St Barbara Mines Limited Annual Report 2004 Corporate Governance Corporate governance is the system by which companies are directed  and managed. It in fl  uences how the objectives of the Company are  set and achieved, how risk is monitored and assessed, and how  performance is optimised. Good corporate governance structures  encourage companies to create value (through entrepreneurism,  innovation, development and exploration) and provide accountability  and control systems commensurate with the risks involved. Good corporate governance will evolve with the changing  circumstances of a company and must be tailored to meet  these circumstances. The Company’s Board and management are committed  to a high standard of corporate governance practices,  ensuring that the Company complies with the Corporations  Act 2001, Australian Stock Exchange Listing Rules,  Company Constitution and other applicable laws and  regulations. However, at this stage of the Company’s  corporate development, implementation of the ASX  Corporate Governance Council ten core principles, whilst  supported, is not practical in every detail given the modest  size and simplicity of the business. The core principles are noted as follows: The core principles are establishment of the role of the  Board, its composition (with a balance of skills, experience  and independence appropriate to the nature and extent  of operations), and the need for integrity (among those  who in fl  uence strategy and  fi  nancial performance, together  with responsible and ethical decision-making). Presenting  the Company’s  fi  nancial and non- fi  nancial position requires  processes that safeguard, both internally and externally,  the integrity of company reporting and its provision in  a timely and balanced manner. The rights of Company  shareholders must be recognised and upheld. Risk must  be managed through effective oversight and internal  control. Board and management effectiveness must be  encouraged. Remuneration must attract and maintain  talented and motivated directors and employees with a  clear relationship to corporate and individual performance.  And  fi  nally, the legitimate interests of all stakeholders must  be recognised. The details of the current and evolving corporate  governance practices are described. Board of Directors Role of the Board The Board has the responsibility of protecting the rights  and interests of shareholders and enhancement of long-term shareholder value.  To ful fi  l this role, the Board is responsible for: •  the corporate governance of the Company; •  the overall strategic direction and leadership  of the Company; •  approving and monitoring management implementation of objectives and strategies; and •  reviewing the performance against stated objectives by receiving regular management reports on the business situation, opportunities and risks. Structure of the Board At the date of this report the Company has a four member  Board three of whom are independent non-executive  directors, including the Chairman. Board members should possess complementary business  disciplines and experience aligned with the Company  objectives. The experience of directors is noted in the  Directors’ Report. The Board recently determined to temporarily suspend  the functions of its Audit Committee and Remuneration  Committee in favour of the full Board performing these  functions.  The Company will give consideration at an appropriate  juncture in the Company’s development, for the creation  of a Nomination Committee. None of the directors has a trading relationship with  the Company or a con fl  ict of interest in any business or  relationship which could, or could reasonably be perceived  to, materially interfere with the director’s ability to act in  the best interests of the Company, noting that Mr Tuten is  the representative of major shareholder RCF Management  L.L.C. Audit Processes and Policies The Board is responsible for the establishment  and maintenance of a framework of internal control  and policies and procedures designed to safeguard company  assets and to maintain the integrity of fi  nancial reporting.  These responsibilities include:- •  reviewing and approving the annual  fi  nancial reports, the half yearly  fi  nancial report and all other  fi  nancial information distributed externally;