## BOARD, MANAGEMENT AND CORPORATE GOVERNANCE corporate governance 

The Board and management of the Company are committed to ensuring that the Company adheres to best practice governance principles and maintains the highest ethical standards. The Board is responsible for the overall corporate governance of the Company, including adopting the appropriate policies and procedures and seeking to ensure Directors, management and employees fulfil their functions effectively and responsibly. The Company is listed on both the New Zealand and Australian stock exchanges. Corporate governance principles and guidelines have been introduced in both countries. These include the Australian Securities Exchange (ASX) Corporate Governance Council Corporate Governance Principles and Recommendations, the New Zealand Stock Exchange Listing Rules relating to corporate governance, the NZX Corporate Governance Best Practice Code, and the New Zealand Securities Commission’s Corporate Governance Principles and Guidelines (collectively, the Principles). The Board considers that the Company’s corporate governance practices and procedures substantially reflect the principles. The full content of the Company’s Corporate Governance policies, practices and procedures can be found on the Company’s website (www.kathmanduholdings.com). 

The main policies and practices adopted by the Company are summarised below. 

## BOARD CHARTERS OF DIRECTORS AND ITS COMMITTEES 

The Board has adopted a written charter to provide a framework for the effective operation of the Board. The charter addresses the following matters and responsibilities of the Board: 

enhancing Shareholder value; 

oversight of the Company, including its control and accountability systems; 

appointing and removing the Managing Director (or equivalent) and the Chief Financial Officer; 

ratifying the appointment, and where appropriate, the removal of the senior executives; 

input into and approval of corporate strategy and performance objectives; 

reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance; 

monitoring senior management’s performance and implementation strategy, and seeking to ensure appropriate resources are available; 

approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures; 

approving budgets; and 

approving and monitoring financial and other reporting. 

## BOARD COMPOSITION 

At present, there are six Directors on the Board. Four out of the six Directors are non-Executive Directors. Peter Halkett, (Managing Director and Chief Executive Officer), and Mark Todd (Finance Director and Chief Financial Officer) are the only Executive Directors on the Board. The Chairman of the Board is John Harvey. The biography of each Board member, including each Director’s skills, experience, expertise and the term of office held by each Director at the date of this Annual Report is set out in the “Board of Directors” section of this Annual Report. 

## INDEPENDENCE OF DIRECTORS 

The factors that the Company will take into account when assessing the independence of its Directors are set out in its Charter, a copy of which is available on the Company’s website (www.kathmanduholdings.com). 

The Managing Director (Peter Halkett) and Finance Director (Mark Todd) are employed by the Company or another Group member in an executive capacity and are not considered to be independent Directors based on the criteria set out in the Board Charter. All remaining Directors satisfy the criteria and are considered independent Directors, namely John Harvey, John Holland, Sandra McPhee and Christine Cross. 

## BOARD COMMITTEES 

The Board may from time to time establish appropriate committees to assist in the discharge of its responsibilities. The Board has established the Audit and Risk Committee and the Remuneration and Nomination Committee. Other committees may be established by the Board as and when required. Membership of Board committees will be based on the needs of the Company, relevant legislative and other requirements and the skills and experience of individual Directors. 

## Audit and Risk Committee 

Under its charter, this committee must have at least three members, a majority of whom must be independent Directors and all of whom must be non-Executive Directors. Currently, all the non-Executive Directors, other than Christine Cross are members of this committee. John Holland is Chair of the committee. 

The primary role of this committee includes: 

overseeing the process of financial reporting, internal control, continuous disclosure, financial and non-financial risk management and compliance and external audit; 

monitoring Kathmandu’s compliance with laws and regulations and Kathmandu’s own codes of conduct and ethics; 

encouraging effective relationships with, and communication between, the Board, Management and Kathmandu’s external auditor; and 

