversity, as adopted by the Board
through the People Development and
Remuneration Committee in 2016
(and reviewed annually), are set out
below:
• 30% females on the Board; and
• female/male ratio in senior
management roles (which include
the CEO, executive, regional
management and support centre
senior leadership) of 40%:60%.
The outcomes and a comparative of
the Company’s results against its
measurable objectives are set out
below and illustrates the Company’s
progress towards achieving its
objectives as at the end of the
relevant financial period:
• Board gender diversity
(females/males): 40%/60% (2018);
40%/60% (2017);
• senior management (excluding
Board members) gender diversity




Page 17
Principle
Number
Recommendation Company’s Compliance with
Recommendation

(females/males): 34%/66% (2018);
29.2%/70.8% (2017); and
• Group wide gender diversity
(females/males): 83.7%/16.3%
(2018); 83.8%/16.2% (2017).
The Workplace Gender Equality Act
2012 (Cth) (the “WGE Act”) puts a
focus on promoting and improving
gender equality and outcomes for
both women and men in the
workplace. All non-public sector
employers with 100 or more
employees are required to report
annually under the WGE Act.
The Company has submitted its 2018
report to the Workplace Gender
Equality Agency. A copy of this report
can be found in the corporate
governance information section of the
Company website at
investor.michaelhill.com.
1.6
Board reviews
Have and disclose a process for
periodically evaluating the
performance of the board, its
committees and individual directors
and disclose whether a
performance evaluation was
undertaken in accordance with that
process.
A performance review is undertaken
annually in relation to the Board and
the Board committees. In addition to
individual evaluation sessions
between the chair of the Board
(“Chair”) and individual Directors, a
formal self-evaluation questionnaire is
used to facilitate the annual
performance review process. Where
it considers necessary the Board may
also engage a professional
independent consultant experienced
in Board reviews to conduct a review
of the Board and its Committees and
the effectiveness of the Board as a
whole.





1.7
Management
reviews
Have and disclose a process for
periodically evaluating the
performance of senior executives
and disclose whether a
performance evaluation was
undertaken in accordance with that
process.
Each year the Board, through the
People Development and
Remuneration Committee, sets
financial, operational, management
and individual targets for the CEO and
Group executives. Performance
against these targets is assessed
periodically throughout the year and a
formal performance evaluation for
Group executives is completed
annually. Details of the process




Page 18
Principle
Number
Recommendation Company’s Compliance with
Recommendation

followed are set out in the
Remuneration Report contained in the
Company’s Annual Report.

Page 19
Principle 2: Structure the board to add value
The Board operates in accordance with the broad principles set out in the Corporate Governance
Charter, which is available from the corporate governance information section of the Company
website at
investor.michaelhill.com. The charter details the Board's composition and responsibilities.
Board composition
The structure of the Board is determined in accordance with the following principles:
(1) to aim for, so far as is practicable given the size and the nature of the operations of the
Company, a majority of the Board being independent Directors;
(2) to aim for, so far as is practicable given the size and the nature of the operations of the
Company, a Chair who is not the CEO;
(3) to aim for, so far as is practicable given the size and the nature of the operations of the
Company, a Board comprising members with diverse backgrounds; and
(4) to have a minimum of three Directors.
Directors' independence
In assessing the independence of Directors, the Company regards an independent Director as a non-
executive Director (that is, not a member of management) who:
(1) is not a substantial shareholder of the Company or an officer of, or otherwise associated
directly with, a substantial shareholder of the Company;
(2) within the last three years has not been employed in an executive capacity by the Company or
another Group member;
(3) within the last three years has not been a partner, director or senior employee of a provider of
material professional services to the Company or another Group member;
(4) within the last three years has not been in a material business relationship (by example, as a
supplier or customer) with the Company or other Group member, or an officer of, or
otherwise associated with, someone in such a relationship;
(5) has no material contractual relationship with the Company or another group member other
than as a Director;
(6) does not have close family ties with any person who falls within any of categories (1) - (5)
described above; and
(7) has not served on the Board for a period which could, or could reasonably be perceived to,
materially interfere with the Director’s ability to act in the best interests of the Company or
otherwise compromise their independence.
When considering whether a Director is an independent Director, the materiality of such interest,
position, association or relationship must be assessed to determine whether it might influence, or
might reasonably be perceived to influence, in a material respect, the Director’s capacity to bring an
independent judgement to bear on issues before the Board and to act in the best interests of the
Company and its shareholders.
A Director must advise the Chair if there is a change in his or her interests, positions, associations or
relationships that could bear on his or her independence at the earliest opportunity.

Principle
Number
Recommendation Company’s Compliance with
Recommendation

2 Structure the board to add value
2.1
Nominations
committee
Does the board have a
nominations committee? If the
board does not have a
nominations committee,
Given its size, the Board has decided not
to establish a separate nominations
committee. Instead, the entire Board is
involved in decisions on Board




Page 20
Principle
Number
Recommendation Company’s Compliance with
Recommendation

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.
composition and succession issues and
the identification and evaluation of
candidate directors for appointment to
the Board.
The review of the remuneration,
personnel and succession policies and
practices for Group executives is overseen
by the People Development and
Remuneration Committee (refer to
Principle 8).
2.2
Board skills
matrix
Have and disclose a board skills
matrix setting out the mix of
skills and diversity that the
board currently has or is looking
to achieve in its membership.
The Board considers that each Director
must have the following essential
personal attributes to be suitable to serve
as a Director of the Company:

High standards of personal integrity
and ethical behavior

Independence of thought

Sound judgement and decision
making

Strong interpersonal and
communication skills

Available to serve the needs of the
Company
The Board recognizes that each Director
will not necessarily possess experience in
all areas relevant to the Company’s
operations, so seeks to ensure that its
membership includes an appropriate mix
of Directors with skills, knowledge and
experience in core competencies. A
summary of the Board’s skills, knowledge
and experience is set out below.
Skill Description
International
business
development
experience
A broad range of
business experience in
international markets.
Ability to assess
opportunities for the
Company’s continued
growth outside
Australia, create plans
for the future and have
a general knowledge of
risks of operating in
foreign countries




Page 21
Principle
Number
Recommendation Company’s Compliance with
Recommendation

Experience
in the
countries in
which the
Company
conducts its
business
Australia
New Zealand
Canada
Extensive
retail
experience
Experience in store
operations and other
retail channels
Ability to
think
strategically
Ability to think
strategically, identify
and critically assess
opportunities/threats
and develop effective
and innovative
strategies
High level of
business
acumen
Strong commercial
expertise and
experience working as a
senior executive
Technical
expertise
(including
accounting,
finance and
compliance)
Experience in
accounting, finance and
compliance. Ability to
analyse financial
statements, critically
assess investment
proposals, contribute to
financial planning,
oversee budgets,
oversee
funding/banking
arrangements and
ensure the Company is
compliant with relevant
laws and regulations
Governance
experience
and
expertise
Knowledge and
experience in corporate
governance and ability
to use expertise to
ensure good
governance of the
Company

Page 22
Principle
Number
Recommendation Company’s Compliance with
Recommendation

Marketing
and branding

Ability to contribute to
the strategic
positioning, marketing
and promotion
Supply chain
and
procurement
management

Experience in supply
chain, logistics and
procurement in the
retail industry
E-commerce
and digital
Experience in or
understanding of
ecommerce and omni
channel strategies to
create a frictionless
customer experience

2.3
Disclose
independence
and length of
service

Disclose the names of the
directors considered by the
board to be independent
directors.

If a director has an interest,
position, association or
relationship that might
cause doubts about the
independence of a director
but the board is of the
opinion that it does not
compromise the
independence of the
director, disclose the nature
of the interest, position,
association or relationship
in question and an
explanation of why the
Board is of that opinion.

Disclose the length of
service of each Director.
The Board comprises five non-executive
Directors (including the Chair). The
names, skills and experience of the
Directors in office at the date of this
statement, and the period of service of
each Director are set out in the Directors’
Report contained in the Company’s
Annual Report and below.
Michael Hill International Limited
Name/
Position
Independent
Yes/No
Period of
Service
Emma
Jane Hill
(Chair)
No –
substantial
shareholder
and close
family ties
with Sir
Richard
Michael Hill
9 June
2016 -
current
Sir Richard
Michael
Hill
No –
substantial
shareholder
and close
family ties
with Emma
Jane Hill
9 June
2016 –
current
Gary
Warwick
Smith
Yes 24
February




Page 23
Principle
Number
Recommendation Company’s Compliance with
Recommendation

2016 –
current
Robert Ian
Fyfe
Yes 9 June
2016 –
current
Janine
Suzanne
Allis
Yes 9 June
2016 -
current
Michael Hill New Zealand Limited
Name/
Position
Independent
Yes/No
Period of
Service
Emma
Jane Hill
(Chair)
No –
substantial
shareholder
and close
family ties
with Sir
Richard
Michael Hill
22
February
2007 -
current
Sir Richard
Michael
Hill
No –
substantial
shareholder
and close
family ties
with Emma
Jane Hill
30 March
1990 – 29
June 2016
Gary
Warwick
Smith
Yes 2
November
2012 – 5
August
2016
Robert Ian
Fyfe
Yes 6 January
2014 – 6
August
2016
Janine
Suzanne
Allis
Yes n/a

2.4 The majority of the board
should be independent
directors.
In accordance with the Corporate
Governance Charter and as disclosed




Page 24
Principle
Number
Recommendation Company’s Compliance with
Recommendation

Majority of
directors
independent
against Recommendation 2.3, the
majority of the Directors are independent.
Details regarding the independence of the
Directors are set out under
Recommendation 2.3 above. The
independence of each Director is assessed
regularly based on the interests disclosed
by them.
2.5
Chair
independent
The chair of the board should be
an independent director and, in
particular, should not be the
same person as the CEO.
The Chair of the Board is Emma Hill, a
non-independent Director. Ms Hill has a
comprehensive understanding of the
Group and its business. In light of this,
the Board considers Ms Hill to be the
most appropriate candidate for the role of
Chair. Given that the Board is constituted
by a majority of independent Directors, it
is considered that governance will not be
adversely affected by there being a non-
independent Chair. Ms Hill is not the CEO
of the Company.






2.6
Induction and
professional
development
Have a program for inducting
new directors and provide
appropriate professional
development opportunities for
directors to develop and
maintain the skills and
knowledge needed to perform
their role as directors
effectively.
The induction provided to new Directors
and Group executives enables them to
actively participate in Board and executive
decision-making as soon as possible. It
ensures that they have a full
understanding of the Company's financial
position, strategies, operations, culture,
values and risk management policies. It
also explains the respective rights, duties,
responsibilities, interaction and roles of
the Board and Group executives, the role
of the Board committees and the
Company's meeting arrangements.
All Directors are encouraged to become a
member of the Australian Institute of
Company Directors ("AICD") and to
further their knowledge through
participation in seminars hosted by the
AICD and other forums sponsored by
professional, industry, governance and
Government bodies.
The Directors participate, from time to
time, in the Company’s leadership forums
and actively engage with the Group’s
employees in a range of forums including
visiting the Group’s stores to gain an




Page 25
Principle
Number
Recommendation Company’s Compliance with
Recommendation

understanding of the operational
environment.
During the course of the year Directors
receive accounting policy updates,
especially around the time when the
Board considers the half-year and full-
year accounts.
The Board also attends educational
sessions on legal, accounting, regulatory
change, human resource management
and changing consumer behavior and
digital trends.
Principle 3: Act ethically and responsibly
Ethical standards
The Company is committed to the establishment and maintenance of appropriate ethical standards.
Accordingly, the Company has adopted a Corporate Ethics Policy and a Corporate Code of Conduct
(“Code”).
The Corporate Ethics Policy sets out the obligations of integrity and honesty on each member of the
Board and his or her obligations with respect to trading in securities in the Company (which is
addressed further in the Trading Policy) and disclosure to the ASX.
The Code establishes the principles, standards and responsibilities to which the Company is committed
with respect to both its internal dealings with employees and consultants, and external dealings with
shareholders and the community at large. In summary, the Code requires that at all times all Company
personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of
the law and Company policies. The Code also requires employees, Directors and contractors who are
aware of unethical practices within the Group or breaches of the Code to report these to management
(which can be done anonymously in accordance with the Company’s whistleblowers policy).
Share Trading Policy
The Company has adopted a Trading Policy which is intended to ensure that persons who are
discharging managerial responsibilities (including but not limited to Directors), do not abuse, and do
not place themselves under suspicion of abusing, inside information that they may be thought to have,
especially in periods leading up to an announcement of the Company on the ASX.
The Trading Policy sets out the procedure for trading in securities of the Company, and generally
prohibits insider trading. The policy aims to provide directors and employees and any other persons
who may be associated with the Company, with guidance on how and when trades in the Company’s
securities may take place and when trading is strictly prohibited.
Under the terms of the Trading Policy, a ‘Restricted Person’ (as defined in the Trading Policy) must not
deal in securities of the Company unless a clearance to deal is obtained in accordance with the Trading
Policy or the dealing is an Excluded Dealing (as defined in the Trading Policy). Further, a Restricted
Person must not deal in securities of the Company if such a dealing would involve:

use of inside information;

short-term selling;

short selling; or

hedging transactions.

Page 26
The Trading Policy provides particular disclosure and approval requirements for the dealing in the
Company’s securities by the Directors, Chair, CEO and Company Secretary, and also sets out the
Company’s policy on margin loan arrangements (which are permitted under the policy but must be
disclosed to the Board through a clearance officer). Training is periodically provided to all employees.
A copy of the Code, Trading Policy and Corporate Ethics Policy are set out in the Corporate Governance
Charter, available on the Company's website,
investor.michaelhill.com.
Principle
Number
Recommendation Company’s Compliance with
Recommendation

3 Act ethically and responsibly


3.1
Code of
conduct
Have a code of conduct for
Directors, senior executives and
employees and disclose that code or
a summary of it.
The Board has established a Corporate
Code of Conduct, Corporate Ethics
Policy and Trading Policy for its
Directors, senior executives and
employees, which are set out in the
Corporate Governance Charter,
available on the Company’s website,
investor.michaelhill.com.





Principle 4: Safeguard integrity in corporate reporting
Audit and Risk Management Committee
The Audit and Risk Management Committee consists of the following independent non-executive
Directors:
G W Smith (Chair)
R I Fyfe
J S Allis
Details of these Directors' qualifications and attendance at Audit and Risk Management Committee
meetings are set out in the Directors' Report contained in the Company’s Annual Report.
All members of the Audit and Risk Management Committee are financially literate and have an
appropriate understanding of the industry in which the Group operates.
The Audit and Risk Management Committee operates in accordance with a charter which is set out in
the Corporate Governance Charter, available on the Company website.
The Audit and Risk Management Committee is responsible for reviewing and making
recommendations to the Board in relation to the adequacy of the Company’s processes for managing
risks and developing an appropriate risk management policy framework to provide guidance to the
Company’s management. Particularly, the Audit and Risk Management Committee’s core
responsibilities include:

reviewing the Company’s internal financial control system and financial statements for accuracy
and compliance with appropriate accounting practices;

monitoring and reviewing the Company’s audit function and ensuring compliance in this regard
with the relevant regulatory frameworks;

monitoring corporate conduct and business ethics and ongoing compliance with laws and
regulations;

reviewing matters of significance affecting the financial welfare of the Company;

ensuring that systems of accounting and reporting of financial information to shareholders,
regulators and the general public are adequate; and

Page 27

defining and periodically reviewing risk management as it applies to the Company and ensuring
the appropriate disclosure of any relevant risks to the market.
In fulfilling its responsibilities, the Audit and Risk Management Committee:

receives regular reports from management and the internal and the external auditors;

meets with the internal and external auditors at least twice a year, or more frequently if
necessary;

reviews the processes the CEO and CFO have in place to support their certifications to the
Board;

reviews any significant disagreements between the auditors and management, irrespective of
whether they have been resolved;

meets separately with the external auditors and the Group Internal Audit Manager at least twice
a year without the presence of management;and

provides the internal and external auditors with a clear line of direct communication at any time
to either the Chair of the Audit and Risk Management Committee or the Chair of the Board.
The Audit and Risk Management Committee has authority, within the scope of its responsibilities, to
seek any information it requires from any employee or external party.
External auditors
The Company's and Audit and Risk Management Committee's policy is to appoint external auditors
who clearly demonstrate quality and independence. The performance of the external auditor is
reviewed annually and applications for tender of external audit services are requested as deemed
appropriate, taking into consideration assessment of performance, existing value and tender costs.
Ernst & Young (“EY”) was appointed as the external auditor in 2016. It is ER's policy to rotate audit
engagement partners on listed companies in accordance with the requirements of the Corporations
Act, which is generally after five years, subject to certain exceptions.
An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services,
is provided in the Directors' Report contained in the Company’s Annual Report. It is the policy of the
external auditors to provide an annual declaration of their independence to the Audit and Risk
Management Committee.
The external auditor attends the Company's annual general meetings (“AGMs”) and is available to
answer shareholder questions about the conduct of the audit and the preparation and content of the
Independent Auditor's Report to shareholders.
Principle
Number
Recommendation Company’s Compliance with
Recommendation

4 Safeguard integrity in corporate
reporting




4.1
Audit
committee
The Board should have an audit
committee which:

has at least three members, all
of whom are non-executive
directors a majority of whom
are independent directors; and

is chaired by an independent
director who is not the chair of
the board,
and disclose:
In accordance with this
Recommendation, the Audit and Risk
Management Committee comprises
three members, all of whom are non-
executive and independent Directors.
Details of the membership of the
Audit and Risk Management
Committee, including the names and
qualifications of the Committee
members, are set out in the Directors’




Page 28
Principle
Number
Recommendation Company’s Compliance with
Recommendation


the charter of the committee,
the relevant qualifications and
experience of the members of
the committee; and

in relation to each reporting
period, the number of times the
committee met throughout the
period and the individual
attendances of the members at
those meetings.
Report contained in the Company’s
Annual Report.
In addition to the Audit and Risk
Management Committee members,
the CEO, CFO, external auditors and
Company Secretary regularly attend
Audit and Risk Management
Committee meetings.
The number of meetings held and
attended by each member of the
Audit and Risk Management
Committee during the financial year
are set out in the Directors’ Report
contained in the Company’s Annual
Report.
The Audit and Risk Management
Committee Charter is set out in the
Company’s Corporate Governance
Charter, which is available on the
Company’s website at
investor.michaelhill.com.
4.2
CEO and CFO
certification of
financial
statements
The board should, before it
approves the company’s financial
statements for a financial period,
receive from its CEO and Chief
Financial Officer (“CFO”) a
declaration that, in their opinion,
the financial records of the
company have been properly
maintained and that the financial
statements comply with the
appropriate accounting standards
and give a true and fair view of the
financial position and performance
of the company and that the
opinion has been formed on the
basis of a sound system of risk
management and internal control
which is operating effectively.
The Board has received the relevant
assurances from the CEO and CFO in
the declarations provided in
accordance with section 295A of the
Corporations Act that the financial
statements give a true and fair view of
the financial position and performance
of the Company and comply with the
applicable requirements.






4.3
External
auditor at
AGM
Ensure that the Company’s external
auditor attends the AGM and is
available to answer questions from
security holders relevant to the
audit.
The Group’s external audit function is
performed by EY. Representatives of
EY attend the Company’s AGMs and
are available to answer shareholder
questions regarding the audit.





Principles 5 and 6: Make timely and balanced disclosure and respect the rights of
security holders

Page 29
Continuous disclosure and shareholder communication
The Company has written policies and procedures on information disclosure that focus on continuous
disclosure of any information concerning the Group that a reasonable person would expect to have a
material effect on the price of the Company's securities. These policies and procedures also include
the arrangements the Company has in place to promote communication with shareholders and
encourage effective participation at general meetings. A summary of these policies and procedures are
set out in the Corporate Governance Charter, available on the Company's website.
The Company Secretary has been nominated as the person responsible for communications with the
Australian Securities Exchange (“ASX”) and the New Zealand Stock Exchange (“NZX”). This role includes
responsibility for managing compliance with the continuous disclosure requirements in the ASX/NZX
Listing Rules.
All information disclosed to the ASX/NZX is posted on the Company's website as soon as it is disclosed
to the ASX/NZX.
When analysts are briefed on aspects of the Group operations, the material used in the presentation is
released to the ASX/NZX and posted on the Company's website. Procedures have also been
established for reviewing whether any price sensitive information has been inadvertently disclosed
and, if so, this information is also immediately released to the market.
All shareholders, who elect to, receive a copy of the Company's annual (full or concise) and half-yearly
reports. In addition, the Company seeks to provide opportunities for shareholders to participate
through electronic means. Recent initiatives to facilitate this include making all Company
announcements, media briefings, details of Company meetings, press releases and financial reports
available on the Company's website, including a broadcast of the Company's AGM. Where possible,
the Company arranges for advance notification of significant Group briefings (including, but not limited
to, results announcements) and makes them widely accessible, including through the use of
webcasting or any other mass communication mechanisms as may be practical.
Principle
Number
Recommendation Company’s Compliance with
Recommendation

5 Make timely and balanced disclosure


5.1
Disclosure and
communications
policy
Establish a written policy designed
to ensure compliance with ASX
Listing Rule continuous disclosure
requirements and disclose that
policy or a summary of it.
The Company has adopted guidelines
in relation to disclosure and
communications which set out the
processes and practices that ensure
its compliance with the continuous
disclosure requirements under the
ASX and NZX Listing Rules and the
Corporations Act.
The Company has also established
guidelines to assist officers and
employees of the Company to comply
with the Company’s disclosure and
communications requirements.
These guidelines are set out in the
Company’s Corporate Ethics Policy
contained in the Corporate
Governance Charter, which is
available on its website,
investor.michaelhill.com.




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Principle
Number
Recommendation Company’s Compliance with
Recommendation

6 Respect the rights of security holders


6.1
Information on
website
Provide information about the
company and its governance to
investors via the company’s
website.
The Company keeps investors
informed of its corporate governance,
financial performance and prospects
via its website. Investors can access
copies of all announcements to the
ASX and NZX, notices of meetings,
annual reports and financial
statements, investor presentations
webcasts and/or transcripts of those
presentations and a key events
calendar via the ‘Investor Centre’ tab
and can access general information
regarding the Company (including
Board and Group executive team
members and dividend policy) and
the structure of its business under the
‘About Us’ and governance
documents under the ‘Governance
Policies and Compliance’ tabs.
The Company’s website is
investor.michaelhill.com.





6.2
Investor
relations
programs
Design and implement an investor
relations program to facilitate
effective two-way communication
with investors.
The Company conducts regular
briefings including interim and full
year results announcements, investor
days, site visits and attends regional
and industry specific conferences in
order to facilitate effective two-way
communication with investors and
other financial market participants.
Access to executive and operational
management is provided at these
events, with separate one-one-one or
group meetings offered whenever
possible.





6.3
Facilitate
participation at
meetings of
security holders
Disclose policies and processes in
place to facilitate and encourage
participation at meetings of
security holders.
The Company uses technology to
facilitate the participation of security
holders in meetings, including live
teleconferences.
Shareholders are given an
opportunity to ask questions of the
Company and its auditor at the AGM.





6.4 Give security holders the option to
receive communications from, and
send communications to, the
The Company provides its investors
the option to receive communications
from and send communications to,




Page 31
Principle
Number
Recommendation Company’s Compliance with
Recommendation

Facilitate
electronic
communications
company and its security registry
electronically.
the Company and the share registry
electronically.
Principle 7: Recognise and manage risk
The Board is responsible for satisfying itself annually, or more frequently as required, that
management has developed and implemented a sound system of risk management and internal
controls. Detailed work on this task is delegated to the Audit and Risk Management Committee and
reviewed by the full Board.
The Audit and Risk Management Committee is responsible for ensuring there are adequate policies in
relation to risk management, compliance and internal control systems. It monitors the Company's risk
management by overseeing management's actions in the evaluation, management, monitoring and
reporting of material operational, financial, compliance and strategic risks. In providing this oversight,
the Audit and Risk Management Committee:

reviews the framework and methodology for risk identification, the degree of risk the company
is willing to accept, the management of risk and the processes for auditing and evaluating the
Company's risk management system;

reviews Group-wide objectives in the context of the abovementioned categories of corporate
risk;

reviews and, where necessary, approves guidelines and policies governing the identification,
assessment and management of the Company's exposure to risk;

reviews and approves the delegations of financial authorities and addresses any need to update
these authorities on an annual basis, and

reviews compliance with agreed policies.
The Audit and Risk Management Committee recommends any actions it deems appropriate to the
Board for its consideration.
Management is responsible for designing, implementing and reporting on the adequacy of the
Company's risk management and internal control system and has to report to the Audit and Risk
Management Committee on the effectiveness of:

risk management and internal control system during the year, and

the Company's management of its material business risks.
The Company also has an internal audit division which carries out regular systematic monitoring of
control activities and reports to the Audit and Risk Management Committee.
Principle
Number
Recommendation Company’s Compliance with
Recommendation

7 Recognise and manage risk


7.1
Risk Committee

Have a committee or committees to
oversee risk, each of which:

has at least three members, a
majority of whom are
independent directors; and
The Company’s Audit and Risk
Management Committee oversees the
process for identifying and managing
material risks in the Company in
accordance with the Audit and Risk
Management Committee Charter,
which is set out in the Corporate




Page 32
Principle
Number
Recommendation Company’s Compliance with
Recommendation


is chaired by an independent
director,
and disclose:

the charter of the committee
and the members of the
committee; and

as at the end of each reporting
period, the number of times the
committee met throughout the
period and the individual
attendances of the members at
those meetings.
Governance Charter available on the
Company’s website,
investor.michaelhill.com.
Further details regarding the Audit
and Risk Management Committee, its
membership and the number of
meetings held during the financial
year are set out in response to
Recommendation 4.1.
7.2
Annual risk
review
The Board or committee of the
Board should review the company’s
risk management framework at
least annually to satisfy itself that it
continues to be sound and disclose,
in relation to each reporting period,
whether such a review has taken
place.
The Audit and Risk Management
Committee of the Board undertook a
review of the Group’s risk
management framework during the
FY18 financial year to satisfy itself that
it continues to be sound.
Further, the Company is in the process
of undertaking a comprehensive
review of its internal audit and risk
management functions generally.






7.3
Internal audit
Disclose if it has an internal audit
function, how the function is
structured and what role it
performs or if it does not have an
internal audit function, that fact
and the processes it employs for
evaluation and continually
improving the effectiveness of its
risk management and internal
control processes.
The Company has an internal audit
function that operates under a Board-
approved Internal Audit Charter.
The internal audit function is overseen
by the Audit and Risk Management
Committee. In accordance with the
Audit and Risk Management
Committee Charter, the appointment
or removal of the Group Internal Audit
Manager is ultimately a matter for the
Audit and Risk Management
Committee.






7.4
Sustainability
risks
Disclose whether the Company has
any material exposure to economic,
environmental and social
sustainability risks and if it does,
how it manages or intends to
manage those risks.
The Company identifies and manages
material exposures to economic,
environmental and social
sustainability risks in accordance with
its risk management framework
incorporating the Board approved risk
appetite.
The Company has continued working
to address its material sustainability
issues and improve its sustainable
business practices. Refer to




Page 33
Principle
Number
Recommendation Company’s Compliance with
Recommendation

‘Sustainability’ section of the
Company’s Annual Report.
Principle 8: Remunerate fairly and responsibly
People Development and Remuneration Committee
The People Development and Remuneration Committee consists of the following non-executive
Directors (a majority of whom are independent, including the chair):
R I Fyfe (Chair)
E J Hill
G W Smith
Details of these Directors' attendance at People Development and Remuneration Committee meetings
are set out in the Directors' Report contained in the Company’s Annual Report.
The People Development and Remuneration Committee operates in accordance with its charter which
is set out in the Corporate Governance Charter, available on the Company website,
investor.michaelhill.com. The People Development and Remuneration Committee advises the Board
on remuneration and incentive policies and practices generally, and makes specific recommendations
on remuneration packages and other terms of employment for executive Directors, other Group
executives and non-executive Directors.
Each member of the Group executive team signs a formal employment contract at the time of their
appointment covering a range of matters including their duties, rights, responsibilities and any
entitlements on termination. The standard contract refers to a specific formal job description.
Further information on Directors' and executives remuneration, including principles used to determine
remuneration, is set out in the Remuneration Report contained in the Company's Annual Report.
The People Development and Remuneration Committee also assumes responsibility for overseeing
management succession planning, including the implementation of appropriate executive
development programmes and ensuring adequate arrangements are in place, so that appropriate
candidates are recruited for later promotion to senior positions. This includes overseeing processes in
relation to meeting diversity objectives for the Group.
The People Development and Remuneration Committee also reviews and determines the Group’s
remuneration policy and structure annually, including the performance goals and measures for the
CEO and Group executive team, to ensure it remains aligned to business needs and meets the Group’s
remuneration principles, strategic and operating plan.
The People Development and Remuneration Committee has authority, within the scope of its
responsibilities, to seek any information it requires from any employee or external party
Principle
Number
Recommendation Company’s Compliance with
Recommendation

8 Remunerate fairly and responsibly


8.1
Remuneration
committee
The board should have a
remuneration committee which:

has at least three members, a
majority of whom are
independent directors; and
The Company’s remuneration
function is performed by the People
Development and Remuneration
Committee, which in accordance with
this Recommendation, comprises
three members (the majority of




Page 34
Principle
Number
Recommendation Company’s Compliance with
Recommendation


is chaired by an independent
director,
and disclose:

the charter and the members of
the committee; and

as at the end of each reporting
period, the number of times
the committee met throughout
the period and the individual
attendances of the members at
those meetings.
whom, including the chair, are non-
executive and independent Directors).
Details of the membership of the
People Development and
Remuneration Committee, including
the names and qualifications of the
Committee members, are set out in
the Directors’ Report contained in the
Company’s Annual Report.
The People Development and
Remuneration Committee Charter is
set out in the Company’s Corporate
Governance Charter, which is
available on the Company’s website at
investor.michaelhill.com.
8.2
Disclosure of
Executive and
Non-Executive
Director
remuneration
policy
Separately disclose policies and
practices regarding the
remuneration of non-executive
Directors and the remuneration of
executive Directors and other
senior executives.
The Company seeks to attract and
retain high performance Directors and
executives with appropriate skills,
qualifications and experience to add
value to the Company and fulfil the
roles and responsibilities required. It
reviews requirements for additional
capabilities at least annually.
Executive remuneration is designed to
reflect performance and, accordingly,
remuneration is structured with a
fixed component and performance-
based remuneration component.
Performance-linked compensation
includes both short-term ("STI") and
long-term ("LTI") incentives, and is
designed to reward Group executives
for meeting or exceeding their
financial and personal objectives. The
STI is an ‘at risk’ bonus provided in the
form of cash, while the LTI is provided
as rights over ordinary shares of the
Company under the rules of the
executive incentive plan.
Non-executive Directors are paid fixed
fees for their services in accordance
with the Company’s Constitution.
Fees paid are a composite fee
(covering all Board and Committee
responsibilities) and any contributions
by the Company to a fund for the
purposes of superannuation benefits
for a Director. No other retirement




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Principle
Number
Recommendation Company’s Compliance with
Recommendation

benefit schemes are in place in
respect to Non-Executive Directors.
Further details regarding the
remuneration of Key Management
Personnel and non-executive
Directors are set out in the
Remuneration Report contained in
the Company’s Annual Report.