The Board of Directors of Tarion Warranty Corporation is committed to a series of governance policies which are intended to support the supervisory role of the Board and to ensure that the Corporation acts in the best interest of its stakeholders. Some highlights of the Board’s current governance practices include the following:

Independence

To ensure independence of the Board and management, an outside Director acts as Chair of the Board. Only one Director, the President and Chief Executive Officer, is a member of Tarion management.

Board Composition

In accordance with the by-laws of the Corporation, membership on the Board of Directors represents a number of stakeholders with an interest in the home building industry in Ontario. The by-laws of the Corporation provide for the appointment of Directors from nominees recommended by each of the OHBA and the Ministry of Consumer Services, as well as an individual with a financial background. The 2010 Board was composed of 15 members and two associate members.

Financial Controls

The Audit Committee of the Board is composed entirely of outside and unrelated Directors whose responsibilities are set forth in a detailed Committee mandate. The Committee has the ability to deal directly with the external auditor regarding the Corporation’s annual financial statements, and with the external actuary regarding the warranty liabilities of the Corporation.

Risk Management

The Board, together with the Audit Committee, monitors, reviews and approves adherence to corporate policies to manage and control risk, as well as compliance with policies of the Corporation and regulatory requirements.

Strategic Planning

The Board engages in a strategic planning process each year which takes into account business policy initiatives and opportunities, as well as operational and financial risks. Throughout the year, the Board reviews corporate performance against the Corporation’s annual business plan and the current strategic plan.

Annual Performance Objectives

The Board approves the annual corporate business plan as well as the annual objectives of the President and Chief Executive Officer and the corporate key performance indicators.

Code of Governance Practices

Each member of the Board is required to sign a Code of Governance Practices that has been approved by the Board. This Code is intended to assist the Directors in performing their responsibilities to the Corporation with appropriate discipline and dedication.