Telix Pharmaceuticals : FY21 Corporate Governance Statement - replacement

For personal useC O R P OonlyR A T E G O V E R N A N C E S T A T E M E N T 2 0 2 1

Corporate

Governance

Statement

Financial year ended 31 December 2021

T E L I X P H A R M A C E U T I C A L S

A listed entity should have and disclose a Board Charter setting out the respective roles and responsibilities of its Board and Management; and those matters expressly reserved to the Board and those delegated to Management.

Telix Pharmaceuticals Corporate Governance Statement 2021		1

Telix Pharmaceuticals Limited ("Telix" or "the Company") is an entity incorporated and domiciled in Australia. Telix is listed on the Australian Securities Exchange with the code TLX (ASX: TLX). Telix operates globally in a number of jurisdictions through wholly-owned subsidiaries. Subsidiaries of Telix have been established or acquired in order to optimally manage the Company's extensive intellectual property portfolio and to facilitate clinical, operational and commercial activities in the key territories in which the Company does business.

As at the date of this Corporate Governance Statement, the Board of Telix Pharmaceuticals Limited consists of six Directors. Three Directors
only
are considered by the Board to be independent, and three Directors are considered by the Board as non-independent:
H Kevin McCann AO	Independent, Non-Executive Chairman
Christian Behrenbruch PhD	Managing Director and Chief Executive Officer
Oliver Buck	Non-Independent,Non-Executive Director
A dreas Kluge MD PhD	Non-Independent,Non-Executive Director
Mark Nelson PhD	Independent, Non-Executive Director
Jann Skinner	Independent, Non-Executive Director

The Board uses the guidance provided by the ASX Corporate Governance Council as a focus for the development and continuous improvement of the Group's governance framework, policies and practices.

useThe Appendix 4G accompanying this Corporate Governance Statement details Telix's adherence to the ASX Corporate Governance Principles and Recommendations (4th Edition), covering the reporting period of the financial year ended 31 December 2021.

Principle 1: Lay solid foundations for personalmanagement and oversight

Telix has delineated the respective roles and responsibilities of its Board and Management and regularly reviews the performance of both.

1.1

The Board is responsible under its Charter for providing leadership, and setting the strategic objectives of the Company; monitoring Management's implementation and execution of the Company's strategy; developing and reviewing the Company's values and corporate governance policies in order to underpin the desired culture within the Company; appointing the Chairperson; selecting, appointing, removing and evaluating the Chief Executive Officer; approving the appointment and removal of the Chief Financial Officer and Company S cretary; approving the appointment of members of Key Management Personnel (KMP); setting the risk appetite; overseeing the risk management framework; approving financial reports and other reports required at law or under the ASX Listing Rules; ensuring that there are appropriate resources available to fulfil the responsibilities of the KMP; approving the delegation of authority framework; approving the Company's remuneration policies and practices in order to ensure they are aligned with the Company's purpose, values, strategic objectives and risk appetite; and approving measurable objectives for achieving diversity on an annual basis.

The Board has a charter which clearly sets out its roles and responsibilities and describes those matters expressly reserved for the Board's determination and those matters delegated to Management. The Board Charter sets out the role and responsibilities of the Chairperson.

ForThe Board has delegated the implementation of strategy and policy initiatives, including day-to-day management of the Company's affairs, to the Managing Director and Group Chief Executive Officer, who is supported in this function by the Company's other key management personnel - being the Group Chief Financial Officer and Group Chief Operating Officer - and other members of the executive leadership team. The executive leadership team, referred to internally as the Global Leadership Team or "GLT", comprise those executives responsible for providing the Board with accurate, timely and clear information on the entity's operations - including financial performance, research and commercial operations, compliance with material legal and regulatory requirements, and responding to any conduct that is materially inconsistent with the values or Code of Conduct of Telix - to enable the Board to perform its responsibilities. A detailed Delegated Authorities Policy of the Board sets out the decision-making powers which may be exercised at various levels of management.

In addition, the Board has delegated specific authority to three Board Committees - the Audit and Risk Committee; the People, Culture, Nomination and Remuneration Committee and the Disclosure Committee - each of which assist the Board in discharging its responsibilities.

A description of the Audit and Risk Committee and the People, Culture, Nomination and Remuneration Committee, their responsibilities and membership make-up is detailed in each Committee's Charter. A description of the responsibilities of the Disclosure Committee is detailed in the Company's Continuous Disclosure Policy. All documents are available at the Corporate Governance section of the Company's website.

A listed entity should have and disclose a process for periodically evaluating the performance of the Board, its Committees and individual Directors.

A listed entity should have and disclose a Diversity Policy; set measurable objectives for achieving gender diversity and disclose the measurable objectives set to achieve gender diversity.

The Company Secretary of a listed entity should be accountable directly to the Board, through the Chairperson on all matters to do with the proper functioning of the Board.

Telix Pharmaceuticals Corporate Governance Statement 2021		2

1.2 A listed entity should undertake appropriate checks before appointing a Director or senior executive or putting someone forward for election as a Director; and provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a Director.

Before a person is appointed as a Director or senior executive or put forward to Shareholders as a candidate for re-election as a Director, the Company undertakes appropriate checks in respect of that person, which include checks as to the person's character, experience and

only1.4
education. Telix provides its Shareholders with all material information (that is in its possession) relevant to a decision on whether or not to
elect or re-elect a Director (including any material adverse information revealed by the above or any other checks).
1.3	A listed entity should have written agreements with Directors and senior executives setting out the terms of their appointment.

Telix has entered into written agreements with each Director and senior executive setting out the terms of appointment, including respective roles and responsibilities. Agreements with Directors include the requirement to disclose interests and any matters which may affect the Director's independence. Agreements also specify the requirement to comply with key corporate policies, including the Code of Conduct, C ntinuous Disclosure and Securities Trading policies.

The Company Secretary is responsible for advising the Board and its Committees on governance matters, and for ensuring that Board and useCommittee procedures are complied with. The Company Secretary is accountable directly to the Board, through the Chairperson, on all matters to do with governance and the proper functioning of the Board. All Directors have access to the Company Secretary for advice and

services. The Board approves the appointment and removal of the Company Secretary.

1.5

The Board recognises that diversity is a fundamental consideration in developing and sustaining a workforce that is capable of achieving the strategic and business goals of Telix. Diversity refers to characteristics that make individuals different from each other and encompasses differences in backgrounds, qualifications and experience, and also differences in approach and viewpoints. It includes factors such as gender, age, race, disability, ethnicity, marital or family status, religious or cultural background, socio- economic background, sexual personalorientation, gender identity, sexual preference, language and other areas of potential difference. The Board is committed to providing an environment in which employees have equal access to opportunities available at work, are not judged by reference to unlawful or irrelevant

ttributes and have genuine feelings of belonging and inclusion across integrated workplace activities.

Telix has a Diversity and Inclusion Policy which outlines the Company's commitment to diversity and inclusion and the provision of a work e vironment that is free from discrimination and promotes equal opportunity for all. The policy includes the requirement for the Board to set measurable objectives for achieving gender diversity.

The Company will establish appropriate, measurable objectives for achieving gender and other forms of diversity and inclusion. Further, where, at the commencement of a financial year the Company is included in the ASX 300, the Company will seek to have not less than 30% of its Non-Executive Directors as female within a 12-month period. The Company was first included in the ASX 300 in 2021. The Board therefore has a target that not less than 30% of its Non-Executive Directors will be female during the course of 2022.

The Board sets key performance indicators for senior management to measure achievement against objectives to achieve gender and other fo ms of diversity and requires senior management to report against such objectives. The Board annually reviews, assesses and reports the Company's progress towards achieving those measurable objectives and the adequacy of the Company's programs and initiatives in that r gard.

Th re was no change to Board composition in the financial year under review, and the ratio of females to males on the Board (6 people) remained 17:83. The Board has a target that not less than 30% of its Non-Executive Directors will be female during the course of 2022. The number of females to males in the GLT (14 people) was 4:10, a movement towards equality (2020 1:8). The number of females to males across the Group (158 people) was 68:90 (2020 25:47) an improvement of 8% and a move towards equality. The Board set a target in 2021 that not less than 50% of new appointments, including to senior positions, would be female. Of 83 new appointments the number of females to males was 40:43. Remuneration outcomes between 2020 and 2021 indicated a 4% reduction in the gender pay gap. The gender pay gap and

Forassociated hiring and retention processes remain under review in 2022.

The Company's commitment to diversity is demonstrated by Directors and the leadership team through modelling the Code of Conduct in all aspects of the business, by ensuring managers tasked with recruiting or advancement understand the reasoning and spirit of the Diversity and Inclusion Policy, through training and development, by ensuring that the Group's recruitment process encourages selection from a diverse pool of candidates, and through the continued flexible approach to work conditions.

1.6

The Board performs a pivotal role in the governance framework of a listed entity. The Board of Telix promotes transparency and accountability and recognises that evaluation of performance is a key element of these goals. On an annual basis the Board will undertake a review of its performance and the performance of its Committees. This process was undertaken in the year ended 31 December 2021.

The effectiveness of the Board and its committees is assessed against the roles and responsibilities set out in the Board Charter and each committee charter. The review provides opportunity for Director self-review and feedback on the performance of individual Directors. The Board will consider periodically using external facilitators to conduct performance reviews.

Matters considered in the performance evaluation process include the conduct of Board and committee meetings (including the effectiveness

Telix Pharmaceuticals Corporate Governance Statement 2021		3

of discussion and debate); the effectiveness of Board and committee processes and relationship with management; a review of major decisions of the Board for effectiveness; and the composition of the Board and committees, focusing on the skills, experience, expertise and diversity of the Board necessary to enable it to oversee the delivery the Group's objectives and strategy. The Chairman also holds discussions with individual directors to facilitate peer review.

1.7 A listed entity should have and disclose a process for evaluating the performance of its senior executives.

onlyThe Board recognises that the performance Telix's senior executives will drive the performance of the entity. Telix has an annual performance

and development review process in place for all personnel, including the CEO and senior executive team. On an annual basis, corporate objectives and individual key performance indicators (KPIs) are set. The CEO reviews the performance of senior executives and their delivery of corporate and individual objectives and makes recommendations to the Board on performance and achievement outcomes.

Principle 2: Structure the board to be effective

and add value

useT lix has a Board of an appropriate size that collectively has the skills, commitment and knowledge of the entity and the industry in which it operates, to enable it to discharge its duties effectively and to add value.

2.1 People, Culture, Nomination and Remuneration Committee

The Board has established a People, Culture, Nomination and Remuneration Committee to assist the Board in fulfilling its duties and responsibilities by reviewing, advising and making recommendations to the Board on issues of nomination, remuneration, people and culture, and workplace health and safety.

The Committee considers items including Board renewal, the succession of Directors, the CEO and senior executives, Board induction, and the balance of skills, knowledge, experience, independence and diversity on the Board.

The Committee has four members: three independent, Non-Executive Directors: Mr Kevin McCann (Chairperson), Dr Mark Nelson and Ms Jann Skinner; and one non-independentNon-Executive Director, Mr Oliver Buck. The Committee Charter is available at the Corporate Governance section of the Company's website. The Committee Charter is reviewed at least annually. In the year ended 31 December 2021, the Charter was updated to expand the Committee's remit to include people, culture and workplace health and safety matters.

In the year ended 31 December 2021 the Committee met on four occasions. The meetings were attended by all Committee Members eligible to participate.

2.2 Board skills matrix

The Board considers that its membership comprises Directors with an appropriate mix of skills, experience and personal attributes that allow the Directors individually and the Board collectively to discharge their responsibilities and duties under the law effectively and efficiently. Di ectors understand the Telix business and the environment in which Telix operates so as to be able to both question Management

Skills, experience and expertise

	ASX listed company experience	Audit and assurance
personal
	Biotechnology and pharmaceutical sector	Commercial partnering, M&A
	Law and governance	Global regulatory experience
For	Scientific and medical research expertise
	Financial acumen
	Radiopharmaceuticals industry commercial experience	Capital markets

The following skills, experience and expertise have been identified by the Board as those which may add further value to the Board. These skills, experience and expertise will be considered in the Board nomination process and in the appointment of any new Directors:

• Global pharmaceutical sales and marketing
• Pharmaceutical manufacturing
• Global supply chain and distribution

	Telix Pharmaceuticals Corporate Governance Statement 2021				4
2.3	Independence and length of service of Directors
	Director		Length of service
	H Kevin McCann, AO BA LLB (Hons) (Sydney) LLM (Harvard) Life Fellow		Appointed Non-Executive Director and Chairman, 17 September 2017
	AICD
only				Appointed Executive Director, 3 January 2017
	Christian Behrenbruch, BEng (Hons) DPhil (Oxon) MBA JD FIEAust
	GAICD
	O iver Buck, Dipl Phys, Theoretical Biophysics (Technical University of		Appointed Non-Executive Director, 16 January 2017
	Munich)
	A dreas Kluge, MD PhD (Berlin)		Appointed Executive Director, 3 January 2017 Transitioned To Non-
					Executive Director, 1 June 2020
	Mark Nelson, BSc (Hons) (Melb), MPhil (Cantab) PhD (Melb)		Appointed Non-Executive Director, 17 September 2017
	Jann Skinner BCom (UNSW) FCA FAICD		Appointed Non-Executive Director, 19 June 2018

The Board has referred to the Board Charter and the guidance provided by the ASX Corporate Governance Council and has considered the ind pendence of each Director in this context. At the date of this Corporate Governance Statement it is the Board's opinion:

• that Mssrs McCann and Nelson and Ms Skinner are considered Independent Directors;

• that due to his executive role and substantial shareholding, Dr Behrenbruch is not considered an Independent Director;

• that due to his substantial shareholding, Dr Kluge is not considered an Independent Director;

• that, in the context that Mr Buck is a member of the Supervisory Board of ITM Isotope Technologies Munich SE (ITM) AG, a leading supplier of
usediagnostic and therapeutic isotopes for nuclear medicine with which Telix has a global supply agreement, Mr Buck is not considered an
Independent Director.
personalbe the same person as the CEO. The Board recognises that having an independent Chairperson can contribute to a culture of openness
2.4	Independence of the Board

The Board has referred to the guidance provided by the ASX Corporate Governance Council and acknowledges the recommendation that a

m jority of the Board of a listed entity should be independent Directors. As at the date of this statement, the Board consists of five Non- Executive Directors, three of whom are independent and one who is non-independent; and one Executive Director. Of the six Directors on the Board, the three non-independent Directors bring skills to the Board that are specific to the radiopharmaceuticals industry and

co sidered by the Board to be essential for success in the Company's objectives. The three independent Directors are experienced Directors of ASX-listed companies. In these circumstances the Board considers that the balance of Directors is appropriate in the circumstances of the C mpany at this time and given the existing size of the Board.

The Directors of Telix are required to keep the Board advised of any interest that may be in conflict with those of the Group, and restrictions are applied to Directors' rights to participate in discussion and to vote when a conflict has been identified. In particular, where a potential conflict of interest may exist, Directors concerned may be required to leave the Board meeting while the matter is considered in their ab ence.

The Board continues to keep the balance of diversity, skills and experience of its members, as well as their independence, under review.

2.5 Independence of the Chair

H Kevin McCann was appointed as an independent, Non-Executive Chairman on 17 September 2017.

The Board of Telix acknowledges that the Chairperson of the Board of a listed entity should be an independent Director and should not

and constructive challenge that allows for a diversity of views to be considered by the Board. The Board further recognises that good

governance demands that an appropriate separation exist between those charged with managing a listed entity and those responsible for
For
ove seeing its managers.
2.6	Program for induction and training of Directors

It is the policy of the Board that, both before accepting appointment and continuously thereafter, Directors are provided with information about the Company and its operations appropriate for them to discharge their responsibilities. To help Directors maintain their understanding of the business, Directors have access to the members of the management team and also to employees at all levels. Directors have access to continuing education in relation to the Telix business and industry, and other information required by them to discharge their responsibilities. With approval from the Chairperson, which will not be unreasonably withheld or delayed, each Director may seek independent legal or other professional advice at the Company's expense. The need for any existing director to undertake professional development to maintain the skills and knowledge needed to perform their role as director effectively is considered during the annual performance evaluation.