Matters of compliance with the Combined Code on corporate governance (the Combined Code)

The principle underlying the Combined Code is “comply or explain”, and the listing rules of the London Stock Exchange place a continuing obligation on listed companies to make a statement in their report and accounts regarding compliance with the Combined Code, and to give reasons for any areas of non-compliance.

We set out below our explanation of the combination of the roles of chairman and chief executive at Games Workshop, and also our views on the independence of our independent directors.

Chairman and chief executive

Following the appointment of M N Wells to the board on 3 December 2007, the previously combined role of the Chairman and Chief Executive has been split with T H F Kirby continuing as Chairman and M N Wells as Chief Executive.

Independence of Independent Directors

Background

The Combined Code states that the board should identify each independent director it considers to be independent, and the Code then lists various circumstances which may appear relevant to its determination. This includes (amongst others) if the director has served on the board for more than nine years.

At Games Workshop the board has had to confront this list of circumstances as two of the independent directors have served for more than nine years.

In making this assessment the board has taken into account the personal attributes of each director in relation to the current and future needs of the board. Independence (like judgement and wisdom) is not an attribute which can be measured by reference to a checklist. It is rather an attribute which the members of the board can observe being demonstrated by a director in his actions and interactions with other members of the board as it faces the various issues which are placed before it. It is the absence of complacency, lazy thinking and acceptance of the status quo.

In addressing this process, the chairman has set out his position as to the independence of the independent directors in his preamble to the 2003 annual report.

'I have learnt over the years just how valuable good non-executive directors (NEDs) can be. We are very lucky to have three excellent NEDs, all of whom work very hard on your behalf. Chris Myatt is our senior NED. An accountant by training, a businessman by experience, he is a practical man by nature. Chris chairs the committee in which the detailed performance of the business is raked over each month and our remuneration and nomination committee. He never lets a detail go unexplained, and if I find that irritating from time to time you should find it very comforting. Alan Stewart was a senior merchant banker and more recently has been a very successful CEO of Thomas Cook and is now the finance director of WH Smith Retail PLC. He chairs our audit committee. He is keenly (even aggressively) interested in ensuring shareholders get their due. Nick Donaldson is a senior corporate financier. A barrister by training he brings his forensic skills to chairing our city committee. This committee monitors the Company's interaction with the investment community. It also checks every word that the executives release to the world, in our half year and full year statements and at other times.

What impresses me most about these people, and what should give you great comfort, is their independence of mind. This is something that all NEDs should have, but no list of rules will ever guarantee it.'

Regarding the specific Combined Code circumstance of service of over nine years, the board's position is as follows.

The 'nine year rule' is a handy guide to the risk of directors becoming 'stale'. The board considers this risk periodically, but has not yet found it to be an issue at Games Workshop. If it did, it would react accordingly. Indeed, at present the board feels that both the long-term nature of the succession planning referred to above, and the requirement for members of the board to have a real understanding of, and empathy with, the Games Workshop Hobby, point in favour of retaining the experience the board currently has.

Conclusion

Based upon its assessment, which focuses on each director's attitude towards making his best contribution to the progress of the Company, the board considers that all three of the independent directors are independent.