BOARD & MANAGEMENT PERFORMANCE

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the Company are achieved, how risk is monitored and assessed, and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Brainytoys Limited’s Policy

Directors: The Chairman reviews the performance of all Directors each year. Directors whose performance is unsatisfactory are counselled and encouraged to improve their performance. If the Chairman believes their performance has not adequately improved, they are asked to retire. The Board does not measure itself against measurable and qualitative indicators, as it believes shareholders will ultimately decide if the Board’s performance has been satisfactory.

Management: All employees have a performance review undertaken each year. In addition to their performance against previously agreed goals, their performance is also measured against the following indicators:

	Safety;
	Trade skill and competence;
	Work ethic;
	Integrity and Loyalty

Independent Professional Advice

Each Director has the right to seek independent professional advice at the Company’s expense. However, prior approval of the Chairman is required, which is not unreasonably withheld.

Continuing Professional Development

The Company encourages all employees to further develop their trade and professional skills. Employees who successfully complete an approved course of study are reimbursed by the Company for any expenses they incur in completing the course.