Corporate Governance

Cochlear Limited is committed to high standards of corporate governance for which the Directors are accountable to shareholders. Cochlear has adopted the corporate governance guidelines as published by the Australian Stock Exchange and continues to monitor developments in this area. This statement sets out the guiding principles adopted by Cochlear to achieve sound corporate governance. Cochlear 2007 Annual Report Corporate Governance Section.

The Board

The Board, working with senior management, is responsible for overall business performance. It approves Company goals and directions, plans and performance and ensures appropriate policies, procedures and systems are in place. The Board Charter formalises and discloses the functions reserved to the Board and those delegated to management.

Committees

The Board has established standing committees as an efficient mechanism for considering detailed issues and making recommendations for consideration by the entire Board. These committees adopt charters setting out the matters relevant to the composition, responsibilities and administration of each committee. Current committees of the Board include:

Audit Committee

The Board of Cochlear Limited has established an Audit Committee to consider and review accounting issues, financial reporting, risk management and internal controls. The Audit Committee is guided by the Audit Committee Terms of Reference.

Medical Science Committee

The Board of Cochlear Limited has established a Medical Science Committee to assist the Board discharge its responsibility in relation to the medical aspects of the Company's Cochlear Implant program. The Medical Science Committee is guided by the Medical Science Committee Terms of Reference.

Nomination Committee

The Board of Cochlear Limited has established a Nomination Committee. The Nomination Committee makes recommendations as to the Board on appointing any new Executive or Non-Executive Directors, taking into account the Board's size, composition and effectiveness. The Nomination Committee is guided by the Nomination Committee Terms of Reference.

Remuneration Committee

The Remuneration Committee's function is to oversee company remuneration and compensation plans, policies and procedures. The Remuneration Committee monitors, reviews and approves changes to the levels of remuneration received by any executive director and senior executives. The Remuneration Committee is guided by the Remuneration Committee Terms of Reference.

Technical and Innovation Committee

The Board established a Technical and Innovation Committee for the purpose of providing the Board with the understanding of Cochlear's technology programs, priorities and resource allocation. This contributes to the Board's oversight of the technology strategy. The Technical and Innovation Committee is guided by the Technical and Innovation Committee Terms of Reference.

Company Policies

Cochlear's business practices are governed by a series of codes and policies. It is the intention of Cochlear's Board that these codes and policies are understood and strictly adhered to by all relevant parties and that they are reviewed and updated on a regular basis. Codes and policies include:

Code of Business Conduct

Cochlear Limited has a proud reputation for acting with integrity in all of its business dealings. We maintain this reputation by thinking about our behaviour and by taking action that will reflect well on us. The Code of Business Conduct is a guide for all employed by Cochlear Limited, including the Board, management and employees, in the way we do business when representing Cochlear Limited.

Continuous Disclosure Policy

Cochlear Limited has obligations under the Corporations Act and ASX Listing Rules to keep the market fully informed of information which may have a material effect on the price or value of its securities. Cochlear's policy is to strictly comply with these requirements, and Cochlear discharges these obligations by releasing information to the ASX in the form of an ASX release or disclosure of other relevant documents. View the Continuous Disclosure Policy.

Dealing in Securities Policy

Directors, officers and employees of Cochlear Limited Group Ltd ("Company") (and their respective Associates) are subject to the insider trading requirements of the Corporations Act ("Act") in relation to any Dealing in Securities. Substantial criminal and civil penalties are imposed if the Act is not observed.

Performance Evaluation of the Board and Key Executives Policy

The Board of Directors of Cochlear Limited has established a Performance Evaluation Process for evaluation of the performance of the Board, Board Committees, individual Directors and key Executives.

Risk Management Policy

Cochlear Limited is accountable to its shareholders for the management of company assets and maximisation of shareholder value. Cochlear's Risk Management Policy provides the framework to manage the risks associated with all the activities of Cochlear Limited.

Shareholder Communications Policy

Cochlear Limited's communication to shareholders is based on openness and honesty. These principals are set out in the Company's Shareholder Communications Policy.