The Board of Directors of Cardno Limited is ultimately responsible for all corporate governance matters of the consolidated entity and is accountable to the shareholders for the overall business performance of the company. Details of the corporate governance policies of the company can be found in the Investor Centre of the company’s website, www.cardno.com.au. 

Cardno Limited is committed to implementing and maintaining sound corporate governance practices and has considered the ASX Corporate Governance Principles and Recommendations (Second Edition)  in the development of its corporate governance. The Board has assessed the company’s current practice against these Principles and Recommendations and notes that the company’s practices are consistent except where stated below. 

## Principle 1: Lay solid foundation for management and oversight 

The role of the Board and delegation to Senior Executives has been formalised. The most significant responsibilities of the Board are: 

 providing strategic guidance to the company 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; 

 reviewing the operational and financial performance of the company’s activities; 

 reporting to shareholders and the market; 

 ensuring compliance with prudential regulations and standards; 

 ensuring adequate risk management processes are in place; 

 reviewing internal controls and internal and external audit reports; 

 monitoring and influencing the culture and reputation of the company; 

 monitoring board composition, director selection and board process and performance; 

 approving key executive appointments and ensuring executive succession planning; 

 reviewing the performance and remuneration of the Managing Director and Senior Executives; 

 ensuring that the Board as a whole has an appropriate understanding of each substantial segment of the business; and 

 authorising and monitoring major investment and strategic commitments. 

The Board has delegated to Senior Executives responsibility for the implementation of the company’s strategic direction, business plans and day-to-day management of the company’s operations. 

The performance of Senior Executives is evaluated by the Board through formal performance reviews undertaken on an annual basis. The individual performance of each Senior Executive is reviewed against goals set in the previous year and new objectives are established for the following financial year. The performance reviews were completed during the year in accordance with the process agreed by the Board. 

The Board endorses a culture of continuous improvement and will therefore continue to refine and develop its role and the delegation of responsibilities to management as the company develops. 

The Board’s responsibilities and functions are also contained in the company’s Corporate Governance Policy which can be accessed in the Investor Centre on the company’s website. 

## Principle 2: Structure the Board to add value 

To add value, the Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties. Collectively the Directors have a broad range of experience, expertise, skills, qualifications and contacts relevant to the business. Details of the skills and experience of each Director are contained in the Directors’ Report and on the company’s website. 

The Board currently comprises four Non-executive Directors including the Chairman, and four Executive Directors. 

The Board has adopted the following criteria to determine the independence of a Director as someone who must be a Non-executive Director and: 

 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, or been a director after ceasing to hold any such employment; 

 within the last three years has not been a principal of a material professional adviser or a material consultant to the company or another group member or an employee materially associated with the service provided; 

 is not a material supplier or customer of the company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; 

 has no material contractual relationship with the company or other group member other than as a Director of the company; 

