About the Board of Directors

The board is responsible for our stewardship. It provides independent leadership for overseeing our business so we grow and sustain profits responsibly.

The board is actively engaged, supervises our business and affairs, and is specifically responsible for:

• management oversight and strategic planning
• enterprise risk management
• shareholder engagement.

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.

In 2012, the board consisted of 12 directors, four of whom were nominated by EPCOR Utilities Inc. (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 April 2012. The board is led by a non-executive chair, and is comprised of 11 men and one woman.

Independence

The board is led by a non-executive chair. Ten of our 12 directors (83%) 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).

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. These 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 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 is Chair of the board but does not receive any compensation as a director or board chair because EPCOR is a major shareholder and he is compensated by EPCOR.

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 12, 2013, seven 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