The Board of Directors is responsible for supervising the successful management of the Corporation's global business. It has the authority and obligation to protect and enhance the assets of the Corporation in the interests of all shareholders. Although Directors may be elected to bring special expertise or a point of view to Board deliberations, they are not chosen to represent a particular constituency. The best interests of the Corporation and its shareholders must be paramount at all times. In pursuing the best interests of the Corporation, the Board should consider the Corporation’s customers, employees, suppliers and the communities and environment where it does business; recognizing that all are essential to a successful business.

The Board has an active responsibility to ensure the operation of a successful business. The involvement and commitment of Directors is evidenced by regular Board and Committee attendance, preparation, and participation in setting goals and requiring performance in the interests of shareholders.

A - Board Independence and Integrity

B - Functions of the Board

C - Selection and Composition of the Board

D - Board Leadership

E - Performance Evaluation and Compensation

F - Meeting Procedures

G - Board Committees

H - Evaluation of CEO Performance and Succession Planning

I - Access to Management and Outside Advisors

J - Options

K - Communication From and With Shareholders

A.	Board Independence and Integrity
A.1	Boards function most effectively when individual directors are free from conflicts of interest and exercise independent judgment in discharging their responsibilities. The Corporation shall comply with the independence requirements of all stock exchanges on which it is listed. No more than two employees shall serve as Directors at any time. The Board will take into account the independence of each Director nominee in assessing his or her qualifications to serve on the Board. For a Director to be considered independent, the Board must determine that the Director does not have any material relationship with the Corporation, either directly or indirectly (e.g. as a partner, shareholder or officer of an organization that has a relationship with the Corporation). For purposes of this Section A.1, references to the Corporation include all of its subsidiaries. The Board has established standards to assist it in making determinations of independence, which conform to or are more exacting than applicable regulations and stock exchange rules. The Board will make and publicly disclose an independence determination for each Director when the Director is first elected to the Board and annually thereafter for all nominees as Directors. A Director nominee’s failure to meet the standards for independence set forth in these principles or those prescribed by any stock exchange listing or other regulatory or legal requirements, shall not preclude the Board from determining that such Director nominee nonetheless has the requisite integrity, experience, skill and expertise to be an effective Director of the Corporation. The independence standards established by the Board are as follows: a) A Director will not be considered independent if, currently or within the preceding three years, as applicable:   i) the Director is, or was, an employee or executive officer of the Corporation, including any affiliated entity of the Corporation;   ii) an immediate family member of the Director is, or was, an executive officer of the Corporation, including any affiliated entity of the Corporation;   iii) the Director is, or was, a partner of, employed by or affiliated with any of the Corporation’s present or former internal or external auditors;   iv) an immediate family member of the Director is, or was, a partner of, employed by or affiliated with any of the Corporation’s present or former internal or external auditors as a partner, principal, manager or in any other capacity; or   v) an executive officer of the Corporation serves or served on the compensation committee of an entity which, in turn, employs or employed either (a) the particular Director as an executive officer or (b) an immediate family member of such Director as an executive officer. b) A Director will not be considered independent if the Director received any direct compensation, or an immediate family member of the Director received more than US$100,000 in direct compensation, within the past three fiscal years from the Corporation, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided that such compensation is not contingent in any way on continued service). c) A Director will not be considered independent if the Director has any of the following commercial or charitable relationships:   i) the Director has served as an executive officer or employee of, or any of his or her immediate family members has served as an executive officer of, another company that makes payments to, or receives payments from, the Corporation for property or services in an amount that, in any one of the three most recent fiscal years, exceeds the greater of (x) US$1,000,000 and (y) 2 percent of the annual consolidated gross revenues of the company for which such Director, or any of his or her immediate family members, has served as an executive officer (or as an employee in the case of the Director); or   ii) the Director has served as an officer, director or trustee of a charitable organization, and the Corporation's discretionary charitable contributions to that organization exceeds 1.5 percent of that organization’s total annual consolidated gross revenues within any one of the three most recent fiscal years (provided that the Corporation’s matching of employee charitable contributions will not be included in the amount of the Corporation’s contributions for this purpose). d) Where a relationship exists as a result of a Director who is a limited partner, a non-managing member or who occupies a similar position in an entity that does business with the Corporation, or who has a shareholding in such entity which is not significant, and who, in each case, has no active role in sales to, purchases from, or in providing services to the Corporation and derives no direct material benefit from same, such relationship shall be considered not to be material.
A.2	Where the Corporation or any of its subsidiaries enters, or proposes to enter, into a business relationship with a corporation or entity with which a Director is affiliated as an officer, partner or significant shareholder, the following guidelines will apply: a) the Corporation will consider:   i) whether the relationship would cause the Director to lose his or her status as an independent Director;   ii) whether the relationship would prevent the Director from serving on any particular Board Committee;   iii) whether the relationship was already in existence prior to the Director joining the Board; and   iv) who initiated the relationship and whether the relationship is beneficial to the Corporation; b) any new relationship must be brought to the attention of the Board Chair, in advance where practicable, and, where such relationship is not one covered by Section A.1, be subject to the determination of the Corporate Governance and Nominating Committee as to its materiality and the consequent effect on the independence of the Director; and c) the relationship will be disclosed in the Corporation’s public disclosure documents in accordance with applicable regulations.
A.3	There shall be no more than two board interlocks at any given time. A board interlock occurs when two of the Corporation's Directors also serve together on the board of another company. In addition, Compensation Committee members must not be part of a compensation committee interlock within the meaning of SEC regulation S-K. (Also see Sections C.6 and C.7 regarding service on other boards.)
A.4	The Board has determined that the Corporation is best served by dividing the responsibilities of the Board Chair and Chief Executive Officer ("CEO"). The Board Chair is independent and chosen by the full Board.
A.5	The Corporation will not make any personal loans or extensions of credit to Directors or executive officers. Subject to Section A.1(b), no Director or immediate family member of the Director may provide personal services for compensation to the Corporation.
A.6	The Board has adopted a policy of meeting in executive session, with only independent Directors present, at each regularly scheduled meeting of the Board. The presiding officer at these executive sessions is the Board Chair or, in his or her absence, a Director selected by majority vote of those present. Sessions are of no fixed duration and participating Directors are encouraged to raise and discuss any issues of concern.
A.7	Each Director must possess and exhibit the highest degree of integrity, professionalism and values. All Directors and senior officers are bound by the PotashCorp Code of Business Conduct and no waiver of the application of that Code to Directors or senior officers is permitted. Directors must never be in a conflict of interest with the Corporation. A Director who has a conflict of interest regarding any particular matter under consideration should advise the Board, refrain from debate on the matter and abstain from any vote regarding it.
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B.	Functions of the Board
B.1	The Board has eight scheduled meetings a year including a two-day meeting in September where risk management is reviewed and a two-day meeting in November where corporate strategy is the principal agenda item. Special meetings of the Board are convened as required. The Board has adopted a Board Charter which sets out its responsibilities and the limits to management's responsibilities. The Board is specifically charged with: > oversight and approval on an ongoing basis of the Corporation's business strategy; > appointing the CEO and monitoring his or her performance; > approving the appointment of all corporate officers and ensuring that adequate provision has been made for management succession; > establishing standards for management and monitoring their performance; and > approving procedures for strategy implementation, identifying and managing risks, and ensuring the integrity of internal control and management information systems. The Board has specifically retained responsibility for managing its own affairs, including planning its composition, selecting the Board Chair, nominating candidates for election to the Board, appointing Committees and determining Director compensation.
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C.	Selection and Composition of the Board
C.1	All Directors are elected each year by the shareholders at the annual meeting of shareholders. The Corporate Governance and Nominating Committee is responsible for recruiting and proposing to the full Board new nominees for Directors. The Corporate Governance and Nominating Committee, in the discharge of its duties: > in consultation with the Board and CEO and, on an ongoing basis, identifies the mix of expertise and qualities required for the Board; assesses the attributes new Directors should have for the appropriate mix to be maintained; > in consultation with the Board and CEO and, on an ongoing basis, maintains a database of potential candidates; > has implemented a procedure to identify, with as much advance notice as practicable, impending Board vacancies, so as to allow sufficient time for recruitment and for introduction of proposed nominees to the existing Board; > develops a "short-list" of candidates and arranges for each candidate to meet with the Corporate Governance and Nominating Committee, the Board Chair and the CEO; > recommends to the Board as a whole proposed nominee(s) and arranges for their introduction to as many Board members as practicable; > ensures that prospective candidates are informed of the degree of energy and commitment the Corporation expects of its Directors; and > encourages diversity in the composition of the Board. In an uncontested election, any nominee for Director who fails to receive votes in favour of his or her election representing at least a majority of the votes cast (added together with the votes withheld) shall tender his or her resignation for consideration by the Corporate Governance and Nominating Committee. Except in extenuating circumstances, it is expected that the Committee will recommend to the Board that the resignation be accepted and effective within a period of 90 days and that the action taken be publicly disclosed. To the extent possible, the Committee and Board members who act on the resignation shall be Directors who have themselves received a majority of votes cast. In addition to the slate of nominees proposed by the Board, shareholders may propose individuals to be nominated for election as Directors. The procedure for making such proposals is outlined in the annual proxy circular and in the Canada Business Corporations Act. Shareholders may also at any time suggest nominees for election to the Board by submitting the names and supporting information regarding such nominees to the Corporate Secretary.
C.2	The Corporation's Articles of Continuance provide that the Board shall have a minimum of 6 Directors and a maximum of 20 Directors. The Board has considered its size and has concluded that, at present, a board comprising 12 members (its current size) allows it to most effectively discharge its duties. Changes in circumstances could result in the Board coming to a different conclusion.
C.3	The Board does not believe that arbitrary term limits are appropriate, nor does it believe that Directors should expect to be re-nominated annually until they reach mandatory retirement age. On an ongoing basis a balance must be struck between ensuring that there are fresh ideas and viewpoints available to the Board while not losing the insight, experience and other benefits of continuity contributed by longer serving Directors.
C.4	Directors will not stand for re-election after reaching the age of seventy years.
C.5	In addition to the circumstance set forth in Section C.1, a Director should offer to resign in the event of a change in principal job responsibilities or in the event of any other significant change in his or her circumstances, including one where continued service on the Board might bring the Corporation into disrepute. For greater certainty, a determination by the Board that a Director is no longer independent shall be considered a significant change in such Director's circumstances. The Corporate Governance and Nominating Committee will consider the change in circumstance and recommend to the Board whether the resignation should be accepted.
C.6	Directors who are employed as CEOs, or in other senior executive positions on a full-time basis, should not serve on more than two boards of public companies in addition to the Corporation's Board. Other Directors should not serve on more than four boards of public companies in addition to the Corporation's Board.
C.7	The CEO of the Corporation should not serve on the board of more than two other public companies and should not serve on the board of any other company where the CEO of that other company serves on the Corporation's Board. In all cases, prior to accepting an appointment to the board of any public company, the CEO of the Corporation must review and discuss the appointment with the Board Chair of the Corporation.
C.8	The CEO of the Corporation must resign from the Board immediately upon retirement or otherwise resigning as CEO.
C.9	The Board has adopted a written New Director Orientation Policy designed to: > provide each new Director with a baseline of knowledge about the Corporation which will serve as a basis for informed decision-making; > tailor the program for each new Director to take into account his or her unique mix of skills, experience, education, knowledge and needs; and > be delivered over a period of time to minimize the likelihood of overload and maximize the lasting educational impact. The orientation program is tailored to the needs of each new Director, and will consist of a combination of written materials, one-on-one meetings with senior management, site visits and other briefings and training as appropriate.
C.10	The Board recognizes the importance of ongoing director education and the need for each Director to take personal responsibility for this process. To facilitate ongoing education, the Corporation will: > maintain a Directors' intranet site to facilitate the exchange of views and published information; > maintain a membership for each Director in an organization dedicated to corporate governance and ongoing director education; > each year encourage and fund the attendance of each Director at one seminar or conference of interest and relevance and fund the attendance of each Committee Chair at one additional seminar or conference. In all cases, approval for attendance shall be obtained, in advance, from the Board Chair; > encourage presentations by outside experts to the Board or Committees on matters of particular import or emerging significance; and > at least annually, schedule a site visit in conjunction with a Board meeting.
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D.	Board Leadership
D.1	A position description for the Board Chair has been developed and approved by the Board. Amongst other things, the Chair is expected to: > provide leadership necessary for effective functioning of the Board; > lead in the assessment of Board performance; > assist the Compensation Committee in monitoring and evaluating the performance of the CEO; > lead the Board in ensuring succession plans are in place at the senior management level; and > act as an effective liaison between the Board and management.
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E.	Performance Evaluation and Compensation
E.1	The Board has adopted the following five-part effectiveness evaluation program: i) Annual Board Assessment by all Members of the Board Each year Board members complete a detailed questionnaire which a) provides for quantitative ratings in key areas, and b) seeks subjective comment in each of those areas. The questionnaire is administered by the Corporate Secretary. Responses are reviewed by the Corporate Secretary and the Chair of the Corporate Governance and Nominating Committee. A summary report is then prepared and provided to the Board Chair, the Corporate Governance and Nominating Committee and the CEO and then reported to the full Board by the Corporate Governance and Nominating Committee Chair. Attribution of comments to individual Directors in the summary report is made only if authorized by that Director. In assessing the responses to the questionnaire, the focus is on continuous improvement. Matters requiring follow-up are identified, action plans are developed and there is ongoing monitoring by the Corporate Governance and Nominating Committee to ensure satisfactory results. As part of the annual Board assessment, the Board reviews and considers any proposed changes to the Board Charter. ii) Annual Assessment of each Committee by Members of that Committee Each year members of each Committee complete a detailed questionnaire designed to allow Committee members to evaluate how well each Committee is operating and to make suggestions for improvement. The questionnaire is administered by the Corporate Secretary who receives responses and reviews them with the appropriate Committee Chair. A summary report is then prepared and provided to the Board Chair, the Chair of the Corporate Governance and Nominating Committee, the appropriate Committee and the CEO and then reported to the full Board by the appropriate Committee Chair. As part of the annual Committee assessment, the Board reviews and considers any proposed changes to the Committee Charters. As with the Board assessment, the focus is on continuous improvement. Chairs of each Committee are expected to follow up on matters raised in the Committee assessments and take such action as appropriate. Each of the Audit, Compensation, Corporate Governance and Nominating, and Safety, Health and Environment Committees participate in this process. iii) Annual Assessment of the Board Chair by Members of the Board Each year members of the Board are asked to assess and comment on the discharge, by the Board Chair, of his duties. Individual responses are received by the Chair of the Corporate Governance and Nominating Committee. A summary report is then provided to the Board Chair and the full Board, with no attribution of comments to individual Directors without their consent. As part of the annual Board Chair assessment, the Board reviews and considers any proposed changes to the Board Chair position description. iv) Annual Assessment of each Committee Chair by Members of each Committee Each year, members of each Committee are asked to assess and comment on the discharge, by each Committee Chair, of his or her duties. Responses are received by the Corporate Secretary and the Committee Chair under review. A summary report is then provided to the appropriate Committee and to the full Board, with no attribution of comments to individual Directors without their consent. As part of the annual Committee Chair assessment, the Board reviews and considers any proposed changes to the Committee Chair position descriptions. v) Annual Assessment of Individual Directors Each year during the period from May to September, the Board Chair (and, as in the opinion of the Board Chair is desirable, the Chair of the Corporate Governance and Nominating Committee) formally meets with each Director individually to engage in full and frank two-way discussion of any and all issues which either wish to raise, with a focus on maximizing the contribution of each Director to the Board and Committees. In completing the review, the Board Chair will employ a checklist, discuss both short term and long term goals, and establish action items to allow individual Directors to enhance both his or her personal contributions and overall Board effectiveness. The Board Chair will share peer feedback with each Director as appropriate and will review progress and action taken. Each Director, during such formal review, shall be prepared to discuss with the Board Chair how the Directors, both individually and collectively, could operate more effectively. The Board Chair will discuss the results of the individual evaluations with the Chair of the Corporate Governance and Nominating Committee and report summary findings to both that Committee and to the full Board at the November meeting.
E.2	The Compensation Committee annually reviews both the amount and components of the compensation package for Directors and for the Board Chair as compared to a selected peer group of about 20 publicly traded companies similar in size (sales and/or market capitalization) to the Corporation. Directors' total compensation is targeted to approximate the 50th percentile total compensation of the peer group.
E.3	The Board believes that the economic interests of Directors should be aligned with those of shareholders. To achieve this, all Directors are expected to hold shares and/or Deferred Share Units ("DSUs") in the Corporation. By the time a Director has served on the Board for five years, he or she must own shares and/or DSUs with a value at least five times the annual retainer paid to Directors with at least one-half of such ownership requirement to be satisfied by the time a director has served on the Board for two and one-half years. The Board may make exceptions to these standards where, as a result of the unique financial circumstances of a Director, compliance would result in an unacceptable hardship.
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F.	Meeting Procedures
F.1	The agenda for each Board meeting shall be established by the CEO and the Board Chair, taking into account suggestions from other members of the Board. Meeting materials and information shall be distributed in advance of each meeting so as to provide adequate time for review. The Board has a policy of holding one meeting each year at one of the Corporation's operating facilities. Site visits by the Board and meetings with senior management of the facility are incorporated into the itinerary. Directors are expected to attend, in person or via tele- or video-conference, all meetings of the Board and the Committees upon which they serve, to come to such meetings fully prepared, and to remain in attendance for the duration of the meeting. Where a Director's absence from a meeting is unavoidable, the Director should, as soon as practicable after the meeting, contact the Board Chair, the CEO, or the Corporate Secretary for a briefing on the substantive elements of the meeting.
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G.	Board Committees
G.1	The Board has established the following Committees: > Audit; > Corporate Governance and Nominating; > Compensation; > Safety, Health and Environment. Each Committee has a charter. Committee members and Committee Chairs are elected annually by the Board. The Audit, Corporate Governance and Nominating, and Compensation Committees are each comprised entirely of independent Directors. Members of the Audit Committee must not and do not directly or indirectly receive any consulting, advisory or other compensatory fee from the Corporation other than their Director's compensation. Each Committee meets regularly throughout the year, averaging at least four meetings annually. Minutes of all Committee meetings are kept, circulated to all Committee members, and available to any Director. Committee Chairs report at each Board meeting on any meetings or activity of the Committee since the most recent meeting of the Board.
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H.	Evaluation of CEO Performance and Succession Planning
H.1	A position description for the CEO has been developed and approved by the Board. The Compensation Committee, in consultation with the CEO, establishes goals and objectives for the upcoming year. The Committee annually reviews the CEO's performance in light of these previously established goals and objectives. The Compensation Committee also reviews annually the CEO's compensation and, together with all other independent members of the Board, approves such compensation.
H.2	The Board Charter provides that the Board has responsibility for ensuring that a succession plan is in place, both for the CEO and for other management. Regular reviews of succession planning are made to the Board by management and the Compensation Committee regularly reviews CEO succession planning.
H.3	There should be available, to the Board Chair and the Chair of the Compensation Committee, the CEO's recommendations as to a successor, in the event an emergency replacement is required.
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I.	Access to Management and Outside Advisors
I.1	All Directors have unfettered access to management of the Corporation. In addition, Company personnel who can make a substantive contribution to matters under consideration at a meeting of the Board will be invited to attend. Management will also be invited to meet socially with the Board.
I.2	The Board and its Committees have the right at any time to retain independent outside legal, financial or other advisors.
I.3	Individual Directors may engage outside advisors, at the Corporation’s expense.
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J.	Options
J.1	The Corporation has adopted a policy of not re-issuing or re-pricing stock options after their grant.
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K.	Communication From and With Shareholders
K.1	Any security holder may contact the Board by email or by writing to the Board c/o the Corporate Secretary. Matters relating to the Corporation's accounting, internal accounting controls or auditing matters will be referred to the Audit Committee. Other matters will be referred to the Board Chair.
K.2	To further facilitate communication between the Corporation's shareholders and the Board, all Directors standing for re-election and all new Director nominees are expected to attend the annual meeting of shareholders.
K.3	The Chair of the Compensation Committee will respond to any questions raised at the annual meeting of shareholders which relate to Board or executive compensation.
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