ANNUAL REPORT 2011 Principle 2: Structure the board to add value Chairman and Chief Executive Officer (CEO) (2.2, 2.3) Independent directors (2.1) Nomination committee (2.4) managing director and other senior executives. This  annual remuneration review encompasses performance  reviews of those individuals. Information regarding directors’ experience and responsibilities is included in the Directors’ Report section of the Annual Report.  Each director has the right to seek independent professional advice at the Company’s expense. However,  prior approval of the Chairman is required, which will not  be unreasonably withheld. Principle 2 states that “companies should have a board  of an effective composition, size and commitment to  adequately discharge its responsibilities and duties.”  The Company’s board is so structured, and its directors  believe that they have adequately discharged their responsibilities and duties to the benefit of shareholders. The preferred skills and experiences for a director of the  Company include: In assessing whether a director is classified as independent, the board considers the independence  criteria set out in the ASX Corporate Governance Council  Recommendation 2.1 and other facts, information and  circumstances deemed by the board to be relevant. Using the ASX Best Practice Recommendations on  the assessment of the independence of directors, the  board considers that of a total of seven directors during  the financial year ended 30 June 2011, four were  considered to be independent (Mr Reg Gillard, Mr Neil  Fearis, Mr Sean Harvey and Mr Michael Bohm). Mr Mark  Calderwood is the managing director of the Company and  is not considered to be independent. Mr Colin Carson  and Mr Rhett Brans are employed in executive roles and  are not considered to be independent. The board has established a framework for the management of the consolidated entity including a  system of internal control, a business risk management  process, and the establishment of appropriate ethical  standards.  The full board holds regular meetings to discuss operational matters, plus strategy meetings and any  extraordinary meetings at such other times as may be  necessary to address any specific significant matters  that may arise. The board reviews its composition on an annual basis  to ensure that it has an appropriate mix of expertise  and experience. When a vacancy occurs, for whatever  reason, or where it is considered that the board would  benefit from the services of a new director with particular  skills, the board will select appropriate candidates with  relevant qualifications, skills and experience. External  advisers may be used to assist in such a process. The  board will then appoint the most suitable candidate who  must stand for election at the next general meeting of  shareholders. The terms and conditions of the appointment and  retirement of directors are not formally set out in a  letter of appointment. However matters such as remuneration, expectations, terms, the procedures for  dealing with conflicts of interest and the availability of  independent professional advice are clearly understood  by all directors, who are experienced public company  directors. The Chairman is responsible for leading the board,  ensuring directors are properly briefed in all matters  relevant to their role and responsibilities, facilitating board  discussions and managing the board’s relationship with  the Company’s senior executives. The board considers  that the Chairman, Mr Reg Gillard, is independent as  discussed in the above paragraph. The CEO is Mr Mark Calderwood, Managing Director,  who is responsible for implementing Company strategies  and policies. The board of directors of the Company does not have a  nomination committee. The board is of the opinion that  due to the nature and size of the Company, the functions  performed by a nomination committee can be adequately  handled by the full board. When a new director is to be appointed the board reviews  the range of skills, experience and expertise on the board,  identifies its needs and prepares a short-list of candidates  with appropriate skills and experience. Where necessary,  advice is sought from independent search consultants.  35 •  mineral resources; •  corporate and business development; and •  public company administration.