The board ensures that management’s plans and activities are consistent with our values and support our vision to be recognized as one of North America’s most respected, reliable, and competitive power producers.

At the end of 2013, the board consisted of 11 directors, two of whom were nominated and elected by EPCOR Utilities Inc. (together with its subsidiaries, EPCOR) pursuant to rights attached to the Special Voting Shares held by EPCOR, eight of whom were elected by common shareholders at Capital Power Corporation’s (Capital Power) annual meeting of shareholders in April 2013, and one of whom (Donald Lowry) was appointed by the board. On October 10, 2013, EPCOR’s ownership interest was reduced to less than 20% of our total common shares outstanding and common shares that can be issued in exchange for exchangeable LP units of Capital Power L.P. Donald Lowry, as an EPCOR-elect director, voluntarily tendered his resignation at that time. Subsequently, the board resolved to reappoint Donald Lowry to continue serving as a director and as chair of the board until Capital Power’s next annual meeting of shareholders. The board is comprised of 10 men and one woman.

Independence

The board is led by a non-executive chair. Nine of our 11 directors (>81%) are independent according to the standards of independence established under Canadian securities laws. Brian Vaasjo and Richard Cruickshank are not considered independent because of their positions as Capital Power’s President and CEO (Vaasjo), and partner of a law firm that provides us with legal services (Cruickshank).¹

^{1. Mr. Cruickshank does not personally provide Capital Power with legal services.}

Board committees

The board has three standing committees:

• Audit
• Corporate Governance, Compensation and Nominating
• Health, Safety, and Environment

The board can also establish ad-hoc committees as appropriate.

The Corporate Governance, Compensation and Nominating Committee reviews the composition of each committee after each annual meeting. Director independence, director qualifications, and individual skills and experience are considered when committees are established. Each committee has its own terms of reference, which it reviews and approves every year.Terms of Reference are posted on our website.

Board compensation

Our director compensation is designed to attract and retain the most-qualified people to serve on our board. It recognizes the size and complexity of the power industry, director compensation paid by a comparator group of companies, and the importance of share ownership to align the interests of directors and shareholders.

Director compensation includes annual retainers, attendance fees, and a modest travel allowance if a director cannot travel to or from a board or committee meeting within the same day. The annual equity retainer is paid in deferred share units (DSUs) to promote share ownership and align the interests of directors and shareholders.

Brian Vaasjo does not receive any director compensation because he is an employee of Capital Power and is compensated in his role as President and Chief Executive Officer.

Donald Lowry did not receive any compensation as a director or Capital Power’s board chair during the time he was a member of the board and also was employed, nominated, and elected by EPCOR. However, as of October 1, 2013, Mr. Lowry was no longer compensated by EPCOR and he began receiving compensation from Capital Power.

Share ownership

The board believes in aligning the interests of directors and shareholders. In 2009, the Corporate Governance, Compensation and Nominating Committee instituted share ownership guidelines requiring directors to hold at least three times the total value of their annual cash and equity retainer. They must meet the requirement within five years of the date they were appointed or elected to the board. As of March 10, 2014, eight of the nominated directors met the requirement.

More details about our Board of Directors are available in our comprehensive Corporate Governance Policy, our Board Terms of Reference and our Management Proxy Circular, including:

• Terms of Reference for each board committee
• Board committee membership
• Board director profiles
• Compensation and attendance for each board member
• Mechanisms for shareholder input