Salmat Governance

Board of Directors

Richard Lee

Non-Executive Chairman

Richard Lee is a non-executive director of Ridley Corporation Limited, CSR Limited, Newcrest Mining Limited and the Australian Rugby Union Limited. Richard is a Fellow and Chairman of the Australian Institute of Company Directors. He also holds degrees in chemical engineering and economics and is a Rhodes Scholar.  Richard is also a former chief executive of the NM Rothschild Australia Group, and a former director of NM Rothschild and Sons Limited in London, Singapore and Hong Kong.

Grant Harrod

Chief Executive Officer and Managing Director

Grant Harrod is the Chief Executive Officer of Salmat assuming this role in early April 2009. Prior to this, Grant spent 13 years with Corporate Express Australia Limited (ASX: CXP) a leading office supplies distributor, where he served as Managing Director and Chief Executive Officer for six years. Grant’s previous roles at Corporate Express included General Manager of Sales and Marketing and General Manager of Operations.

Philip Salter

Non-Executive Director

Philip Salter is a joint founder of Salmat. Philip entered the real estate business in 1977. In 1979, Philip and Peter formed Salmat, developing the business into one of Australasia's leading customer communications company. Philip is a member of the Australian Institute of Company Directors.

Peter Mattick

Non-Executive Director

Peter Mattick is a joint founder of Salmat. Peter joined in business with Philip Salter, forming Salmat in 1979. Peter, who holds a degree in Commerce from the University of New South Wales, is a Fellow of the Australian Society of Certified Practicing Accountants, a Fellow of the Australian Institute of Company Directors, a Govenor of the Advisory Council for the Institute of Neuromuscular Research and a board member of The Shepherd Centre.

Ian Elliot

Non-Executive Director

Ian is a non-executive director of Hills Industries Limited, former chairman of Promentum Limited and is currently on the board of the National Australia Day Council and a Fellow of the Australian Institute of Company Directors. Ian is also a former Chief Executive Officer of George Patterson Bates and a graduate of the advanced management program of the Harvard Business School.

John Thorn

Non-Executive Director

John Thorn has been a non-executive director of Salmat Limited since September 2003. John has had over 37 years professional experience with PricewaterhouseCoopers (PWC), with over 20 years as a partner responsible for significant international and Australian clients. John was the Australian National Managing Partner of PWC and a member of the Global Audit Management Group until 2003. John is also currently a non-executive director of National Australia Bank Limited (since October 2003), Caltex Australia Limited (since June 2004) and Amcor Limited (since December 2004 ).

Fiona Balfour

Non-Executive Director

Fiona Balfour is a former member of the Qantas executive committee with responsibilities for information technology and related areas for Qantas worldwide. Fiona was subsequently Chief Information Officer of Telstra and has advised Medibank Private and Link Market Services on IT strategy. Fiona is a trustee of the National Breast Cancer Foundation, a member of the Information Technology Faculty Advisory Board of Monash University, a council member of Knox Grammar School and a Fellow of the Australian Institute of Company Directors.

Stephen Bardwell

Company Secretary

Stephen Bardwell is the Company Secretary of Salmat and has held this position since October 2002. With over 25 years experience in senior commercial roles, Stephen joined Salmat as Group Financial Controller in 1989 and has actively participated in the expansion and development of the company in both Australia and Asia. Stephen is a Fellow of the Australian Society of Certified Practising Accountants and a Fellow of Chartered Secretaries Australia.

Board Responsibilities and Functions

The Board of Directors is accountable to shareholders for the performance of Salmat Limited and its subsidiaries (the Salmat Group).

The Board has delegated responsibility for the management of the Group through the Chief Executive Officer to executive management. There is a clear division of responsibilities between those of the Board and of management. The Chief Executive Officer is accountable to the Board for all authority delegated to executive management. The Board has also delegated some of its responsibilities to committees of the Board. These delegations are outlined in the Board approved Committee charters.

The composition of the Board is subject to shareholder approval. The Board has a majority of independent non-executive Directors.

The Chairman must be an independent non-executive Director. The Board will be independent of management and all Directors are required to bring independent judgement to bear in their Board decision making.

The Board is required to undertake an annual Board performance review and consider the appropriate mix of skills required by the Board to maximise its effectiveness and its contribution to the Group.

The Chairman is responsible for leading the Board, ensuring that Board activities are organised and efficiently conducted and for ensuring Directors are properly briefed for meetings.

The matters specifically identified and reserved for decision-making by the Board include:

• adoption of the strategic direction of the Group;
• appointment of the Chief Executive Officer and succession planning;
• approval of accounts, operating results, business plans and budgets;
• approval of financial policies and significant capital expenditure;
• monitoring business risk areas and strategies employed by management;
• monitoring financial performance including approval of the annual and half-year financial reports;
  
• ensuring there are effective management processes in place and approval of major corporate initiatives;
• ensuring there is an effective "whistleblower" policy in operation; and
• reporting to shareholders.
  

Board & Committee Membership

Board Member		Appointed Director	Committee Membership(s)
			Audit, Risk & Compliance Committee	Remuneration & Compensation Committee	Technology & Innovation Committee
Richard Lee	Chairman, Independent Non-Executive Director	9/8/2002	*	*
Philip Salter	Non-Executive Director	14/3/1984			*
Peter Mattick	Non-Executive Director	14/3/1984			*
Grant Harrod	Chief Executive Officer and Managing Director	29/4/2009			*
John Thorn	Independent Non-Executive Director	1/9/2003	Chairman	*
Ian Elliot	Independent Non-Executive Director	1/1/2005	*	Chairman
Fiona Balfour	Independent Non-Executive Director	1/1/2010	*	*	Chairman

Independence of Board Members

Our definition of an independent Director is one who is independent of management and free from any business or other relationship that could materially interfere with the exercise of independent judgement. It is the Board's view that except for Peter Mattick and Philip Salter, each of its non-executive Directors is independent. Materiality for these purposes is determined on both quantitative and qualitative bases. There is a majority of independent non-executive Directors on the Board of the Company.

Access to independent professional advice

Guidelines are in place which provide for each Director to have the right to seek independent professional advice at the Company's expense subject to the prior approval of the Chairman.

External auditor's appointment

The Company and Audit Committee policy is to appoint external auditors who clearly demonstrate quality and independence. Our independent external auditors are Ernst & Young. They are required to confirm that they have maintained their independence as part of their review of the half-year and full year results. Ernst & Young were appointed in November 2005 following a tender process and approval given by shareholders at the 2005 Annual General Meeting. Our auditors will be available to answer questions at each Annual General Meeting.

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Code of Ethics

The Board has adopted a Code of Ethics which imposes on all Directors, employees and consultants the following duties:

• To act honestly, fairly and without prejudice with clients in all commercial dealings and to conduct business with professional courtesy and integrity;
• To promote a safe, healthy and efficient work environment;
• To comply with all laws, regulations and any applicable awards;
• Not to knowingly make any misleading statements to any person or to be a party to any improper practice in relation to dealings with or by the Company;
• To ensure that the Company's resources and property are used properly;
• Not to disclose information or documents relating to the Company or its business, other than as required by law, not to make any improper public comment on the Company's affairs and not to misuse any information about the Company or its associates; and
• To ensure there is a clear communication process for material items of concern between employees and the Board.
  

Audit, Risk and Compliance Committee

The Audit, Risk and Compliance Committee is a committee of the Board. Its membership consists of the independent non-executive directors of Salmat Limited.  

The Chairman of the Committee is Mr John Thorn. Mr Thorn's experience in the accounting profession complements the financial and commercial experience of the other independent non-executive board members. This blend of experience and technical expertise enables this Committee to critically review the risk profile and further develop corporate governance within Salmat.

The Committee Charter is adopted by the Board. 

The Committee's responsibility is as follows:

• Assist the Board of Directors to discharge its responsibility to exercise due care, diligence and skill in relation to the entity's:
  
• Financial Management and Statutory Compliance including liaison with the Salmat Group's auditors.
• Assessment of whether external reporting is consistent with committee members' information and knowledge and is adequate for shareholder needs.
• Assessment of the management processes supporting external reporting.
• Recommending to the Board the appointment, re-appointment or replacement of the external auditors and setting the appropriate fees.
• Evaluating of the performance of the external auditors, including their independence, effectiveness and objectivity.
• Reviewing and assessing non-audit service provision by the external auditors and giving particular consideration to the potential for the provision of these services to impair the external auditors' judgement or independence in respect of the Salmat Group.
• Provide a structured forum for communication between the Board of Directors and senior management.
• Provide a structured reporting line for the Group risk and assurance function.

The Committee receives formal completion certification from management as to the accuracy and completeness of the financial results of the company with each set of results. The certification provides assurance to the Board as to the financial report and the condition of the Company as well as the operation of the risk management and compliance and control elements which support the financial statements. The certification is attested to the Board by the Chief Executive Officer and Chief Financial Officer.

The Committee meets with the Salmat Group’s external auditors without the presence of management on a regular basis to receive an independent view on the financial reports and other relevant matters.

The Committee customarily invites the Chief Executive Officer and Chief Financial Officer to attend the majority of its meetings.

The Committee uses a combination of internal and specialist external resources to undertake the risk assurance function.

Remuneration and Compensation Committee

The Remuneration and Compensation Committee is a committee of the Board. 

Its membership consists of the independent non-executive directors of Salmat Limited. The Chairman of the Committee is Mr Ian Elliot, who has undertaken those duties since his appointment on 1 January 2005.

The Committee Charter is adopted by the Board. 

The responsibility of the committee is to:

• Review overall remuneration policies and ensure they are in accord with current best practice.
• Determine the remuneration arrangements for the Chief Executive Officer and approve the Chief Executive Officer's recommendations for the other senior executives nominated by the Chief Executive Officer.
• Set the performance targets for the Chief Executive Officer and review their performance against these targets. Review and approve their recommended performance targets for other senior executives.
• Determine the long term incentive strategy for the Chief Executive Officer and approve their recommendations for other senior staff.
• Review succession planning of the Chief Executive Officer and plans for senior executives.
• Oversight of the Company's compliance with the occupational health and safety legislation in the relevant jurisdictions in which it operates.

Salmat has retained a independent advisers who provide information on current best practice (including remuneration levels) for executive and non-executive remuneration. The committee reviews remuneration levels in the light of this advice and the individual's performance. The joint managing directors attend committee meetings to review remuneration levels for other staff.

Technology and Innovation Committee

The Technology and Innovation Committee is a committee of the Board. It has been formed to acknowledge the key role that Information Technology and Innovation will play in the future development of the company. Its membership consists of three non-executive directors of Salmat Limited as well as the Chief Executive Officer and Chief Information Officer.

The Chairman of the Committee is Ms Fiona Balfour. Fiona’s extensive experience in senior information technology roles in major Australian companies, combined with her operational and financial skills, complements the industry and specialist ICT skills of the other Committee members.

The primary purpose of the Committee is to provide the Board with oversight and direction of Salmat’s Information, Communications and Technology (ICT) programs including research and innovation investments.

The Committee Charter is adopted by the Board.

The responsibility of the Committee is to optimise the impact of technology and associated services on the Salmat operational businesses, specifically to:

• review and approve management’s ICT strategy and architecture;
• oversee all IT projects over $1 million, including review of all post implementation reviews performed;
• oversee acquisitions in developing operations and businesses;
• review ICT businesses, products, partnerships and relationships for opportunities from a customer communications perspective;
• review ICT operational performance;
• oversee Salmat’s ICT services partnerships;
• maintain a watching brief on ICT and industry specific developments and opportunities;
• oversee the ICT risk profile for Salmat including disaster recovery and business continuity planning;
• oversee the company’s innovation framework to ensure regular flow of innovation concepts and ideas; and
• review, incubate and endorse the development of innovative concepts into opportunities for investment.

The Committee invites external advisors and/or other Salmat executives to attend meetings at the Committee’s discretion, where their knowledge or expertise can make a material contribution.

Disclosure Policy

Salmat is committed to complying with the continuous disclosure obligations of the Corporations Act and the ASX Listing Rules. Salmat understands and respects the fact that timely disclosure of relevant information is central to the efficient operation of the securities market. The Company has a continuous Disclosure Policy, which also covers the conduct of investor and analyst's briefings and communications with the media.

Materiality and Disclosure

The company has a published Disclosure Policy for timely and accurate release of material events. The policy focuses on continuous disclosure of information concerning the company that a reasonable person would expect to have a material effect on the price of the company's securities. As a general guideline, the Board considers that any financial impact which affects group revenue or profit by more than 10% will be considered material.

All price sensitive announcements made via the ASX are then immediately posted on the company's web site. Similarly, prior to any analyst briefing on aspects of the Group's operations, the material used in the presentation is released to the ASX and subsequently posted on the company's web site.

Communication

Salmat places considerable importance on effective communication with shareholders.

The Company Secretary is nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX listing rules.

All shareholders may receive a copy of the company's annual report. In addition, the company has made available electronic communication of all price sensitive announcements for convenience of all shareholders. Since our public float in December 2002, all price sensitive company announcements and financial reports are available on our web site.

Share Trading Policy

Restrictions on Securities Dealings

All employees, including our directors and other officers, are subject to the restrictions under the Corporations Act 2001 (Cth) in relation to Salmat shares.

Salmat has a published Share Trading Policy. The policy prohibits directors and key employees from dealing in Salmat securities for the period 15 days before the end of a reporting period to one day after those results are released to the market, being the embargo periods. Through an internal notification process, all directors and key employees are required to advise the Company Secretary of any trade in Salmat securities in which they have a beneficial interest.

Doing the Right Thing

Salmat's Doing the Right Thing policy covers the procedures for dealing with information or reports received regarding suspected improper conduct within Salmat. It also addresses the protection of individuals making those reports.

The policy has­ been developed to enhance the company's Risk Assurance Policy and Corporate Governance Framework. Key components of the program are Salmat's confidential intranet notification system and the independent investigations of significant issues and reporting to each Audit, Risk and Compliance Committee meeting.

The policy is published on Salmat's intranet.