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 2019

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 12 September 2019 and has been approved by
the board.

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

Date: 25 September 2019
Name of Director or Secretary authorising
lodgement:
Andrew Lowe, 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 its board and
management; and
(b) those matters expressly reserved to the board and those
delegated to management.
... the fact that we follow this recommendation:
☒ in our Corporate Governance Statement
☒ in the Directors’ Report contained in our 2019 Annual Report at
http://investor.michaelhill.com/financial-reports/annual-reports
... and information about the respective roles and responsibilities of
our board and management (including those matters expressly
reserved to the board and those delegated to management):
☒ in our Corporate Governance Charter at
investor.michaelhill.com
☒ in our Corporate Governance Statement
☐ an explanation why that is so in our Corporate Governance
Statement OR

☐ we are an externally managed entity and this recommendation
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 information 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 Notices of 2018 & 2019 AGM
http://investor.michaelhill.com/events/shareholders-meetings
(2019 notice available from September 2019)
☐ an explanation why that is so in our Corporate Governance
Statement OR

☐ we are an externally managed entity and this recommendation
is therefore not applicable
1.3
A listed entity should have a written agreement with 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 2019 Annual
Report at
http://investor.michaelhill.com/financial-
reports/annual-reports
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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 matters 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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
is therefore not applicable

4
If you have followed all of the Council’s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form 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 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 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 diversity set by
the board or a relevant committee of the board in accordance
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 defined
“senior executive” for these purposes); or
(2) 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.
... the fact that we have a diversity policy that complies with
paragraph (a):
☒ in our Corporate Governance Statement OR
☐ at [insert location]
... and a copy of our diversity policy or a summary of it:
☒ in our Corporate Governance Charter at
investor.michaelhill.com
... and the measurable objectives for achieving gender diversity set by
the board or a relevant committee of the board in accordance 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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
is therefore not applicable
1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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 evaluating the
performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
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 2019 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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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 number 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, 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.
[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 committee and the
processes we employ 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:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity and this recommendation
is therefore not applicable
2.2
A listed entity should 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.
... our board skills matrix:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement OR

☐ we are an externally managed entity and this recommendation
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 board to be
independent directors;
(b) if a director has an interest, position, association or
relationship of the type described in Box 2.3 but the board
is of the opinion that it does not compromise the
independence of the director, the nature of the interest,
position, association or relationship in question and an
explanation of why the board is of that opinion; and
(c) the length of service of each director.
... the names of the directors considered by the board to be
independent directors:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
... and, where applicable, the information referred to 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 2019 Annual Report at
http://investor.michaelhill.com/financial-reports/annual-reports

☐ an explanation why that is so in our Corporate Governance
Statement
2.4
A majority of the board of a listed entity should be 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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation
is therefore not applicable

2.6
A listed entity should 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 fact that we follow this recommendation:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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, senior 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 Governance
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 REPORTING
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 not the
chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the
members of the committee; and
(5) 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; or
(b) if it does not have an audit committee, disclose that fact
and the processes it employs that independently verify and
safeguard the integrity of its corporate reporting, including
the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement
partner.
[If the entity complies with paragraph (a):]
... the fact that we have an audit 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:
☒ 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 2019 Annual Report at
http://investor.michaelhill.com/financial-reports/annual-reports
[If the entity complies with paragraph (b):]
... the fact that we do not have an audit committee and the processes
we employ that independently verify and safeguard the integrity of our
corporate reporting, including the processes for the 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 Governance
Statement
4.2
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO
and CFO a declaration that, in their opinion, the financial records
of the entity 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 entity 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 fact that we follow this recommendation:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
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 Notices of 2018 & 2019 AGM
http://investor.michaelhill.com/events/shareholders-meetings
(2019 notice available from September 2019)
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity that does not hold an
annual general meeting and this recommendation is therefore
not applicable

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1
A listed entity should:
(a) have a written policy for complying with its continuous
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 Governance
Statement
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1
A listed entity should provide information about itself and its
governance to investors via its website.
... information about us and our governance on our website:
☒ at investor.michaelhill.com
☐ an explanation why that is so in our Corporate Governance
Statement

6.2
A listed entity should design and implement an investor relations
program to facilitate effective two-way communication 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 Governance
Statement

6.3
A listed entity should disclose the policies and processes it has in
place to facilitate and encourage participation at meetings of
security holders.
... our policies and processes for facilitating and encouraging
participation at meetings of security holders:
☒ in our Corporate Governance Statement
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity that does not hold
periodic meetings of security holders and this recommendation
is therefore not applicable

6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the 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 Governance
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 number 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 committees that
satisfy (a) above, disclose that fact and the processes 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 to 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 2019 Annual Report at
http://investor.michaelhill.com/financial-reports/annual-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 overseeing our risk
management framework:
☐ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement
7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at 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 reviews the entity’s
risk management framework at least annually to satisfy 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 reporting period
covered by this Appendix 4G:
☒ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
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 function 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 continually
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 function and the
processes we employ for evaluating and continually improving the
effectiveness of our risk management and internal control processes:
☐ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement
7.4
A listed entity should disclose whether it has any material
exposure to economic, environmental and social sustainability
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 2019 Annual Report at http://investor.michaelhill.com/financi
reports/annual-reports
☐ an explanation why that is so in our Corporate Governance
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 number 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, disclose that
fact and the processes it employs for setting the level and
composition of remuneration for directors and senior
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 that 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 2019 Annual Report at
http://investor.michaelhill.com/financial-reports/annual-reports
[If the entity complies with paragraph (b):]
... the fact that we do not have a remuneration committee and the
processes we employ for setting the level and composition of
remuneration for directors and senior executives and 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 Governance
Statement OR
☐ we are an externally managed entity and this recommendation is
therefore not applicable
8.2
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive directors
and the remuneration of executive directors and other senior
executives.
... separately our remuneration policies and practices regarding the
remuneration of non-executive directors and the remuneration of
executive directors and other senior executives:
☒ in our Corporate Governance Statement
☒ in the Remuneration Report contained in our 2019 Annual
Report at http://investor.michaelhill.com/financial-
reports/annual-reports
☐ an explanation why that is so in our Corporate Governance
Statement OR
☐ we are an externally managed entity and this recommendation
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 remuneration scheme
should:
(a) have a policy on whether participants are permitted 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 Governance
Statement OR
☐ w e do not have an equity-based remuneration scheme and this
recommendation is therefore not applicable OR
☐ we are an externally managed entity and this recommendation
is therefore not applicable
ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES
-
Alternative to Recommendation 1.1 for externally managed listed
entities:
The responsible entity of an externally managed listed entity
should disclose:
(a) the arrangements between the responsible entity and the
listed entity for managing the affairs of the listed 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 Governance
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 of the entity:
☐ in our Corporate Governance Statement OR
☐ at [insert location]
☐ an explanation why that is so in our Corporate Governance
Statement

Page 1
2019 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 high 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 2019 Corporate Governance Statement is dated as at 30 June 2019 and reflects the corporate
governance practices of the Company and its subsidiaries (“Group”) in place throughout the 2018/19
financial year. The 2019 Corporate Governance Statement was approved by the Board on 12
September 2019 and can be viewed at investor.michaelhill.com.

Compliance with ASX principles and recommendations
The following statement sets out each of the ASX Principles and Recommendations and explains how
the Company complies with them, and, in the case of non-compliance, why not.

1.
Principle 1: Lay solid foundations for management and oversight

1.1. Role of the Board and Management

“A listed entity should disclose:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to
management.”

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 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
.

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;

Page 2
 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 organisation;

• 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.

1.2. Information regarding election and re-election of director candidates

“A listed entity should:

(a) undertake appropriate checks before appointing a director or senior executive or
putting someone forward for election as a director; and

(b) provide security holders with all material information in its 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. Written contracts of appointment

“A listed entity should 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 formalised in a letter of 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

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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 summarised in the Company’s
Remuneration Report contained in the Company’s Annual Report.

1.4. Company secretary

“The company secretary of a listed entity should be accountable directly to the board,
through the chair, 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.

1.5. Diversity

“A listed entity should:

(a) 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 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 diversity set by the board or a relevant committee of the board
in accordance 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 defined “senior executive” for these purposes); or

(2) 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.”

The Company values diversity and inclusion and recognises the benefits it can bring to the
organisation’s ability to achieve its goals. Accordingly, the Company has developed a Diversity
and Inclusion Policy, which is set out in the Corporate Governance Charter available on the
Company’s website. This policy outlines the Company's commitment to fostering a diverse and
inclusive workplace and includes requirements for the Board to establish measurable
objectives for achieving diversity and to review annually both the objectives, and the
Company's progress in achieving them. The Company believes our commitment to diversity
and inclusion enriches our perspective, fuels our innovation, drives performance and

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engagement and connects us closer to our fellow team members, customers, shareholders
and communities within which we operate.
As the Company matures in the diversity and inclusion space, the business will capture and
report on further data regarding various identified diversity markers such as heritage,
languages other than English, education and disability, allowing for stronger talent
management, succession planning and development and inclusion practices. This will be
achieved through data capture during the recruitment process as well as through employee
profiles in the established Human Resources Information System.
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% (2019); 40%/60% (2018);

• senior management (excluding Board members) gender diversity (females/males):
48%/52% (2019); 34%/66% (2018); and

• Group wide gender diversity (females/males): 85%/15% (2019); 83.7%/16.3% (2018).

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 2019 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

“A listed entity should:

a) have and disclose a process for periodically evaluating the performance of the
board, its committees and individual directors; and

b) Disclose , in relation to each reporting period, whether a performance evaluation
was undertaken in the reporting period in accordance with that process.”

A performance review is undertaken annually in relation to the Board and the Board
committees. In 2017 and 2018 the Board conducted a self-evaluated process. In 2019, the
Company engaged an external 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

“A listed entity should:

(a) have and disclose a process for periodically evaluating the performance of its
senior executives; and

Page 5
(b) disclose, in relation to each reporting period, whether a performance evaluation
was undertaken in the reporting period 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
followed are set out in the Remuneration Report contained in the Company’s Annual Report.

2. 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.

2.1. Nominations committee

“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 number 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, 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.”
Given its size, the Board has decided not to establish a separate nominations committee.
Instead, the entire Board is involved in decisions on Board 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

“A listed entity should 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 behaviour;

 independence of thought;

Page 6

 sound judgement and decision making;

 strong interpersonal and communication skills;

 available to serve the needs of the Company.

The Board recognises 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
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
Marketing and branding Ability to contribute to 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

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2.3. Disclose Independence and length of service

“A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position, association or relationship of the type
described in Box 2.3 but the board is of the opinion that it does not compromise
the independence of the director, the nature of the interest, position, association
or relationship in question and an explanation of why the board is of that opinion;
and
(c) the length of service of each director.”

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 Hill (Chair) No – substantial shareholder and close
family ties with Sir Richard Michael Hill
9 June 2016 - current
Sir Michael Hill
No – substantial shareholder and close
family ties with Emma Jane Hill
9 June 2016 – current
Gary Smith Yes 24 February 2016 – current
Rob Fyfe Yes 9 June 2016 – current
Janine Allis Yes 9 June 2016 - current

Michael Hill New Zealand Limited

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

Page 8
2.4. Majority of directors independent
“The majority of the board of a listed entity should be independent directors”.
In accordance with the Corporate Governance Charter and as disclosed against
Recommendation 2.3, the majority of the Directors are independent.
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:
• is not a substantial shareholder of the Company or an officer of, or otherwise associated
directly with, a substantial shareholder of the Company;

• within the last three years has not been employed in an executive capacity by the
Company or another Group member;

• 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;

• 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;

• has no material contractual relationship with the Company or another group member
other than as a Director’;

• does not have close family ties with any person who falls within any of the categories
described above;

• 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.

2.5. Chair independent
“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 Chair of the Board is Emma Hill, a non-independent Director. Ms Hill has a
comprehensive understanding of the Group and its business through several years of
executive and non-executive experience with the business. The Board continues to consider
that Ms Hill is the most appropriate candidate for the role of Chair. Given that the Board is
composed 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 employed by the
Company in an executive capacity.

2.6. Induction and professional development
“A listed entity should 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.”

Page 9
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. Prospective board members attend 3
board meetings prior to being offered a director position and the Board considers this a very
valuable component of the induction process.
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 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 behaviour and digital trends.

3. Principle 3: Act ethically and responsibly

3.1. Code of conduct
“A listed entity should:
(a) have a code of conduct for Directors, senior executives and employees; and
(b) 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
. They are
summarised below:
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 Australian Stock
Exchange (“ASX”) and the New Zealand Stock Exchange (“NZX”).
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 whistleblower 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 misuse,
and do not place themselves under suspicion of misusing, inside information that they may be

Page 10
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
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 a Permitted 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.

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
.

4. Principle 4: Safeguard integrity in corporate reporting

4.1. Audit committee
“The board of a listed entity should:
(a) should have an audit committee which:

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

2) is chaired by an independent director who is not the chair of the board,
and disclose:

3) the charter of the committee;

4) the relevant qualifications and experience of the members of the committee;
and

5) 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; or

(b) If it does not have an audit committee, disclose that fact and the processes it
employs that independently verify and safeguard the integrity of its corporate
reporting, including the processes for the appointment and removal of the external
auditor and the rotation of the audit engagement partner.

Page 11
The Audit and Risk Management Committee consists of the following independent non-
executive Directors:
• Gary Smith (Chair)
• Rob Fyfe
• Janine 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;
• 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;
• 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.
In addition to the Audit and Risk Management Committee members, the CEO, CFO, Group
Internal & Risk Audit Manager, external auditors and Company Secretary regularly attend
Audit and Risk Management Committee meetings.

Page 12
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 of a listed entity should, before it approves the entity’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
“A listed entity that has an AGM should ensure that the Company’s external auditor
attends its 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.

5. Principle 5: Make timely and balanced disclosure

5.1. Disclosure and communications policy
“A listed entity should:
a) have a written policy for complying with its continuous disclosure obligations
under the Listing Rules; and
b) 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


6. Principle 6: Respect the rights of security holders

6.1. Information on website
“A listed entity should provide information about itself 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

Page 13
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
“A listed entity should 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-on-one or group meetings offered whenever possible.

6.3. Facilitate participation at meetings of security holders
“A listed entity should disclose the policies and processes it has in place to facilitate
and encourage participation at meetings of security holders.”
Shareholders are, unless specifically stated in a notice of meeting, eligible to vote on all
resolutions. If shareholders are unable to attend the AGM, they are able to vote on the
proposed motions by appointing a proxy. Online proxy voting is available to shareholders.
Shareholders are given an opportunity to ask questions of the Company and its auditor at the
AGM.

6.4. Facilitate electronic communications
“A listed entity should give security holders the option to receive communications from,
and send communications to, the entity and its security registry electronically.”
The Company provides its investors the option to receive communications from and send
communications to, the Company and the share registry electronically.


7. Principle 7: Recognise and manage risk

7.1. Risk committee
“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 the end of each reporting period, the number of times the committee
met throughout the period and the individual attendance of the members

Page 14
at those meetings; or

b) if it does not have a risk committee or committees that satisfy (a) above,
disclose that fact and the processes it employs for overseeing the entity’s risk
management framework.”

The Company’s Audit and Risk Management Committee oversees the process for identifying
and managing material risks to the Company in accordance with the Audit and Risk
Management Committee Charter, which is set out in the Corporate 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:
a) review the entity’s risk management framework at 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 Audit and Risk Management Committee of the Board undertook a comprehensive review
and updates to the Group’s risk management framework, including its internal audit and risk
management functions, during the FY19 financial year and is satisfied that its risk management
framework is sound for the Company.

7.3. Internal audit
“A listed entity should disclose:
a) if it has an internal audit function, how the function 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 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.
In FY19, a comprehensive review of the Company’s internal audit and risk management
functions was undertaken, resulting in changes to the functions and areas of focus. These
have been approved by the Audit & Risk Management Committee.

7.4. Sustainability risks
“A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and if it does, how it manages or intends
to manage those risks.”

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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 and to this end has recently obtained certification from the
Responsible Jewellery Council.

8. Principle 8: Remunerate fairly and responsibly

8.1. Remuneration committee
“The Board of a listed entity should:
a) have a remuneration committee which:

1) has a 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 number 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, disclose that fact and the processes it
employs for setting the level and composition of remuneration for directors and
senior executives and ensuring that such remuneration is appropriate and not
excessive.”

The People Development and Remuneration Committee consists of the following non-executive
Directors (a majority of whom are independent, including the chair):
• Rob Fyfe (Chair)
• Emma Hill
• Gary 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 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 executive’s 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

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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.

8.2. Disclosure of executive and non-executive director remuneration policy
“A listed entity should 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 executive 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 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.