Corporate Governance

Shaw River (“Shaw’) is committed to implementing and maintaining the highest standards of corporate governance. In determining what those standards should involve, Shaw has turned to the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations. Shaw is pleased to advise that its practices are largely consistent with those of the ASX guidelines.

Role of the Board of Directors

The Shaw Board of Directors (the Board) is responsible for setting the strategic direction and establishing and overseeing the policies and financial position of Shaw, and monitoring the business and affairs on behalf of its shareholders, by whom the Directors are elected and to whom they are accountable.

Further, the Board takes specific responsibility for:

• the appointment and removal of the Managing Director and the Company Secretary,
• the final approval of management’s development of corporate strategies and performance objectives,
• the review and modification of internal controls with respect to internal and legal compliance and its code of
  conduct,
• monitoring and evaluating senior management’s performance and the implementation of Shaw’s corporate strategies and objectives,
• ensuring that appropriate resources are available to achieve strategic objectives,
• the appointment of Directors to the Board and ensuring those Directors receive a letter of appointment identifying their duties and specific responsibilities, Shaw’s expectations of them, their remuneration and their obligations with respect to advising Shaw of any compliance matters.

The Board is responsible for the overall Corporate Governance of Shaw including the strategic direction,
establishing goals for management and monitoring the achievement of these goals.

On 26 April 2007 Shaw established a formal Board Charter as per Recommendation 1.1. In broad terms, the Board is accountable to the shareholders and must ensure that Shaw is properly managed to protect and enhance shareholders’ wealth and other interests. The Board Charter sets out the role and responsibilities of the Board of Shaw within the governance structure of Shaw and its related bodies corporate (as defined in the Corporations Act).

Responsibilities of the Board

In general, the Board is responsible for, and has authority to determine all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of Shaw.

In general, the principal functions and responsibilities of the Board include the following:

Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board, management and employees,

Strategy Formulation: working with senior management to set and review the overall strategy and goals for the
Company and ensure that there are policies in place to govern the operation of the Company,

Overseeing Planning Activities: overseeing the development of the Company’s strategic plan and approving that plan as well as the annual and long term budgets,

Shareholder Liaison: ensuring effective communication with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company,

Monitoring, Compliance and Risk Management: overseeing the Company’s risk management, compliance and
accountability systems and monitoring and directing the financial and operational performance of the Company,
1aw River Annual Report
Company Finances: approving expenses in excess of those approved in the annual budget and approving and monitoring acquisitions, divestitures and financial and other reporting,

Human Resources: appointing, and where appropriate, removing the Managing Director (MD) and Chief Financial Officer (CFO) as well as reviewing the performance of the MD and monitoring the performance of senior management in their implementation of the Company’s strategy,

Ensuring the Health, Safety and Well-Being of Employees: developing a policy, and in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems to ensure the well-being of all employees,

Delegation of Authority: delegating appropriate powers to the MD to ensure the effective day-to–day management of the Company,

Environmental Management: developing a policy, and in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company’s environmental management systems.