Elixinol Wellness : Corporate Governance Statement and Appendix 4G

For personal use only

Corporate Governance Statement

2021

The Board of Elixinol Wellness Limited (the "Company", "EXL" or "Group") recognises the importance of having proper and effective corporate governance arrangements and communicating our approach to corporate governance to our shareholders and the broader investment community to instill investor confidence in the Company.

The Board and management team maintain high standards of corporate governance as part of our commitment to create value for our stakeholders through effective strategic planning, risk management, transparency, and corporate

onlyresponsibility.

Our governance policies and practices have been consistent with the 4th edition of the ASX Corporate Governance Council's Principles and Recommendations (ASX Governance Principles) throughout the year. These policies and practices are reflected in this Statement as well as our Appendix 4G.

We regularly review our governance practices in light of the growth in the Company and relevant emerging corporate governance developments. Our governance framework ensures accountability, both of the Board and senior executives, to the Company and our shareholders.

This Statement was approved by the Company's Board on 25 February 2022 and is current as at that date.

useThe Board lays solid foundations for management and oversight

Board responsibilities and delegations

The Board is appointed by and represents shareholders, the owners of EXL. It is accountable to shareholders for creating and delivering sustainable value through effective governance of EXL. All Directors must contribute to the Board's collective decision-making process having regard to the skills and experience that each Director brings to

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EXL's Board. Details of each of EXL's Directors (and its Committee members) are located on EXL's website at
www.elixinolglobal.com/site/About-Us/board-of-directors.
The Board Charter provides a framework for the effective operation of the Board, which sets out the:
•	Board's role and responsibilities;
•	the establishment of Committees (described below); and
•	the authority delegated by the Board to the Global Chief Executive Officer and to the Committees.

The Board's role includes providing leadership and guiding EXL's strategic direction, driving its performance and overseeing the activities of management and the operation of EXL. A key part of the Board's responsibilities is to implement and oversee an effective corporate governance structure for EXL.

The Board Charter specifies the role of the Chair, the Board composition and the responsibilities of Directors. It also provides that the Company Secretary is accountable to the Board through the Chair and that the Company Secretary is to advise the Board and its Committees on all governance matters and coordinate all Board and Committee business.

The Board Charter also allocates the decision-making authority within EXL and sets out the matters reserved for ForBoard decision. The Board delegates to the Global Chief Executive Officer authority and power to manage EXL's business on a day-to-day basis, subject to the limits imposed by the Board. In turn, the Global Chief Executive Officer may delegate aspects of his authority to Senior Executives but remains accountable to the Board for the authority that is delegated and for the performance of EXL, with the expectation that the Global Chief Executive Officer works in a constructive partnership with the Board. The Board monitors the decisions and actions of the Global Chief Executive Officer, the performance of EXL and assesses its risk profile with the assistance of each of its Committees.

The Board Charter also describes the Global Chief Executive Officer's role and responsibilities.

The Board Charter is located on EXL's website at https://www.elixinolwellness.com/site/About-Us/corporate-governanceand was last reviewed in December 2021.

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Board Committees

The Board has established the following Committees to assist it in discharging its functions:

•	Remuneration and Nomination Committee (RNC); and
•	Audit and Risk Committee (ARC).
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Each of these Committees operate in accordance with specific Charters approved by the Board which can be found on EXL's website at https://www.elixinolwellness.com/site/About-Us/corporate-governance.The applicable composition requirements as stated in the Committee Charters and current membership of each of the Committees is described in detail below.

Board meetings and attendance

useThe Board meets as often as necessary to fulfil its role. Directors are required to allocate sufficient time to EXL to perform their responsibilities effectively, including adequate time to prepare for Board meetings. The Company has disclosed the number of times the Board, the RNC and the ARC met throughout the reporting period on page 20 of the Annual Report. Senior Executives attend Board and Committee meetings by invitation.

Access to information and independent professional advice

Management are required to report regularly to the Board in a spirit of openness on the progress being made by EXL.

Directors are entitled to request additional information at any time they consider it appropriate. An open dialogue personalbetween individual Directors and the Global Chief Executive Officer and Senior Executives is encouraged.

The Board collectively, and each Director individually, has the right to seek independent professional advice, at EXL's expense.

Director and Executive Agreements

The Company has entered into written agreements with Ms Helen Wiseman and Mr Paul Benhaim. Each agreement ets out the terms of the appointment of Ms Wiseman and Mr Benhaim as non-executive Directors.

The Company has entered into executive employment agreements with each of the senior executive management team including the Company's Executive Director, Mr Oliver Horn.

All Directors and Executives are required to comply with all of EXL's corporate policies including the Code of Conduct, Conflict of Interest Policy, Compliance Policy, Anti-Bribery and Corruption Policy and the Securities Trading policy.

Diversity and Inclusion

ForThe EXL Group has a diverse employee base, employing people in Australia, the USA, Europe and the UK.

EXL values a strong and diverse workforce and is committed to establishing, maintaining and promoting a corporate culture that embraces diversity and inclusion.

EXL seeks to create a work environment where people are free to achieve their best, without encountering prejudice regarding their gender, age, ethnicity or cultural background, disability or impairment, religious belief or activity, marital status or lawful sexual activity. EXL will not tolerate any form of unlawful discrimination, harassment, vilification or victimisation of an employee who raises concerns or provides information about such conduct.

EXL also acknowledges the need for its employees to combine and balance their career and family obligations and recognises the importance of caring for family members. EXL will, to the extent practicable, adopt flexible work practices that will assist employees to meet their domestic responsibilities.

The Board fully supports all kinds of diversity; however, the Board did not set measurable objectives against which EXL will report on an annual basis. Given the current size of the Group's operations and number of employees, the

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EXL (entire organisation)

34%

45%

Management

34%

40%

34%

33%

Executive Leadership Team**

Board of Directors

33%

33%

EXL level

Percentage of women in 2020*

Current percentage of women

Board has determined at this stage not to adopt such measurable objectives or set targets at this time. Notwithstanding this, the Board and management are mindful of considered diversity within its recruitment practices.

EXL has adopted a Diversity Policy, a copy of which is available on EXL's website at: https://www.elixinolwellness.com/site/About-Us/corporate-governance.

The RNC is responsible for reviewing the Diversity Policy. The Diversity Policy was last reviewed in December 2021. onlyEXL's Diversity Policy includes gender diversity. As such, female representation at EXL is set out below.

use* As reported in the 2020 Corporate Governance Statement.

** Senior Executives includes the Executive Key Management Personnel of the Company as outlined in the Remuneration Report for FY2021.

Aside from the Diversity Policy set out above, the Company has not established measurable objectives for gender personaldiversity in the workforce.

In September 2021, EXL launched its "Women @ Elixinol" community initiative to help drive tangible and meaningful impact for the Company's culture, community, careers, clients and customers. This initiative is a forum i tended for women, men and gender diverse people across all of EXL's teams that helps champion Women at EXL.

EXL respects the benefits arising from workplace diversity to broaden perspective, improve performance and increase shareholder value. EXL aims to promote an environment conducive to the appointment of diverse well qualified employees, senior managers and directors to maximise the achievement of corporate goals.

Performance review of the Board

The Board is committed to enhancing its effectiveness through ongoing reviews. The Board is committed to enhancing its effectiveness through ongoing reviews. The Board's Charter provides that the Board will evaluate, at least annually, the performance of the Board, each Board Committee and each Director. The responsibilities of the RNC include assisting the Board with these performance evaluations. The Board undertook a number of formal and informal performance evaluations in respect of the Board and the Board Committees throughout the reporting period.

ForPerformance Review of the Executive Leadership Team

At the start of each financial year, key performance indicators (KPI) for the Executive Leadership Team (ELT) are reviewed and recommended to the Board by the RNC. At the end of the year, the RNC assessed the ELT's performance against KPIs. These assessments are reviewed and reported to the Board by the RNC.

In respect of FY2021, a performance evaluation of the ELT was conducted during 2021. KPI performance for the ELT is described in the Remuneration Report from page 21 to 29 of the Annual Report, located on EXL's website at https://www.elixinolwellness.com/site/investor/annual-and-financial-reports

KPIs in respect of FY 2022 for the ELT were established in December 2021 and January 2022.

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The Board is structured to be effective and add value

Remuneration and Nomination Committee (RNC)

The RNC has three members, one of which is an independent Non-Executive Director Ms Helen Wiseman, Non- Executive Director Mr Paul Benhaim and Executive Director Mr Oliver Horn. Mr Benhaim and Mr Horn are not onlyconsidered independent given Mr Benhaim's tenure as an Executive Officer of EXL within the past three years and

Mr Horn as the current Global Chief Executive Officer.

While the composition of the RNC does not result in a majority of independent Directors, the Board believes the current RNC reflects an appropriate mix of experience and ability to discharge its duties effectively.

Details of Committee members, their Committee meeting attendance and their qualifications and financial expertise are set out in the 2021 Annual Report located on EXL's website at: https://www.elixinolwellness.com/site/investor/annual-and-financial-reports

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The RNC Charter sets out the role and responsibilities of the RNC and the Charter is located on EXL's website at
https://www.elixinolwellness.com/site/About-Us/corporate-governance.	The RNC Charter was reviewed in
December 2021.

Board composition and Director selection/appointment/induction process

The Board believes orderly succession and renewal will be achieved as a result of careful planning. While the current Board has been in place for almost two years, the composition of the Board will be periodically reviewed within the

personalimit imposed by the Constitution (maximum eight Directors).

The Board is currently comprised of one independent Non-Executive Director, one Non-Executive Director, and one Executive Director. While the composition of the current Board does not result in a majority of independent Directors, the Board believes the current Board reflects an appropriate mix of experience and ability to represent shareholders. The Board intends that the Board will comprise Directors with a broad range of skills, expertise and experience from a diverse range of backgrounds that is appropriate to EXL and its international growth strategy.

When appointing new Directors, the Board, in discharging its nominations related responsibilities, evaluates the balance of skills, knowledge and experience on the Board as well as the terms served by existing Non-Executive Directors. In light of this evaluation, the Board determines the role and capabilities required for the appointment.

At commencement of a Director selection process, the Board will undertake appropriate checks on potential candidates to consider his or her suitability to fill a casual vacancy on the Board or for election as a Director. Prior to appointment, candidates are required to provide the Chair with details of other commitments and an indication of time involved, and to acknowledge that he or she will have adequate time to fulfil his or her responsibilities as a Non- Executive Director of EXL. EXL have entered into a written agreement with each Director (and Senior Executive) setting out the key terms, conditions and responsibilities of their position.

As part of a mutual due diligence process between the Board and a potential candidate, the potential Director is Forprovided a suite of documentation (being a combination of public and private materials), subject to strict confidentiality

arrangements.

Once appointed, new Directors will undergo an induction program during which they meet the ELT and will be given a full briefing on EXL operations, its strategies, the nature of its various businesses, its financial position and performance and its operational and risk management.

Directors appointed to fill a casual vacancy hold office until the end of EXL's next annual general meeting (AGM), where they can seek election by shareholders. Directors are re-elected in accordance with the Constitution and the ASX Listing Rules. On recommendation from the RNC, the notice of AGM contains all material information about candidates so that shareholders can make an informed decision on whether or not to elect or re-elect a Director.

Non-Executive Directors are expected to inform the Chair of any proposed appointment to the Board or executive of another company as soon as practicable.

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