Announcement PDF SportsHero Limited Corporate Governance Statement 30 June 2023 This Corporate Governance Statement of SportsHero Limited (the ‘company’) has been prepared in accordance with the 4th Edition of the Australian Securities Exchange’s (‘ASX’) Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council (‘ASX Principles and Recommendations’) and is included in the company’s website pursuant to ASX Listing Rule 4.10.3. This listing rule requires the company to disclose the extent to which it has followed the recommendations during the financial year, including reasons where the company has not followed a recommendation and any related alternative governance practice adopted. The company’s ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations to the relevant disclosures in either this statement, our website or Annual Report, is contained on our website at http://sportshero.live/ Both this Corporate Governance Statement and the ASX Appendix 4G have been lodged with the ASX. This statement has been approved by the company’s Board of Directors (‘Board’) and is current as at 29 September 2023. The ASX Principles and Recommendations and the company’s response as to how and whether it follows those recommendations are set out below. Principle 1: Lay solid foundations for management and oversight Recommendation 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 company’s Board maintains the following roles and responsibilities: • being accountable for the performance of the company; • providing leadership and setting the strategic objectives of the company; • appointing the Chair and, if the company has one, the Deputy Chair and/or the “senior independent director”; • appointing, and when necessary replacing, the Chief Executive Officer (‘CEO’) and other senior executives including the company secretary; • assessing the performance of the CEO and overseeing succession plans for senior executives; • overseeing management’s implementation of the company’s strategic objectives; • approving operating budgets and major capital expenditure; • overseeing the integrity of the company’s accounting and corporate reporting systems, including the external audit; • overseeing the company’s process for market disclosure of all material information concerning the company that a reasonable person would expect to have a material effect on the price or value of the company’s securities; • ensuring that the company has in place an appropriate risk management framework and setting the risk parameters within which the Board expects management to operate; • approving the company’s remuneration framework; • monitoring the effectiveness of the company’s governance practices; and • reporting to and communications with shareholders. The Board has delegated the day-to-day management of the company to the CEO and other senior executives (‘management’). The company’s management is responsible for the following: • implementing the strategic objectives set by the Board; • operating within the risk parameters set by the Board; • operational and business management of the company; • managing the company’s reputation and operating performance in accordance parameters set by the Board; • day-to-day running of the company; • providing the Board with accurate, timely and clear information to enable the Board to perform its responsibilities; and • approving capital expenditure (except acquisitions) within delegated authority levels. Senior executives have their roles and responsibilities defined in specific position descriptions. SportsHero Limited Corporate Governance Statement 30 June 2023 Recommendation 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. Before appointing a director, or putting forward to shareholders a director for appointment, the company undertakes comprehensive reference checks that cover elements such as the person’s character, experience, employment history, qualifications, criminal history, bankruptcy history, and disqualified officer status. Directors are required to declare each year that they have not been disqualified from holding the office of director by the Australian Securities and Investments Commission (‘ASIC’). An election of directors is held each year. A director that has been appointed during the year must stand for election at the next Annual General Meeting (‘AGM’). Directors are generally appointed for a term of three years. Retiring directors are not automatically re-appointed. The company provides to shareholders for their consideration information about each candidate standing for election or reelection as a director that the Board considers necessary for shareholders to make a fully informed decision. Such information includes the person’s biography, which includes experience and qualifications, details of other directorships, adverse information about the person that the Board is aware of including material that may affect the person’s ability to act independently on matters before the Board, and whether the Board supports the appointment or re-election. Recommendation 1.3 - A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. The terms of the appointment of a non-executive director include such matters as the term of their appointment, time commitment envisaged, required committee work and other special duties, requirements to disclose their relevant interests which may affect independence, corporate policies and procedures, indemnities, and remuneration entitlements. Given the size and level of activity of the company, the company put in place a specific agreement for the company’s nonexecutive Chair. No agreements are in place for the company’s CEO and the company’s independent non-executive director Executive directors and senior executives, when appointed, will be issued with service contracts which detail the above matters as well as the person or body to whom they report, the circumstances in which their service may be terminated (with or without notice), and any entitlements upon termination. Recommendation 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 company secretary reports directly to the Board through the Chair and is accessible to all directors. The company secretary’s role, in respect of matters relating to the proper functioning of the Board, includes: • advising the Board and its committees (if applicable) on governance matters; • monitoring compliance of the Board and associated committees with policies and procedures; • coordinating all Board business; • retaining independent professional advisors; • ensuring that the business at Board and committee meetings are accurately recorded; and • assisting with the induction and development of directors. SportsHero Limited Corporate Governance Statement 30 June 2023 Recommendation 1.5 - A listed entity should: (a) have and disclose a diversity policy (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (1) the measurable objectives set for that period to achieve gender diversity; (2) the entity’s progress towards achieving those objectives; and (3) either: (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or (B) 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 has a diversity policy, although the Board has determined that no specific measurable objectives will be established until the number of employees and level of activities of the company increases to a level sufficient to enable meaningful and achievable objectives to be developed. The policy aims to provide a work environment where employees have equal access to career opportunities, training and benefits. It also aims to ensure that employees are treated with fairness and respect, and are not judged by unlawful or irrelevant reference to gender, age, ethnicity, race, cultural background, disability, religion, sexual orientation or caring responsibilities. This commitment will enable the company to attract and retain employees with the best skills and abilities. The respective proportion of women and men in the company including its subsidiaries (‘consolidated entity’) as at 30 June 2023 was: Proportion of Proportion women of men On the Board 0% 100% In senior executive positions 25% 75% Other 38% 62% Across the whole organisation 35% 65% For this purpose, the Board defines a senior executive as a person who makes, or participates in the making of, decisions that affect the whole or a substantial part of the business or has the capacity to affect significantly the company’s financial standing. This therefore includes all senior management and senior executive designated positions as well as senior specialised professionals. As no entity within the consolidated entity is a ‘relevant employer’ for the purposes of the Workplace Gender Equality Act 2012 on the basis that no entity employs 100 or more employees in Australia, there are no Gender Equality Indicators to be disclosed. Recommendation 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, for each reporting period, whether a performance evaluation was undertaken in accordance with that process during or in respect of that period. The Board reviews its performance, as well as the performance of individual committees (if applicable) and individual directors (including the performance of the Chair as Chair of the Board). The use of an external facilitator may be utilised periodically to assist in the review process. The company conducted a formalised review process for the year ended 30 June 2023. As a consequence of that review, the Board resolved not to increase the fees paid to non-executive directors and not to increase the salary of the company’s CEO. The Board and senior executives are working very closely and regular feedback, as to the respective effectiveness and contributions made by all parties, is discussed in a frank and forthright manner as a part of the Board and management undertakings. In addition to the formal review, this practice is deemed appropriate and also provides contemporary feedback as to individual performance and is likely to continue on an ongoing basis until the nature of the company’s activities demand a change to this process SportsHero Limited Corporate Governance Statement 30 June 2023 Recommendation 1.7 - A listed entity should: (a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. Assessment of the performance of senior executives is to be undertaken at least once every reporting period. Such assessment was undertaken during the reporting period and appropriate personnel changes implemented. Refer to the alternative process adopted, being more fully described in Recommendation 1.6 above. Principle 2: Structure the board to be effective and add value Recommendation 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. Given the level of activity of the company throughout the year, the Board assumed the duties and responsibilities typically delegated to an audit committee, risk committee, remuneration committee and nomination committee. As such, a nomination committee has not been established. A description of the procedures for the selection and appointment of new directors and the re-election of incumbents is contained within the Board Charter which is maintained at the company’s website. The roles and responsibilities of the Board include the following: • identification of skills and competencies required for the Board and related committees; • nomination, selection and performance evaluation of directors and senior executives; and • designing of succession plans and induction programs for directors. SportsHero Limited Corporate Governance Statement 30 June 2023 Recommendation 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. The Board’s skills matrix indicates the mix of skills, experience and expertise that are considered necessary at Board level for optimal performance of the Board. It is therefore used when recruiting new directors and assessing which skills need to be outsourced based on the attributes of the current Board members. The existence of each attribute is assessed by the Board as either, High, Medium or Low. Skill category Description of attributes required Level of importance Existence in Board Risk and compliance Identification of key risks to the company related to each key area High High of operations. Monitoring of risks, satisfy compliance issues and knowledge of legal and regulatory requirements. Financial and audit Analysis and interpretation of accounting and finance issues High High including assessment and resolution of audit and financial reporting risks, contribution to budgeting and financial management of projects and company, assessing and supervising capital management. Strategic Development of strategies to achieve business objectives, oversee High High implementation and maintenance of strategies, and identification and critical assessment of strategic opportunities and threats to the company. Operating policies Key issue identification representing operational and reputational High High risks and development of policy responses and parameters within which the company should operate. Information technology Knowledge of IT governance including privacy, data management High High and security. Executive management Performance assessments of senior executives, succession Medium Medium planning for key executives, setting of key performance hurdles, experience in industrial relations and organisational change management programmes. Age and gender Board aims for equal gender representation and range of Medium Medium experienced individuals to contribute towards better Board outcomes. The Board believes that its membership adequately represents the required skills as set out in the matrix. External consultants may be brought it with specialist knowledge to address areas where this is an attribute deficiency in the Board. In addition to the specific areas that are required at Board level identified in the matrix above, all members of the Board are assessed for the following attributes before they are considered an appropriate candidate. Board Member Attributes Leadership Represents the company positively amongst stakeholders and external parties; decisively acts ensuring that all pertinent facts considered; leads others to action; proactive solution seeker. Ethics and integrity Awareness of social, professional and legal responsibilities at individual, company and community level; ability to identify independence conflicts; applies sound professional judgement; identifies when external counsel should be sought; upholds Board confidentiality; respectful in every situation. Communication Effective in working within defined corporate communications policies; makes constructive and precise contribution to the Board both verbally and in written form; an effective communicator with executives. Negotiation Negotiation skills which engender stakeholder support for implementing Board decisions. Corporate Experienced director that is familiar with the mechanisms, controls and channels to deliver governance effective governance and manage risks. SportsHero Limited Corporate Governance Statement 30 June 2023 Recommendation 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 Board assesses annually the independence of each director to ensure that those designated as independent do not have any alliance to the interests of management, substantial shareholders or other relevant stakeholders. They must be free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect, their 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 security holders generally. Details of the Board of directors, their appointment date, length of service and independence status is as follows: Director’s name Appointment date Stratos Karousos Michael Higginson Tom Lapping 13 October 2022 21 June 2016 10 April 2017 Length of service at reporting date 11 months 7 years and 3 months 6 years and 6 months Independence status Independent Non-Executive Independent Non-Executive Non-independent Executive The Board may determine that a director is independent notwithstanding the existence of an interest, position, association or relationship of the kind identified in the examples listed under Recommendation 2.3 of the ASX Principles and Recommendations. There are no directors that the Board has declared are independent but which maintain an interest or relationship that could be perceived as impairing independence. As part of its independence assessment, the Board considered the length of time that the director has been on the Board as a prolonged service period may also be seen as an impairment to their independence. The Board concludes that no non-executive director has been on the Board for a period which could be seen to compromise their independence. Such a period is generally considered to be in excess of 10 years. Being on the Board for a period in excess of 10 years does not however constitute an automatic deeming of non-independence. Where it is determined that a non-executive director should no longer be considered independent, the company shall make an announcement to the market. Recommendation 2.4 - A majority of the board of a listed entity should be independent directors. Having regard to the response to Recommendation 2.3 above, 67% of the Board at the reporting date were independent. Recommendation 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. Mr Karousos is the chair of the Board and is considered to be an independent director of the company. Recommendation 2.6 - A listed entity should have a program for inducting new directors and for periodically reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and knowledge needed to perform their role as directors effectively. It is intended that new directors complete an induction program coordinated by the company secretary on behalf of the Board. The program would provide an explanation of company policies and procedures, governance frameworks, cultures and values, company history, director and executive profiles and other pertinent company information. The company has a procedure in place that enables directors to take independent professional advice and to undertake professional development at the expense of the company. SportsHero Limited Corporate Governance Statement 30 June 2023 Principle 3: Instil a culture of acting lawfully, ethically and responsibly Recommendation 3.1 - A listed entity should articulate and disclose its values The company maintains a code of conduct for its directors, senior executives and employees that articulate the company’s values. The company’s senior executive team has been charged with the responsibility of inculcating those values across the whole organisation. Recommendation 3.2 - A listed entity should: (a) have and disclose a code of conduct for its directors, senior executives and employees; and (b) ensure that the board or a committee of the board is informed of any material breached of that code. The company maintains a code of conduct for its directors, senior executives and employees. In summary, the code requires the following of each relevant person: • act honestly, in good faith and in the best interests of the company as a whole; • exercise a duty to use care and diligence in fulfilling the functions of office or position and exercising the powers attached to that office or position; • use the powers of office for a proper purpose and in the best interests of the company as a whole; • recognise that the primary responsibility is to the company as a whole but may, where appropriate, have regard for the interest of other stakeholders of the company; • not to make improper use of information acquired as a director or employee; • not take improper advantage of their position as a member of the Board or employee; • properly manage and declare any conflict of interest with the company; • directors to be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board; • confidential information received in the course of the exercise of their duties remains the property of the company and, unless appropriate authority granted, it is improper to disclose it, or allow it to be disclosed; • not to engage in conduct likely to affect the reputation of company; and • to comply with the spirit, as well as the letter, of the law and with the principles of this code. The company’s senior executive team is required to report to the Board any material breach of the code of conduct. The code is available on the company’s website. Recommendation 3.3 - A listed entity should: (a) have and disclose a whistleblower policy; and (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy. The company has a whistle-blower policy that has been circulated to all staff and is available on the company’s website. All material incidences reported under the company’s whistleblower policy are to be reported to the Board or a committee of the Board. Recommendation 3.4 - A listed entity should: (a) have and disclose an anti-bribery and anti-corruption policy; and (b) ensure that the board or a committee of the board is informed of any material breaches of that policy. The company has an anti-bribery and anti-corruption policy that has been circulated to all staff and is available on the company’s website. All material incidences reported under the company’s anti-bribery and anti-corruption policy are to be reported to the Board or a committee of the Board. SportsHero Limited Corporate Governance Statement 30 June 2023 Principle 4: Safeguard the integrity of corporate reports Recommendation 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. Given the size of the company and level of activity, the Board has assumed the duties and responsibilities typically delegated to an audit committee. Each Board member has free and open access to the external auditor, the company secretary, accounting personnel and the external advisors engaged by the company. The removal of the external auditor and the appointment of a new auditor requires the approval of members. The majority of the Board are independent and details of their qualifications and experience are set out in the Directors’ report. The Board has all necessary powers to undertake the role of the audit committee, and in conjunction with the Company Secretary achieves this objective by ensuring the following functions are undertaken: • review and monitor the integrity of the Annual Report, including the financial statements; • review and oversee systems of risk management, internal control and legal compliance; • review the adequacy of the corporate reporting processes; • oversee the processes for identifying significant risks facing the company and implementing appropriate and adequate control, monitoring and reporting mechanisms; and • liaise with and monitor the performance and independence of the external auditors. Recommendation 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. In relation to the financial statements for the financial year ended 30 June 2023 and the half-year ended 31 December 2022, the company’s CEO and company secretary have provided the Board with declarations, that in their opinion: • the financial records of the company have been properly maintained; • 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 • has been formed on the basis of a sound system of risk management and internal control which is operating effectively. Recommendation 4.3 - A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. All periodic corporate reports are drafted and/or vetted, in detail, by the company secretary. Should legal or any other professional opinion be required in relation to the periodic corporate report, then the company secretary will obtain such opinion which will be incorporated into the periodic corporate report. All periodic corporate reports are then circulated to all Board members for their approval prior to release. SportsHero Limited Corporate Governance Statement 30 June 2023 Principle 5: Make timely and balanced disclosure Recommendation 5.1 - A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under Listing Rule 3.1. Listing Rule 3.1 requires a listed entity, subject to certain exceptions, to disclose to ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of its securities. The company is committed to providing the market with complete and timely information about disclosure events in compliance with its continuous disclosure obligations and the Corporations Act 2001. The company maintains a written policy that outlines the responsibilities relating to the directors, officers and employees in complying with the company’s disclosure obligations. Where any such person is of any doubt as to whether they possess information that could be classified as market sensitive, they are required to notify the company secretary immediately, in the first instance, so that appropriate analysis a