Eagers Automotive : Corporate Governance Statement for 2021

CORPORATE GOVERNANCE STATEMENT

This statement summarises our key corporate governance practices. It is current as at 23 February 2022 and has been approved by the board. We followed all recommendations of the ASX Corporate Governance Council

useWe have a dynamic board which has developed and implemented policies and practices, over many years, designed to promote a culture of good corporate governance.

The board's role and responsibilities are detailed in our board charter, which is available on our Corporate Governance webpage located at http://www.eagersautomotive.com.au/shareholders/corporate-governance/.

The board has primary responsibility to shareholders for the welfare of the Company by guiding and monitoring its business and affairs. The board must at all times act honestly, fairly and diligently in accordance with applicable laws and policies. Each Director must act in the best interests of the Company as a whole.

Under the charter, the board's key responsibilities include to:

Agreements with Directors and Senior Executives

A letter of appointment sets out the terms of appointment for each non-executive Director appointed since 2007. It was not standard practice to issue letters of appointment for Directors prior to 2007. A written employment agreement is also in place with the Chief Executive Officer and other senior executives setting out their employment terms. This ensures a clear understanding of their respective roles and responsibilities and of the Company's expectations.

Board Evaluation

Under the board charter, the Chairman is responsible for ensuring that board meetings are conducted competently and ethically and that Directors individually and as a group have opportunities to air differences, explore ideas and generate the collective views and wisdom necessary for the proper operation of the board and Company. In this context, the Chairman undertakes a continuous review of the performance and contribution of individual Directors, whilst the board, as a whole, conducts an ongoing self-assessment of its collective performance and assessment of its committees and of the Chairman. This process was followed during the year under review and has assisted the board to operate efficiently and effectively over many years.

onlyExecutive Evaluation

The board is responsible for approving the remuneration arrangements for the Chief Executive Officer and other executive key management personnel, based on recommendations of the Remuneration & Nomination Committee. The Remuneration & Nomination Committee reviews and makes recommendations to the board regarding remuneration arrangements for the executives. These reviews take place at least annually, taking into account relevant market conditions. The Chief Executive Officer, in consultation with the Chair of the Remuneration & Nomination Committee, reviews the performance of the other executives on an ongoing basis and ensures the appropriateness of their reward framework. This process was followed during the reporting period.

useCompany Secretary

The Company Secretary is accountable to the board, through the Chairman, on all matters to do with the proper functioning of the board. Each director is able to communicate directly with the Company Secretary and vice versa.

Diversity

We recognise the inherent benefits in having a diverse workforce and value the differences between people and the contribution these differences can make to our business. To encourage and foster the move towards a more diverse personalwork force is not only the right thing to do, it also makes good business sense. It provides opportunity to attract and retain the most talented and engaged people whose diversity reflects the communities in which we operate. We believe

this helps to encourage greater innovation within our business.

In order to achieve optimum diversity in our workforce, it is essential that recruitment, selection, training, promotion and career management decisions are based on merit and are non-discriminatory. Our managers are charged with responsibility for ensuring employees are treated fairly and with respect and dignity.

Within our policy of appointing or promoting the best person for the job on a non-discriminatory basis, we endorse the objectives of equal opportunity so that all candidates are given equal consideration.

These principles are reflected in our Diversity Policy which is available on our Corporate Governance webpage.

In accordance with our diversity policy, the board has set the following measurable objectives for achieving diversity in the composition of our board, senior executives and workforce generally, and these are assessed annually:

• Board Composition - The measurable objective for achieving gender diversity in the composition of the board is to have not less than 30% of Directors of each gender within four years to February 2025. Since setting this objective, the proportion of our Directors who are women has risen to 22.2%.

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• Cultural Diversity Recognition - To better understand the diverse demographic of our workforce and ensure that it is representative of our customers, our objective is to better understand the cultural heritage and diversity of our employees. We aim to achieve this through our annual employee engagement survey, with the survey results utilised to recognise the cultural diversity of our workforce and to develop appropriate programs to address any relevant issues. As referred to above, the annual survey is scheduled for completion in first half of 2022.

Our board consists of nine Directors, including eight non-executive Directors. The Chief Financial Officer, Ms Sophie Moore, is the only executive Director.

A majority of the board (ie. five Directors) are regarded as being independent - Mr Crommelin (Chairman), Mr Cowper, Mr Birrell, Mr Duncan and Mr Blackhall. The board believes them to be free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect their capacity to bring Foran independent judgement to bear on issues before the board and act in the best interests of the Company and its

shareholders generally.

Mr Crommelin is Chairman of Morgans Holdings (Australia) Limited and brings extensive knowledge and expertise to our board in areas such as corporate finance, risk management and acquisitions. Our board considers that the relationship between the Company and Morgans is not material to Mr Crommelin's independence and that his role with Morgans does not interfere with his capacity to bring independent judgement to bear on issues affecting the Company. On average, we have paid $250,000 per annum to Morgans for corporate advisory services during the last four years.

Mr Cowper brings a wealth of industry knowledge to the board, having previously specialised in providing audit, financial and taxation services to companies in the motor industry, chaired the motor industry specialisation unit of Horwath Chartered Accountants for six years and been the Company's lead audit partner for seven years while at Horwath and Deloitte Touche Tohmatsu until 2008.

• professional skills (including accounting, audit, finance, risk management and regulatory compliance).
• interpersonal qualities (including integrity, standing in the market, ability to identify and communicate ideas and issues, and the degree to which one's skill set complements the skill sets of other board members).
• diversity including geographic diversity (including the main regions in which we operate).
• independence.

onlyImportantly, these qualities enable us to pursue the pillars of our corporate strategy (ie. business optimisation, growth by selective acquisition and development of proprietary brands via innovation and complementary services).

To complement the Skills Matrix, Directors are also entitled to obtain independent professional advice to assist in the proper discharge of their duties, at the Company's expense with the Chairman's prior approval.

Inductions and Professional Development

New Directors are offered an induction program aimed at broadening their understanding of the Company, as appropriate, including site visits and meeting key management. This allows them to participate fully and effectively

usein board decision-making at the earliest opportunity.

Directors are also given professional development opportunities to maintain and develop the skills and knowledge needed to perform their roles effectively, and site visits are available to maintain familiarity with our operating environment.

Principle 3 Instil a culture of acting lawfully, ethically and responsibly

As a company, we have adopted the following values, which express the standards and behaviours we expect of all our team members. They guide our interactions with all stakeholders and provide a platform for bringing together our teams under one banner. They are intended to create a link between our purpose and our strategic goals.