Governance

Genesis is committed to the highest standards of behaviour and accountability and has adopted formal policies to ensure that this is achieved, consistent with best practice and stock exchange rules and recommendations regarding corporate governance.

The Directors of Genesis are elected by shareholders and are responsible for the direction and supervision of the company’s business. The Board has determined that its principal responsibilities are:

To create shareholder value through the approval of appropriate corporate strategies with particular regard to return expectations, allocation of resources, financial policy and the review of performance against strategic objectives;
To appoint the Chief Executive and monitor the appointment of senior executives, review their performance, remuneration and succession plans;
To ensure that material information is disclosed to the market as soon as possible in a fair, accurate and balanced manner;
To approve and foster a corporate culture which requires management and every employee to operate to the highest level of ethical and professional behaviour;
To approve major transactions relating to acquisitions and divestments and capital expenditure exceeding delegated authorities;
To review operating performance, research achievements and the progress of regulatory procedures, against budgets and other performance goals and to monitor corrective action by management;
To ensure that appropriate external advice is available to management and the Board;
To recruit Directors and to regularly review and assess Board and subcommittee performance;
To establish and review processes to assist the effective operation of the Board;
To appoint auditors, communicate with shareholders and monitor regulatory compliance; and
To ensure governance issues are reviewed periodically and managed appropriately.

The performance of the Board and individual directors is reviewed annually. The performance of senior executives is reviewed annually by the Board without the presence of those executives. Performance evaluations for senior executives were undertaken during the past year in accordance with the standard process.

A procedure has been agreed by the Board for any director to take independent professional advice at the expense of the company if required.

Delegation of Authority The formulation and implementation of policies and reporting procedures, other than those set out above, has been delegated to management. The Board monitors that delegation as part of the formal business of Board meetings.

Board Membership The Board currently comprises five non-executive Directors. The Board periodically reviews its membership and seeks to maintain a balance of Directors with complementary business expertise and biotechnology experience who will, at all times, act with an independent mind, in accordance with the highest ethical standards and contribute in a positive and constructive manner to Board discussion and debate. The Board will ensure that a majority of the Directors are non-executive and have no professional relationship with the company. Nomination and appointment of new Directors is undertaken by the full Board.

In accordance with the Company’s Constitution, any newly appointed directors and those retiring by rotation will be subject to re-election at the next annual meeting.

Directors Share Trading The company will promptly notify the NZSX and ASX if any Director or Officer acquires or disposes of Genesis securities.The Directors have implemented policies that restrict all directors and employees from buying or selling Genesis shares for a period prior to announcement of half and full year results.

Board Committees The Board has formally constituted two permanent Board Committees, the Audit Committee and the Remuneration Committee. The Audit Committee is regulated by a charter that addresses membership, function, specific responsibilities, and reporting procedures, consistent with the requirements of NZX Listing Rule 3.6.3. It is chaired by Mr J N McLean who has a financial background. Current members of the Audit Committee are Mr J H von Roy and Dr S J Washer.

The Audit Committee is responsible for:

Reviewing draft annual and half yearly financial statements prior to submission to the Board for approval;
Agreeing with the external auditors on the nature, scope and cost of the audit;
Reviewing the performance of the external auditors;
Reviewing the effectiveness of internal control systems.
The Remuneration Committee, chaired by Mr J H von Roy, is responsible for:
Establishing and reviewing remuneration policy for the Board and staff;
Reviewing succession planning;
Administration of the Employee Share Option Plan;
Review and recommendation of governance issues including Board and Committee membership.

In setting remuneration policy the Committee takes into consideration employee performance and comparable market rates. These procedures are designed to attract, motivate and retain quality staff. The Board has adopted a comprehensive policy addressing committee membership, function, responsibilities and reporting procedures. Currently all directors are members of the Remuneration Committee and the Committee business is conducted within the Board meetings. There are no schemes for retirement benefits for directors.

Shareholder Communication The board ensures that any material non-confidential information is provided to shareholders in accordance with the continuous disclosure requirements by release to the New Zealand and Australian Stock Exchanges and by prompt posting on the Company's web site. When appropriate, annual and half yearly reports will be supplemented by shareholder newsletters. The Board has established policies and reporting procedures for management of material business risks. Management has reported to the Board that all material business risks are being managed effectively. Governance Principles

The corporate governance principles adopted or followed by Genesis are generally consistent with the NZX Corporate Governance Best Practice Code and the ASX Corporate Governance Council Principles and Recommendations, with the following exceptions:

The company does not have a separate nomination committee due to the size of the company. This function is undertaken by the full Board acting as the Remuneration Committee;

The company does not have a performance based share compensation plan. However shareholders have approved the issue of shares to Directors in lieu of cash remuneration.

Some key policies are available at the links below:

Audit Committee Charter

Code of Conduct

Confidentiality and Continuous Disclosure

Risk Management

Trading of Genesis Securities