In its commitment to principles of sound corporate governance, the Aspen Board endorses the Code of Corporate Practices and Conduct (“the Code”) as set out in the King II Report (“King II”). Compliance with the Code is actively monitored to ensure ongoing improvement of operational and corporate practices. This framework of corporate governance is implemented across the Group’s South African and international operations. Aspen strives to uphold high standards of business ethics and integrity throughout the Group.

The Group aims to achieve new advancements in corporate governance each year. Key developments during the year under review included:

• Clear definition of the Lead Independent Non-executive director in the Group’s Board Charter;
• Extension of legal compliance management processes to include the new subsidiaries;
• Compliance by unlisted entities in the Group with all corporate governance requirements for listed companies; and
• Appointment in Brazil of a dedicated person who is specifically tasked to drive enhancements to the overall internal controls environment.

In anticipation of the introduction of the King III Report (“King III”) in 2010, Aspen has analysed key aspects of the draft report and has submitted its response on issues which the Group believes requires further clarity and consideration. Aspen has taken cognisance of King III’s reiterated focus on the effectiveness of internal controls and the new initiatives towards sustainability reporting and is committed to compliance with these aspects of the report.

THE BOARD

Structure

The Group’s unitary Board of Directors comprises eight nonexecutive directors, five of whom are independent. Nonexecutive director, Judy Dlamini chairs the Board. During the year, Roy Andersen was appointed as Lead Independent Director.

In accordance with the amended requirements as proposed in King III, an assessment was made for each independent director to determine whether the existence of any business or other relationships interfered materially with the individual’s capacity to act in an independent manner. The Board is satisfied that the classification of the Group’s independent non-executive directors is appropriate.

Attendance at Board and sub-committee meetings for the year is set out below:

In accordance with the series of strategic transactions concluded with GSK in May 2009, GSK will be given the right to nominate a representative to the Aspen Board of Directors as a result of obtaining a shareholding of 16% of the Group on completion of the transactions.

The name of and a brief curriculum vitae for each director is set out here.

Six Board meetings were held during the year including one special meeting and one strategic meeting. Directors are comprehensively briefed, well in advance of the scheduled Board meetings, with relevant information to enable them to fulfil their responsibilities effectively.

Pasco Dyani (alternate, Derek Thomas) attended the first Board and Transformation Committee meetings of the financial year, prior to his resignation on 26 February 2009.

During the year under review, John Buchanan served as interim Chairman of the Remuneration & Nomination Committee which will, in future, be chaired by Lead Independent Non-executive Director, Roy Andersen.

In line with Aspen’s Articles of Association, Archie Aaron, Chris Mortimer, David Nurek and Sindi Zilwa will retire by rotation at the upcoming annual general meeting and, being eligible, offer themselves for re-election. The Board has evaluated the performance of these directors and has recommended their reappointment. The Board Charter provides for automatic retirement of a director at the age of 70. However, at the Board's discretion, the retiree can be invited to serve as non-executive director on a year-on-year basis. The Board has approved the reappointment of Archie Aaron in terms of this proviso.

The roles of the non-executive Chairman, Group Chief Executive and Lead Independent Non-executive Director are strictly separated. The Chairman provides leadership and guidance to the Board and encourages proper deliberation on all matters requiring the Board’s attention with input from other directors. The Group Chief Executive and Deputy Group Chief Executive are responsible for implementing strategy and operational decisions in respect of the day-to-day operations of the Group. The Lead Independent Non-executive Director assumes the responsibilities of the Chairman in circumstances where the Chairman has a conflict of interest, when the Chairman’s performance is being appraised or when the Chairman’s term of office is being considered.

Non-executive directors contribute their independent and objective knowledge, extensive experience and diverse expertise towards Board deliberations. They have unrestricted access to management at all times. All directors are also entitled to seek independent, professional advice on any matters pertaining to the Group where they deem this to be necessary.

Composition of the Aspen Board of Directors and the sub-Committees are reflected below:

Board of Directors Judy Dlamini (Chairman), Archie Aaron, Roy Andersen, Gus Attridge, Rafique Bagus,John Buchanan, Chris Mortimer, David Nurek, Stephen Saad, Sindi Zilwa

Audit & Risk Committee John Buchanan (Chairman), Roy Andersen, Chris Mortimer, Sindi Zilwa   Remuneration & Nomination Committee Roy Andersen (Chairman), John Buchanan, Judy Dlamini   Transformation Committee Stephen Saad (Chairman), Gus Attridge, Rafique Bagus, Judy Dlamini, Sindi Zilwa

To assist the Board in discharging its collective responsibilities, certain Board tasks have been delegated to the Audit & Risk, Remuneration & Nomination and Transformation Committees. The Board recognises that it is ultimately accountable and responsible for the performance and affairs of the Company and that of the Group and that the delegation of authority in no way absolves the directors of the obligation to carry out their duties and responsibilities.

The Board Charter

The Board is governed by a Board Charter which details the Board’s composition, procedures for the appointment of directors, directors’ responsibilities and Board processes. The fiduciary duties and role of each director is also defined. In terms of the Charter, the Board is responsible for monitoring key risk areas, performance indicators and the effectiveness of management. Further responsibilities include:

• Ensuring that the policies and procedures of the Charter are complied with;
• Ensuring the development and maintenance of succession plans;
• Monitoring Board plans in terms of economic, environmental and social issues relating to the Group;
• Assessing and reviewing the strategic direction of the Group;
• Evaluating performance and determining key performance criteria;
• Evaluating the performance of the Chairman on an annual basis before the annual general meeting; and
• Evaluating legal and regulatory compliance.

The Board Charter was updated to define the role of Lead Independent Non-executive Director and this amendment was approved by the Board in June 2009. Going forward the Lead Independent Non-executive Director will be elected annually at the first meeting of the Board following the Company’s annual general meeting.

Board processes

New appointments

New Board appointments are proposed by the Remuneration & Nomination Committee, taking into account a balance of skills, experience and diversity required to lead, control and best represent the Group. In this regard, the Committee submits a formal proposal to the Board for its consideration each year.

A formal induction programme is in place for new Board members which sets out directors’ responsibilities and fiduciary duties and also includes information pertaining to relevant regulatory and statutory frameworks and to Group protocol. The Chairman and Company Secretary manage the induction of new directors and the orientation includes introductions to key management and site visits to Aspen’s local manufacturing facilities. New appointees receive copies of the latest interim announcements and annual financial results and are also provided with details on the current budget, Group structure, current Board and sub-committee composition, a schedule of upcoming Board meetings as well as the agenda and board pack for the next Board meeting.

Succession planning

Aspen continues to promote succession planning for all key positions. Succession plans are integrated into the key performance areas at management and executive levels and have been extended to the Group’s offshore operations. Succession plans are reviewed at every Remuneration & Nomination Committee meeting.

Self-evaluation

In accordance with the recommendations of King II, Aspen’s Board conducts an annual internal-evaluation process including an evaluation of the Board as a whole and individual evaluations for the various committees.

Assessments for individual directors were conducted by both executive and non-executive directors during the year. Peer reviews of each non-executive director were also undertaken by the Board. The Chairman discussed the results of these assessments with each director.