Corporate Governance

We have long been committed to good corporate governance and disclosure practices. These practices promote independent, ethical and accurate corporate decision-making and public disclosure. Strong corporate governance is essential to our long-term sustainability and business success.

We continually evaluate and adapt our governance and disclosure practices to fully comply with changing legal requirements. Our corporate governance practices are posted on our website www.transalta.com, along with information on the mandates of our Board committees.

Board of Directors

The Board of Directors' role is to govern TransAlta to ensure its shareholders and other stakeholders, including employees, customers and the communities in which we work and live, benefit from our activities.

TransAlta's Board has 12 members, with John Ferguson, an independent director, serving as chair. Our Board members focus on assessing strategy, management performance, compensation plans, financial results, internal controls, risk profile and environmental issues. They also ensure the company maintains a culture of the highest ethical and professional standards. All members of the Board, except president and CEO Steve Snyder, are independent of management.

Board Committees

Board committees are responsible for review and oversight of the company's strategies and practices. These include the Audit and Environment Committee, Human Resources Committee and Nominating and Corporate Governance Committee. All members of the Board committees are independent.

The Audit and Environment Committee's role is to review performance, assess financial risks and environmental risks and identify emerging regulations affecting our company's activities. Committee members receive quarterly reports, covering our EH&S performance, audit findings and emerging issues and trends. This committee met four times in 2004.

Governance practices

During the past year, we continued to support strong corporate governance practices through our reporting framework, which ensures our Board has timely and detailed information on key risks to our business.

At its annual two-day strategic planning session, the Board discusses environmental risks and opportunities, as part of a detailed review of our assets. In 2004, special attention was focused on climate change and mercury emissions from our coal plants, two areas where our company faces significant environmental challenges.