Announcement PDF Xref Limited ABN 34 122 404 666 2021 Corporate Governance Statement The Board of Directors of Xref Limited (Xref or the Company) is responsible for the corporate governance of Xref, and acknowledges the importance of the Corporate Governance Principles and Recommendations set by the Australian Securities Exchange (ASX) Corporate Governance Council in its ASX Principles and Recommendations. The Company has transitioned to the fourth edition of the ASX Corporate Governance Principles and Recommendations, which was released on 27 February 2019. The Board is aware that entities with a 30 June balance date were required to measure their governance practices against the recommendations in the fourth edition commencing with the financial year beginning 1 July 2020 and ending 30 June 2021. The Board has reviewed its corporate governance documentation and practices against these ASX Principles and Recommendations, and has adopted them, as far as it can, in view of Xref’s current size, resources and extent of the nature of its operations. The Board will continue to work towards full compliance with the Principles and Recommendations in line with the growth and development of the Company in the years ahead. Xref has noted in this Corporate Governance Statement where its framework is different to the ASX Principles and Recommendations, and the reasons why this is the case. Copies of the corporate governance policies and charters adopted by the Board are available in the Company’s Corporate Governance Manual located in the Investor Hub found under the Resources section of the landing page of Xref’s website at https://xf1.com. The Company’s Corporate Governance Statement, prepared in accordance with ASX Listing Rules 4.7.4 and 4.10.3, which was approved by the Board on 26 August 2021 and reports on the period from 1 July 2020 to 30 June 2021 (i.e. the recent reporting period), is set out below and in the Investor Hub located under the Resources section of the landing page at the top of Xref’s website at https://xf1.com. Principle 1: Lay solid foundations for management and oversight The Company has and discloses a Board Charter setting out (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. This Charter can be found in the Company’s Corporate Governance Manual located in the Investor Hub found under the Resources section of the landing page of Xref’s website at https://xf1.com. During the recent reporting period, the Directors of Xref included Non-Executive Chairman Mr Brad Rosser (appointed on 18 August 2016), Executive Director and Chief Executive Officer (CEO) Mr Lee-Martin Seymour (appointed on 18 January 2016), Executive Director and Chief Strategy Officer Mr Timothy Griffiths (appointed on 18 January 2016 and ceased to be a Director on 5 March 2021), and Non-Executive Directors Mr Nigel Heap (appointed on 18 August 2016) and Mrs Lija Wilson (appointed on 2 June 2021). The skills, experience and expertise relevant to the position of Director is disclosed within the Directors’ Report of Xref’s Annual Report and in the Investor Section located under the Resources section of the landing page of Xref’s website at https://xf1.com. The term of office held by each Director is disclosed above and in the Notice of Annual General Meeting for Directors seeking reelection. A Director may be elected for a term of a maximum of three years. To ensure a gradual and controlled movement of Directors, the longest serving one-third of all Directors retires at each Annual General Meeting (AGM), but shall be eligible for re-election. Xref Limited 2021 Corporate Governance Statement The primary roles and responsibilities of the Company’s Board include: • the review and approval of the annual and half-year financial reports, and quarterly report and cash-flow statements; • the establishment of the long-term goals of Xref and strategic plans to achieve those goals; • the review, approval and adoption of annual budgets for the financial performance of the Company, and monitoring the results on a regular basis; • ensuring that Xref has implemented adequate internal controls together with appropriate monitoring of compliance activities; and • ensuring that the Company is able to pay its debts as and when they fall due. Xref’s executive management comprises Mr Seymour (Executive Director), Chief Financial Officer (CFO) Mr James Solomons, Chief Technology Officer (CTO) Mrs Sharon Blesson, Mr David Haines (General Manager RapidID) and Ms Karina Guerra (Group Marketing Manager, to whom the Board delegates responsibilities as outlined contractually, and as expected for these executive positions. The primary roles and responsibilities of the Company’s management include: • the operation and administration of Xref, as delegated by the Board; • implementing the strategic objectives of the Company and operating within the risk appetite set by the Board; • complying with all other aspects of the day-to-day running of Xref; and • providing the Board with accurate, timely and clear financial and other information to enable the Board to perform its responsibilities. The Company, being a reference check business, undertakes careful and appropriate checks before appointing a Director or senior executive, or putting someone forward for election, as a Director; and provides security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a Director. These include checks as to the person’s character, experience, education, criminal record and bankruptcy history. The following information about a candidate standing for election or re-election as a Director is provided to security holders to enable them to make an informed decision on whether or not to elect or re-elect the candidate: • • • • • 2|P a g e biographical details, including their relevant qualifications and experience, and the skills they bring to the Board; details of any other material directorships currently held by the candidate; in the case of a candidate standing for election as a Director for the first time: ▪ any material adverse information revealed by the checks the Company has performed about the Director; ▪ details of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his or her capacity to bring an independent judgement to bear on issues before the Board, and to act in the best interests of Xref and its security holders generally; and ▪ if the Board considers that the candidate will, if elected, qualify as an independent Director, a statement to that effect; in the case of a candidate standing for re-election as a Director: ▪ the term of office currently served by the Director; and ▪ if the Board considers the Director to be an independent director, a statement to that effect; and a statement by the Board as to whether or not it supports the election or re-election of the candidate. Xref Limited 2021 Corporate Governance Statement A candidate for appointment or election as a Non-Executive Director must provide the Board with the information above and a consent for Xref to conduct any background or other checks the Company would ordinarily conduct. The candidate also provides details of his or her other commitments and an indication of time involved, and should specifically acknowledge to Xref that he or she will have sufficient time to fulfil his or her responsibilities as a Director. Xref has a written agreement with each Director and senior executive setting out the terms of their appointment. The Directors and senior executives have a clear understanding of their roles and responsibilities, and of the Company’s expectations of them, and this has been reduced to a written agreement. This agreement takes the form of a letter of appointment in the case of a Non-Executive Director and a service contract in the case of an Executive Director or other senior executive. The Company Secretary of Xref is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board, and plays an important role in supporting the effectiveness of the Board and its Committees. The role of the Company Secretary includes: advising the Board and its Committees on governance matters; monitoring that Board and Committee policy and procedures are followed; ensuring that the business at Board and Committee meetings is accurately captured in the minutes; and helping to organise and facilitate the induction and professional development of Directors. Each Director is able to communicate directly with the Company Secretary and vice versa. A decision to appoint or remove the Company Secretary is made by the Board. The Company has and discloses a Diversity Policy in the Company’s Corporate Governance Manual located in the Investor Hub found under the Resources section of the landing page of Xref’s website at https://xf1.com. Through its Board, the Company: sets measurable objectives for achieving gender diversity in the composition of its Board, senior executives and workforce generally; charges management with designing, implementing and maintaining programmes and initiatives to help achieve those measurable objectives; and reviews with management at least annually Xref’s progress towards achieving those measurable objectives and the adequacy of the Company’s programmes and initiatives in that regard. The Diversity Policy addresses equal opportunities in the hiring, training and career advancement of Directors, officers and employees. It outlines the process by which the Board will set measurable objectives to achieve the aims of its Diversity Policy, with particular focus on gender diversity, within the Company. The Board remains conscious of the requirement to establish reasonable objectives for achieving gender diversity. The Company discloses, in relation to each reporting period, the measurable objectives for achieving gender diversity set by the Board and the Company’s progress towards achieving the measurable objectives. As at the end of the recent reporting period, the measurable objectives for achieving gender diversity set by the Board in accordance with Xref’s Diversity Policy and its progress towards achieving them included: achieving greater gender diversity when a directorship position became open and the first woman was appointed on the Board of the Company as a Director; and the fact that there is now an equal number of men and women in senior executive positions since the recent appointment of a third woman in a senior executive position. The review with management of the Company’s progress towards achieving those measurable objectives, and the adequacy of the Company’s programmes and initiatives in that regard in relation to the recent reporting period has taken place. The respective proportions of men and women on the Board at the end of the recent reporting period are three men and one woman, in senior executive positions are three men and three women, and across the whole workforce are 32 men and 29 women (excluding Non-Executive Directors), of which ten women hold 3|P a g e Xref Limited 2021 Corporate Governance Statement global management positions within the Company and three women hold regional management positions. Xref defines “senior executive” for these purposes as the Company’s Executive Director, CFO, CTO and Company Secretary (key management personnel), and very senior staff reporting directly to the Executive Director. Further information can be found in the Remuneration Report section of the Annual Report. The Company has and discloses a process for evaluating the performance of the Board, its Committees and individual Directors for each reporting period using evaluation questionnaires. For each reporting period, a performance evaluation has been undertaken in accordance with that process. The next evaluation process by the Board has commenced and will be completed over the coming months. Performance is reviewed as part of the ordinary course of meetings of the Directors, and is considered by Shareholders through the approval of Directors’ appointments at the AGM. Xref also has a Board Performance Review Policy, which can be found in the Company’s Corporate Governance Manual located in the Investor Hub found under the Resources section of the landing page of Xref’s website at https://xf1.com. The Company has and discloses a process for evaluating the performance of its senior executives for each reporting period, and discloses, for each reporting period, whether a performance evaluation was undertaken in accordance with that process. Given the limited number of senior executives, their performance is (and will in the short term continue to be) reviewed annually by the Board, and the Remuneration and Nomination Committee, and as part of the ordinary course of meetings of the Directors. In relation to the recent reporting period, such performance evaluations were undertaken in this period in accordance with these processes. Principle 2: Structure the Board to be effective and add value The Board of the Company has a joint Remuneration and Nomination Committee, which has three members. A majority of the Directors on this Committee was not made up of Independent Directors during the recent reporting period, but this has since been rectified, as Independent Director Mrs Wilson joined as a member of this Committee on 8 July 2021 replacing Mr Seymour on that date. Now the Committee has a majority (two out of three) of Independent Directors. However, the Committee is not chaired by an independent Director because there was only one Director of Xref (i.e. Mr Heap), as at the end of the reporting period, who was considered to be an Independent Director (refer below re Independent Directors). The Nomination Committee Charter can be found in the Company’s Corporate Governance Manual in the Investor Hub located under the Resources section of the landing page at the top of Xref’s website at https://xf1.com. At the start of the recent reporting period the members of this Committee were Messrs Rosser (Committee Chairman), Heap and Seymour. However, as at 8 July 2021 the members of this Committee were Mr Rosser (Committee Chairman), Mr Heap and Mrs Wilson. As at the end of the reporting period, the Remuneration and Nomination Committee had not met throughout the period, but has met once subsequent to the end of this period, and Mr Rosser, Mr Heap and Mrs Wilson all attended the meeting. The Directors consider that the current structure and composition of the Board is, at this point in time, appropriate to the size and nature of operations of the Company. The processes Xref 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 include reviewing Board performance, size and capacity (with appropriately-experienced Directors). The Board periodically reviews the time required from a Non-Executive Director and whether or not Directors are meeting that requirement. Non-Executive Directors must inform the Chairman before 4|P a g e Xref Limited 2021 Corporate Governance Statement accepting any new appointment as a director of another listed entity, any other material directorship or any other position with a significant time commitment attached. The Company has and discloses a Board Skills Matrix (see Appendix A below) setting out the mix of skills that the Board currently has, and is looking to achieve, in its membership. Xref views this as a useful tool that can help identify any gaps in the collective skills of the Board that should be addressed as part of its professional development initiatives for Directors and in its Board succession planning. The Board Skills Matrix was reviewed and modified during the recent reporting period. The Board is conscious of the need for the independence of its Directors and ensures that, where a conflict of interest may arise, the relevant Director(s) leave the meeting to ensure a full and frank discussion of the matter(s) under consideration by the rest of the Board. The names of the Company’s Directors considered by the Board to be independent Directors are Mr Heap and Mrs Wilson. Messrs Rosser and Heap have received options from the Company in recognition of the fact that Xref is at a stage of its development where it wishes to minimise its cash outgoings and, accordingly, remunerates them for their services as Directors partly in equity. However, the Board is of the opinion that, based on the number of options and the Director’s Fee received by Mr Heap this does not compromise the independence of him as a Director. The Board is of the opinion that, based on the number of options and the Fees received by Mr Rosser, this could be seen to compromise the independence of him as a Director and, for this reason, it regards him as not being an Independent Director. Mr Seymour is an Executive Director and substantial shareholder, and is therefore not an Independent Director. The length of service of each of the current Directors is as follows: Mr Seymour – five years and eight months, Messrs Rosser and Heap – five years, and Mrs Wilson – three months. A majority of the Board of Xref is not made up of Independent Directors. Two of the four Directors of the Board are not considered to be Independent Directors (refer above re Independent Directors). It is the view of the Directors that the Board is of an appropriate size and composition at the current stage of the Company’s development, with suitable skills and commitment, to enable it to discharge its duties effectively. This matter will be reviewed at least annually. The Chairman of the Board of the Company is not an independent Director, but is not the same person as the CEO of Xref. The Company has a programme for inducting new Directors and for periodically reviewing whether or not 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. Each Director of the Company has the right to seek independent professional advice at the expense of the Company. Prior approval from the Chairman is required, but this will not be unreasonably withheld. Principle 3: Instil a culture of Acting Lawfully, Ethically and Responsibly Xref articulates and discloses its core values as follows: The Company’s mission is to remove barriers to hiring success. In this demand-driven world, trust has never been more important. Xref empowers great recruitment decisions with a platform that businesses can trust to verify their hires, and candidates can rely on to help them reach their potential. The Company is positively charged, with an incessant desire to succeed. Xref believes in challenging the status quo and providing extreme value. The Company values innovation, passion, curiosity, honesty, integrity and teamwork. The guiding principles and norms that define what type of organisation Xref aspires to be and what it requires from its Directors, senior executives and employees to achieve that aspiration, are that the Company removes the distraction of manual processes, delivers insights that inform decision-making 5|P a g e Xref Limited 2021 Corporate Governance Statement and put essential tools at the fingertips of every business looking to build the best team. It is Xref’s goal to make a real difference in whatever the Company does. Xref is redefining traditional processes by building meaningful and relevant solutions. The Company has an unwavering passion for success. Xref puts people first with its solution and in its workplace. The link between the Company’s purpose (why it exists) and its strategic goals (what it hopes to do) is shown by expressing the standards and behaviours it expects from its Directors, senior executives and employees to fulfil its purpose and meet its goals. Xref is committed to complying fully with its legal obligations, and to acting ethically and in a socially responsible manner. Xref strives to act ethically and responsibly at all times, and has a formal Code of Conduct for its Directors, senior executives and employees, reflecting the Company’s size and the close interaction of individuals throughout the organisation. The Code of Conduct, including the Company’s mission and objective, and its policies, standards and guidelines, is disclosed in Xref’s Corporate Governance Manual in the Investor Hub located under the Resources section of the landing page at the top of Xref’s website at https://xf1.com. Xref’s Code of Conduct requires that Directors and management conduct themselves with the highest ethical standards. All Directors and employees are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. Xref ensures that the Board is informed of any material breaches of its Code of Conduct by a Director or senior executive, and any other material breaches of the Code that call into question the culture of the organisation. The Company follows safe work practices, conducts its activities honestly and ethically, and treats people with respect and dignity. Xref values the community and environment in which it operates, and holds in high regard innovation and reliability from all employees. The Code of Conduct reflects the Company’s core values, and documents the ethical standards and conduct by which Xref and its employees will undertake business dealings. The Company has a Whistleblower Policy, which is disclosed in Xref’s Corporate Governance Manual in the Investor Hub located under the Resources section of the landing page at the top of the Company’s website at https://xf1.com. This Policy: encourages employees to come forward if they have concerns that Xref is not acting lawfully, ethically or in a socially responsible manner and provides suitable protections if they do; and ensures that the Board is informed of any material concerns raised under the Policy that call into question the culture of the organisation. The Company has an Anti-Bribery and Corruption Policy, which is disclosed in Xref’s Corporate Governance Manual in the Investor Hub located under the Resources section of the landing page at the top of the Company’s website at https://xf1.com. The Policy requires that the Board is informed of any material breaches of that Policy. Principle 4: Safeguard the Integrity of Corporate Reports The Board of Xref has a joint Audit and Risk Committee, which currently has two members. At the start of the recent reporting period the Committee had three members, being Messrs Heap (Committee Chairman), Rosser and Griffiths, but Mr Griffiths ceased to be a Director (and hence a member of this Committee) on 5 March 2021. Mrs Wilson will commence as the third member of the Audit and Risk Committee in September 2021. All of the members of this Committee are currently Non-Executive Directors (at the start of the recent reporting period two out of three members were Non-Executive Directors) and this will still be the case when Mrs Wilson joins the Committee. A majority of this Committee is not currently made up of Independent Directors (one out of two) and 6|P a g e Xref Limited 2021 Corporate Governance Statement was not made up of Independent Directors at the start of the reporting period (one out of three), but it will be a majority when Mrs Wilson joins in September 2021. Mr Heap, an Independent Director who is not the Chairman of the Board, is the Committee Chairman. The Charter of the Committee can be found in the Company’s Corporate Governance Manual, which is located in the Investor Hub under the Resources section of the landing page at the top of Xref’s website at https://xf1.com. The Directors on this Committee have the applicable expertise and skills for an Audit Committee, and the relevant qualifications and experience of the members of the Audit and Risk Committee can be found on the Company’s website at https://xf1.com, and in the Company’s Annual Report. The Audit and Risk Committee reports to the Board after each of its meetings. In conjunction with the full Board, the Committee reviews the performance of the external Auditor (including the scope and quality of the audit). In relation to the recent reporting period, the Committee met twice throughout the period, once with Messrs Heap (Committee Chairman), Rosser and Griffiths in attendance, and once with Messrs Heap (Committee Chairman) and Rosser (Mr Griffiths was absent for this meeting). Xref has formal and rigorous processes that independently verify and safeguard the integrity of its corporate reporting. The Board of the Company, before it approves Xref’s financial statements for a financial period, receives from its CEO and CFO a declaration that, in their opinion, the financial records of the Company 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 Xref, and that the opinion has been formed on the basis of a sound system of risk management and internal control that is operating effectively. The Company ensures that its external Auditor attends its AGMs and is available at these meetings to answer any questions from security holders relevant to the audit. Xref has and discloses its process to validate that its annual Directors’ Report, and any other corporate reports it releases to the market, are accurate, balanced and understandable, and the Company provides investors with appropriate information to make informed investment decisions. Xref discloses 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. Such reports are reviewed by the Board, which notes the receipt of the CEO and CFO Declarations on the accuracy of these reports. The operating and financial review included in the annual Directors’ Report contains information that shareholders reasonably require to make an informed assessment of Xref’s operations, financial position, business strategies and prospects for future financial years. The Company prepares Quarterly Activity Reports and Quarterly Cash Flow Reports that are not subject to audit or review by Xref’s external auditor. As the Company grows, it will consider the production of other corporate reports, such as a “sustainability report”, to provide insights into other aspects of its operations. The Company holds investor update conference calls whereby it informs the attendees of the current shape of the business and its outlook, and those joining are encouraged to ask questions. Xref’s annual Directors’ Report is not subject to assurance by the Company’s external auditor, other than the Remuneration Report and, accordingly, the Board of Directors and senior executives validate that the report is accurate, balanced and understandable, and provides the market with appropriate information to make informed investment decisions. Principle 5: Make timely and balanced disclosure Xref has a written policy for complying with its continuous disclosure obligations under ASX Listing Rule 3.1 and this Continuous Disclosure Policy can be found in the Company’s Corporate Governance 7|P a g e Xref Limited 2021 Corporate Governance Statement Manual in the Investor Hub located under the Resources section of the landing page at the top of Xref’s website at https://xf1.com. In accordance with ASX Listing Rule 3.1, once the Company is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the Company’s securities, the Company immediately tells ASX that information. The Company complies with the Continuous Disclosure requirements of the ASX Listing Rules and, accordingly, the market is kept fully up-to-date and currently informed about all material matters that might affect trading in Xref’s securities. The Company makes timely and balanced disclosure of all matters concerning it that a reasonable person would expect to have a material effect on the price or value of its securities. Xref, its Directors and staff are very aware of the ASX’s continuous disclosure requirements, and operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market, and, accordingly, continuous disclosure is a separate Agenda item at each Board meeting. Xref’s Board approves market announcements before they are lodged with ASX. The Company then ensures that its Board receives copies of all announcements under ASX Listing Rule 3.1 promptly after they have been released to the market. The Company Secretary has set up in ASXOnline all of the Directors’ email addresses so that they automatically receive all ASX announcements once they have been released to the market. When Xref gives a new and substantive investor or analyst presentation it releases a copy of the presentation materials on the ASX Market Announcements Platform ahead of the presentation. Principle 6: Respect the rights of security holders The Company provides information about itself and its governance to investors via its website at both www.xref.com and https://xf1.com with a link to the Investor Hub located under the Resources section of the landing page at the top of Xref’s website to all relevant corporate governance information, including the Corporate Governance Manual (which contains Xref’s policies and charters) and the Corporate Governance Statement. The Investor Hub also includes the Company’s lat