NOVONIX Ltd — Governance Information 2021

Aug 25, 2021

==> picture [215 x 49] intentionally omitted <==

2021 Corporate Governance Statement

We are committed to achieving best practice across the Group in all that we do, which we believe is fundamental to the long-term performance and sustainability of the Group and the delivery of our strategic objectives.

NOVONIX Limited (the ‘Company’) and its associated entities (the ‘Group’); believe corporate governance is central to its business objectives and a critical element contributing to the preservation of shareholder value.

The Board has adopted a suite of charters and key corporate governance documents which define the policies and procedures followed by the Group. These documents can be found in the Governance section of the Group’s website and are reviewed regularly to address changes in governance practices and the law.

The Group’s Corporate Governance Statement references the ASX Corporate Governance Council Corporate Governance Principles and Recommendations (4th Edition) (the “Principles”). The Principles are outlined on the following pages, with the corresponding section of this Corporate Governance Statement addressing the Group’s practices.

This statement provides an outline of the main corporate governance policies and practices the Group had in place during FY21 and how the Group’s framework aligns with the Principles (unless otherwise noted).

This statement has been approved by the Board of Directors of the Group and the information contained herein is correct as of 26 August 2021.

You can find further information on the structure of our business, our board and management team along with our policies and practices on our website.

Website Links:

Company information

www.novonixgroup.com/about-novonix

Corporate governance

www.novonixgroup.com/governance

Recommendations Compliance with recommendations

Principle 1 – Lay solid foundations for management and oversight

• 1.1 Role of Board The Board has established a clear distinction between the functions and and responsibilities reserved for the Board and those delegated to management, which management are set out in the Group’s Corporate Governance Charter (Charter). The Charter also provides an overview of the roles of the Chairman, Directors and Executives.



A copy of the Charter is available in the Governance section of the Group’s website.

• 1.2 Information The Group carefully considers the character, experience, education and skill set as  regarding well as interests and associations of potential candidates for appointment to the election or re- Board. Appropriate checks are conducted with assistance from the Remuneration election of and Nomination Committees to verify the suitability of the candidate prior to their Director election. candidates Comprehensive biographical information is provided to shareholders in the notice of meetings of shareholders to enable them to make an informed decision on whether to elect or re-elect a Director.

The Group has appropriate procedures in place to ensure material information relevant to a decision to elect or re-elect a Director is disclosed in the Notice of Meeting provided to shareholders.

Page 1 of 9

Compliance with recommendations





Recommendations

Principle 1 – Lay solid foundations for management and oversight (continued)

1.3 Written In addition to being set out in the Charter, all directors and senior executives have a contracts of written agreement which formalises the terms of their appointment. Each Director appointment commits to a letter of appointment which specifies the term of their appointment, the envisaged time commitment, expectations and duties relating to the position, remuneration, disclosure and confidentiality obligations, insurance and indemnity entitlements, details of the Group’s corporate governance policies, and reporting lines.

Each Senior Executive enters into an employment contract which sets out the material terms of employment, including a description of position and duties, reporting lines, remuneration arrangements and termination rights and entitlements. Contract details of senior executives who are Key Management Personnel are set out in the 2021 Annual Report to shareholders.

1.4 Company The Group has a board-appointed company secretary. You can view their Secretary biographical details and qualifications in the Annual Report.

The group company secretary has overall responsibility for the group secretariat function and is directly accountable to the board, through the chairman, on all matters to do with the proper functioning of the board. This includes advising the board and its committees on governance matters, coordinating board business and providing a point of reference for dealings between the board and management.

All directors have access to the advice and services of the company secretary.

1.5 Diversity and The Group’s Diversity Policy is disclosed on the Group’s website and sets out its inclusion objectives and reporting practices regarding diversity.



The Board continues to review and monitor the Group’s diversity profile with a view to setting meaningful targets for the advancement of diversity within the Group.

Gender diversity statistics as at 30 June 2021 are outlined in the table below.

Item	Men	Women
Number of total employees	65	16
Percentage of total employees	80%	20%
Number of total senior executives*	2	1
Percentage of senior executives	67%	23%
Number of total Board members	6	-
Percentage of Board members	100%	0%

*For the purpose of determining the above statistics, the Group considers “Senior

Executives” to be those individuals included as Key Management Personnel in the 2021 Annual Report.

Page 2 of 9

Recommendations Compliance with recommendations

Principle 1 – Lay solid foundations for management and oversight (continued)

1.5	Diversity and	FY2021 Measure
	inclusion
	(continued)	Targets Objective Progress
		Eliminate discrimination in the Ensure equal opportunity Achieved
		workplace. training is offered. noting the
		context of a
		small
		company with
		few
		employees
		Support diversity, including Ensuring recruitment and Achieved
		gender diversity into leadership development programs aim for noting the
		positions. 50% female participation. context of a
		small
		company with
		few
		employees
1.6	Board reviews	The Board undertakes an evaluation process each year to assess its performance.	
		The assessment is conducted by an independent external consultant who seeks
		Board and Management feedback on the performance of the Board and Committees
		as a whole, as well as feedback on individual directors and the Group’s reporting and
		governance practices. The most recent evaluation was completed in August 2021
1.7	Management	The Chair of the Board is responsible for evaluating the performance of the Executive	
	reviews	Directors. At least annually, the Board formally evaluates the performance of the
		Executive Directors against their previously approved KPIs. These reviews are
		documented. Performance reviews have been undertaken for the current reporting
		period.
incip	le 2 – Structure the	board to add value
2.1	Nominations	The Board has not established a Nomination Committee. The roles and	
	committee	responsibilities are set out in the Group’s Nominations Charter and these are
		currently overseen by the full Board
2.2	Board skills	The skills, knowledge and experience set out in the table below have been identified	
	matrix	as those that are required for the effective management of the Group. The Board
		possesses broad coverage of these skills and attributes. Further details regarding
		the skills and experience of each Director are included in the 2021 Annual Report.

Principle 2 – Structure the board to add value

Skills Matrix

The skills were determined by what is considered important for the management of a publicly listed company and specific to the industry in which the Group operates.

Page 3 of 9

Recommendations Compliance with recommendations



Principle 2 – Structure the board to add value

• 2.2 Board skills matrix (continued)

The following table sets out the experience and skills deemed necessary or desirable by the Board, in the Group’s Directors and whether they are represented on the Board.

Competency	Representation of skills held by directors
Strategy Track record of developing and implementing a successful strategy (strategydevelopment & strategyexecution).	6 Directors
Going Global Senior executive or equivalent to enter into global markets/jurisdictions.	4 Directors
Battery Materials and Testing Knowledge Experience in the development of battery materials and batterytestingservices.	2 Directors
Financial Acumen Senior executive or equivalent experience in financial accounting and reporting, corporate finance, risk management, and internal financial controls, including an abilitytoprobe the adequacies of financial and risk controls.	6 Directors
Corporate Governance Strong corporate governance experience with an understandingof publiclylisted companyobligations.	6 Directors
Capital Markets and/or Mergers and Acquisitions Experience in capital markets and/or experience in identifying, implementing or executing mergers and acquisitions.	5 Directors
External Communications Experience in using external communications to influence other business leaders, industry peak bodies, government, and financial market and investor stakeholders.	6 Directors
Executive Management Experience in evaluating performance of senior management and oversee strategic human capital planning. Experience in organisational change and management programs.	5 Directors

Page 4 of 9

Recommendations Compliance with recommendations



Principle 2 – Structure the board to add value (continued)

• 2.3 Disclose independence and length of service

The Group currently has a six-member Board, of whom three are independent Non executive Directors. Together, the Directors have a broad range of experience, expertise, skills, qualifications and contacts relevant to the Group and its business.

Details of their individual skills and experience are set out in the 2021 Annual Report and on the Group’s website.

Board composition

Board	Audit & Risk Committee	Remuneration Committee
Anthony Bellas
(Appointed 11 August 2015)	M	M
Independent Non-executive Chairman
Greg Baynton
(Appointed 5 April 2012)	M	A
Non-Executive Director
Robert Cooper
(Appointed 31 October 2016)	C	C
Independent Non-executive Director
Robert Natter	A	A
(Appointed 14 July 2017)
Executive Director
Andrew Liveris
(Appointed 1 July 2018)	A	M
Independent Non-executive Director
Trevor St Baker
(Appointed 24 September 2020)	A	A
Non-executive Director

C – Chairman, M – Member, A – Attendee

• 2.4 Majority of Directors independent

In accordance with the Board Charter which is contained within the Charter and available on the Group’s website, a Director is considered independent if the Director is independent of management and free of any business or other relationship that could materially interfere, or be perceived as interfering, with the exercise of an unfettered and independent judgment in relation to matters concerning the Group.

Three of the six Board members are considered to be independent – Anthony Bellas, Robert Cooper and Andrew Liveris. Robert Natter is an executive director and therefore not considered independent. Trevor St Baker and Greg Baynton are substantial shareholders and therefore not considered independent. Greg Baynton was an executive director until 24 September 2020.

The composition of the Board of Directors will be reviewed as part of the proposed NASDAQ listing and independence requirements will be further considered at this time.

The decision as to whether a Director is independent is a decision made by the Board.

The Chairman, Anthony Bellas, is an independent non-executive Director.



Further details regarding the Chairman are set out in the 2021 Annual Report and also available on the Group’s website.

2.5 Chair independent

Page 5 of 9

Recommendations Compliance with recommendations

Principle 2 – Structure the board to add value (continued)

 2.6 Induction and An induction process including appointment letters and ongoing education exists to professional promote early, active and relevant involvement of new members of the Board. development Directors are encouraged to undertake continuing professional development activities each year and to join appropriate professional associations in order to continually develop and enhance their respective levels of industry knowledge, technical knowledge and other skills required to discharge their role effectively. Principle 3 – Act ethically and responsibly 3.1 Values The Company is committed to conducting all of its business activities fairly, honestly  with a high level of integrity, and in compliance with all applicable laws, rules and regulations. The Board, management and employees are dedicated to high ethical standards and recognise and support the Company’s commitment to compliance with these standards. The Company’s values are set out in its Statement of Values, a copy of which is available on the Company’s website. 3.2 Code of The Group has a Code of Conduct for Directors, senior executives, employees,  conduct consultants and contractors, which set out the fundamental principles of business conduct expected by the Group. The Code of Conduct, as it relates to Directors, is contained within the Charter and available on the Group’s website. 3.3 Whistleblower The Board has adopted a Whistleblower policy to ensure concerns regarding  policy unacceptable conduct including breaches of the Company’s code of conduct can be raised on a confidential basis, without fear of reprisal, dismissal or discriminatory treatment. The purpose of this policy is to promote responsible whistleblowing about issues where the interests of others, including the public, or of the organisation itself are at risk. Under the Company’s Whistleblower Policy, any material breaches are to be reported to the Chairman and/or the Company Secretary of the Board. A copy of the Whistleblower Policy is available on the Company’s website. 

• 3.4 Anti-bribery and The Company has a zero-tolerance approach to bribery and corruption and is corruption committed to acting professionally, fairly and with integrity in all business dealings. policy The Board is in the process of adopting an anti-bribery and anti-corruption policy for the purpose of setting out the responsibilities in observing and upholding the Company’s position on bribery and corruption, reinforce the Company’s values and to provide information and guidance to those working for the Company on how to recognise and deal with bribery and corruption issues.

Principle 4 – Safeguard integrity in corporate reporting

• 4.1 Audit The Group has established an Audit and Risk Committee which is comprised of three committee Non-executive Directors (two independent) and is chaired by Independent Nonexecutive Director Robert Cooper. Further details about the membership of the Audit Committee, including the names and qualifications of its members, are detailed in the Annual Report.



The Audit Committee Charter is contained within the Charter and available on the Group’s website, along with information on its members. The number of meetings held by the Committee and the Directors’ attendance at meetings is disclosed each year in the Group’s Annual Report.

Page 6 of 9

• Recommendations Compliance with recommendations 4.2 CEO and CFO The Chief Executive Officer and Chief Financial Officer provide a statement to the  certification of Board and Audit Committee in advance of seeking approval of any financial report to financial the effect that the Group’s risk management and internal compliance and control statements systems are operating efficiently and effectively in all material respects. In accordance with the above, the Board has received a written assurance that the declaration provided under section 295A Corporations Act is based on a sound system of internal control and risk management, which is operating effectively in all respects in relation to material business risks and financial reporting.

• 4.3 Integrity of When preparing reports for release to the market including the quarterly activity and  financial reports cash flow reports these reports shall be prepared by management and reviewed by the Board. Such reports shall not be released to the market without this review and approval process.

• Principle 5 – Make timely and balanced disclosure 5.1 Disclosure The Group has adopted a Continuous Disclosure Policy which sets out the processes  policy and practices to ensure compliance with the continuous disclosure requirements under the ASX Listing Rules and the Corporations Act. A copy of the policy and guidelines are available on the Group’s website.

• 5.2 Material market Under the Company’s Continuous Disclosure Policy, all members of the Board will  announcements receive material market announcements prior to being released.

• 5.3 Investor Under the Company’s Continuous Disclosure Policy, all substantive investor or  presentations analyst presentations will be released on the ASX Market Announcements Platform ahead of such presentations.

• Principle 6 – Respect the rights of security holders 6.1 Publicly The Group’s website contains extensive information on the Group, its history and  available business activities and information relevant to investors as set out in the guidelines. information accessible on Investors may access copies of ASX announcements, notices of meeting, investor website presentations and annual reports, as well as general information about the Group, on the Group’s website. 

• 6.2 Investor Through its shareholder communications, the Group aims to provide information that relations will enable existing and potential shareholders and financial analysts to make programs informed decisions about the Group’s value.

The Group conducts regular market briefings including interim and full year results presentations, investor roadshows, and also attends industry conferences in order to facilitate communication with investors and other stakeholders. All presentation material is provided to the ASX prior to these events and subsequently uploaded to The Group’s website to ensure that all shareholders have timely access to information. The Group’s website also provides important information regarding compliance and corporate governance. The Group aims to ensure that all shareholders are well informed about major developments affecting the Group through its ongoing commitment to continuous disclosure obligations.

Page 7 of 9

• Recommendations Compliance with recommendations Principle 6 – Respect the rights of security holders (continued) 6.3 Facilitate Shareholders are encouraged to attend the Group’s Annual General Meeting and to  participation at ask questions of Directors. The notice of meeting includes a process to enable meetings of shareholders to submit questions to the Board and the Group’s auditor prior to the security holders meeting.

• 6.4 Resolutions by All resolutions of security holder meetings will be decided by poll rather than a show  poll of hands.

• 6.5 Facilitate The Group provides its investors the option to receive communications from, and  electronic send communications to, the Group and the share registry electronically. communication

• Principle 7 - Recognise and manage risk 7.1 Risk committee The Group established an Audit and Risk Committee which is comprised of three  Non-executive Directors (two independent) and is chaired by Independent Nonexecutive Director Robert Cooper. Further details about the membership of the Audit Committee, including the names and qualifications of its members, are detailed in the Annual Report.

• 7.2 Annual risk The Board is responsible for the oversight and management of risk, including the  review identification of material business risks on an ongoing basis. A review of material business risks has been conducted in the current period, which concluded that controls over risk management processes were adequate and effective.

• 7.3 Internal audit The Group does not have a formal internal audit function. To ensure compliance with  the Group’s published policies and procedures and its legal and regulatory obligations, the Group continually reviews and refines processes and policies to enhance the effectiveness of the Group’s internal controls. Any identified control and process issues are formally reported to the Audit Committee and formalised action plans are put in place to address the issues.

• 7.4 Environmental The Directors advise that the Group has no material exposure to environmental or  and social risks social sustainability risks.

• Principle 8 - Remunerate fairly and responsibly 8.1 Remuneration The Board has established a separate Remuneration Committee, comprising three  committee directors, all of whom are independent non-executive directors, and is chaired by Robert Cooper.

The Charter governing the conduct of the Remuneration Committee is available on the Group’s website.

Details of membership of the Remuneration Committee, including the names and qualifications of Committee members, are set out in the 2021 Annual Report.

The number of meetings held and attended by each member of the Remuneration Committee during the financial year are detailed in the 2021 Annual Report.

Page 8 of 9

Recommendations Compliance with recommendations

Principle 8 - Remunerate fairly and responsibly (continued)

8.2 Disclosure of The Group seeks to attract and retain high performing Directors and Executives with Executive and appropriate skills, qualifications and experience to add value to the Group and fulfil Non-Executive the roles and responsibilities required. Further details of the Group’s remuneration Director methodologies are set out in the 2021 Annual Report. remuneration policy Executive remuneration is to reflect performance and accordingly, remuneration is structured with a fixed component and performance-based component. NonExecutive Directors are paid fixed fees for their services in accordance with the Group’s Constitution. Fees paid to non-executive directors are set out in the Remuneration Report within the 2021 Annual Report. Other than statutory superannuation, no other retirement benefits schemes are in place with respect to Non-Executive Directors.



The Group provides long term incentives to executives through its Employee Share Option Plan. The Plan is designed to focus executives on delivering long-term shareholder returns. Under the Plan, participants will be able to exercise their options subject to market vesting conditions being satisfied.

Participation in the Plans is at the Board’s absolute discretion and no individual has a contractual right to participate in the Plans.

Further details regarding remuneration and share retention policies and the remuneration of Executive and Non-Executive Directors, are set in the 2021 Annual Report and detailed in the Securities Trading Policy available from the Group’s website.

8.3 Policy on Details of the Group’s Employee Share Option Plan are set out in the Remuneration hedging equity Report which can be found in the 2021 Annual Report. incentive schemes The Group’s Employee Share Option Plan prohibits transactions which conflict with the Group’s Securities Trading Policy (which prohibits Directors and executives from entering into margin lending arrangements or short-term dealings in relation to company securities). A copy of the Securities Trading Policy is available on the Group’s website.



Page 9 of 9