Board of Directors
In keeping with contemporary practices of good corporate governance, immediately following the completion of the company’s Initial Public Offering in 2009, and continuing at the date of publication in 2011, Capital Power was governed by a board of 12 directors, ten of whom are independent for the purposes of National Instrument 58-101.

Board Roles and Responsibilities
The Board of Directors oversees the management of Capital Power and is responsible for its overall direction. The board is responsible for:

• Management selection, retention, succession, and remuneration;
• Overseeing the development of the company’s business strategy and monitoring its progress;
• Approving significant company policies and procedures;
• Overseeing timely and accurate reporting to shareholders and public filing of documents; and
• Approving major company decisions, such as: budgets; acquisitions; major capital expenditures; and documents, including such things as audited financial wstatements, declarations of dividends, offering circulars, and initiation of bylaw amendments.

The full terms of reference for the board are available in Appendix A of the 2011 Management Proxy Circular. Appendix C includes terms of reference for individual directors, outlines the personal and professional characteristics required for all directors, and is used as the basis for performance evaluation and recruitment.

Corporate Governance Practices
Our corporate governance practices are intended to meet or exceed the rules and guidelines of Canadian securities regulators, which include the following:

• National Instrument 58-101 – Disclosure of Corporate Governance Practices (NI 58-101)
• National Policy 58-201 – Corporate Governance Guidelines
• National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings
• National Instrument 52-110 – Audit Committees (NI 52-110)

Board Composition and Independence  
The Board of Directors is required to have a minimum of three and a maximum of 12 directors. As of September 2011, the board consisted of 12 directors, four of whom were nominated by EPCOR pursuant to rights attached to the Special Voting Shares held by EPCOR, and eight of whom were elected by shareholders at Capital Power’s annual meeting in May 2010. The board comprises 11 men and one woman.

The board is led by a non-executive chair. The board has determined that all of the directors, except Messrs. Cruickshank and Vaasjo, are independent within the meaning of applicable Canadian securities laws, on the basis that they do not have any direct or indirect relationship with the company that could, in the view of the board, be reasonably expected to interfere with the exercise of their independent judgment.

Board Structure
The four standing committees of the board include the following:

1. Audit committee
2. Corporate Governance, Compensation and Nominating committee
3. Environment, Health and Safety committee
4. Keephills 3 Project Oversight committee

All or a majority of the members of the committees are independent.

In accordance with its terms of reference, each committee is responsible for overseeing certain corporate governance matters and making appropriate recommendations to the board. Each committee is committed to meeting or exceeding governance standards set out by various regulatory authorities and governance policy-makers, including the Canadian Securities Administrators’ instruments relating to corporate governance.

Additional information on the terms of reference for each committee, and mechanisms for shareholder input, is available online in the 2010 Management Proxy Circular.

Link Between Compensation and Corporate Performance
To ensure alignment with the interests of shareholders, board directors and named executive officers are subject to share ownership guidelines, disclosed in the 2010 Management Proxy Circular.

The company’s practices regarding compensation for directors are designed to attract and retain the most qualified individuals to serve on the board, to reflect the size and complexity of the industry, and to reinforce the emphasis the company places on aligning directors’ compensation with the interests of shareholders.

The company provides its directors with a compensation package consisting of an annual retainer, meeting fees, and equity-based compensation in the form of deferred stock units (DSUs).

Non-employee directors receive a portion of their annual equity retainer in the form of DSUs and are also subject to share ownership guidelines that require ownership of Common Shares and/or DSUs with an acquisition or market value equivalent to not less than three times the aggregate value of their annual cash and equity retainer.

Directors have five years from their respective dates of appointment to accumulate the required number of Common Shares and/or DSUs.

 Last Updated: September 14, 2011