Directors' Code of Conduct

Directors have a duty to manage or supervise the management of the business and affairs of the corporation. In carrying out this duty, Directors are expected to act honestly and in good faith with a view to the best interests of the corporation. To this end, the Board of Directors has committed itself to maintaining a high standard of Corporate Governance which incorporates as its basis principles of good conduct and high ethical behavior.

To discharge their duties the Directors have adopted the following principles for business conduct and ethical behavior.

Compliance with law

The Directors shall conduct all their business and affairs in compliance with applicable laws, rules and regulations and shall encourage and promote such behaviors for themselves, officers and employees.

Conflicts of interest

Directors shall conduct their business and affairs in a manner that ensures their private or personal interest does not interfere or appear to interfere with the interest of the corporation, including conflicts relative to personal, financial or other gain.

A Director who is a party to a material contract or proposed material contract or has a material interest in any person who is a party to a material contract or proposed material contract with the Corporation shall inform the Chair of the Board of any such conflict of interest. The disclosing Director shall not thereafter vote on any decision or action in which there is a conflict of interest.

Fair dealing

The corporation adheres to a policy of fair dealing in all its undertakings. Directors shall endeavor to deal fairly with the corporation’s customers, suppliers, competitors and employees. Taking unfair advantage through manipulation, concealment, abuse of privilege, misrepresentation and other unfair dealing practices is unacceptable.

Confidentiality

Directors shall maintain the confidentiality of information entrusted to them except in circumstances where disclosure is authorized or legally mandated. Confidential information shall not be used for personal gain and Directors shall adhere to the corporation’s policy on Insider Trading.

Protection and proper use of corporate assets

Directors shall ensure that the corporation’s assets are protected and properly and efficiently used for legitimate business purposes.

Corporate opportunities

Directors owe a duty to advance the corporation’s legitimate interests whenever an opportunity arises and are prohibited from:

• Taking personal advantage of opportunities discovered through the use of corporate assets, property, information on their position
• Using or deploying corporate assets, property, information or their position for personal gain
• Engaging in competitive enterprises with the corporation.

Insider trading

Directors of TransAlta are designated as insiders and are subject to the trading restrictions and regular blackout periods as are set forth in the corporation’s Insider Trading Policy. Directors are also required by securities laws to file insider reports relating to each transaction involving the acquisition or disposition of TransAlta securities. TransAlta’s insider policy also requires that all Directors pre-clear in writing with either the Executive Vice-President, Legal or the Corporate Secretary any acquisition or disposition of a TransAlta security.

Incident reporting

Directors are encouraged to promote ethical behavior in all things they do and to encourage the Corporation’s officers or leaders to talk with employees about ethical behaviours.

The Directors on behalf of the Corporation will not allow any retaliation by officers or leaders in respect of reports made in good faith by any employee.

Waivers

From time to time, a situation may arise that warrants a waiver of one or more provisions of this Code. It is recommended that a Director who believes that a waiver may be appropriate should first consult with the Chair of the Governance and Environment Committee. A waiver may only be granted by the Board of Directors and must be disclosed promptly as required by law and/or stock exchange requirements.

Annual review

Annually, the corporation expects each Director to review this Code of Business Conduct and to satisfy themselves that they have adhered to the stated principles and standards or, if they have failed to do so, to ensure such non-compliance has been reported to the Board of Directors.