Governance Guidelines

On behalf of TransAlta Corporation's shareholders, the Board of Directors is responsible for the:

• Stewardship of TransAlta Corporation (the "Corporation")
• Establishing the key policies and standards for the Corporation
• Reviewing and approving its strategic plans

To review the guidelines the Board of Directors of the Corporation has adopted to meet its corporate governance responsibilities, please download the attached PDF.

Statement of Corporate Governance Practices

The Toronto Stock Exchange (TSX), upon which TransAlta's common shares are listed, requires every listed company to disclose, on an annual basis, its approach to corporate governance.

TransAlta is also subject to corporate governance requirements, including disclosure requirements, imposed or proposed to be imposed by Canadian securities regulators, the New York Stock Exchange (NYSE) and the U.S. Securities and Exchange Commission, under the United States Sarbanes- Oxley Act ("SOX"). To review TransAlta's approach to corporate governance, compared with the TSX corporate governance guidelines, and, as appropriate, other Canadian and U.S. governance rules see Appendix B of the Management Proxy Circular.

Compliance with New York Stock Exchange Standards

Website disclosure required by Section 303A(11) of the New York Stock Exchange Company Manual:

Significant differences in Corporate Governance Practices

TransAlta’s corporate governance practices differ from those of the NYSE in only one respect:

Under the rules of the NYSE, the Company must assess the simultaneous service of its audit committee members who sit on the audit committees of more than three public companies. TransAlta has not adopted a policy with respect to this simultaneous service but instead reviews each situation on its own merits. One of the Company’s Audit and Risk Committee members, Michael M. Kanovsky, currently sits on the audit committee of four public companies. The Board has considered this matter taking into consideration: i) the size and time commitments of such companies, ii) Mr. Kanovsky’s professional responsibilities outside of TransAlta; and iii) Mr. Kanovsky’s participation and commitment during his tenure on the TransAlta Board. The Board has determined that Mr. Kanovsky’s professional responsibilities beyond TransAlta are not so substantial as to preclude the attention and focus necessary for him to fulfill his duties and responsibilities to the Audit and Risk Committee of the Company and to the Board overall. The Board has affirmatively determined that the simultaneous audit committee service of Mr. Kanovsky on more than three public companies does not impair his ability to effectively serve on the Audit and Risk Committee of the Company.