corporAte goVernAnce independence of tHe BoArd MAndAte of tHe BoArd coMMittees of tHe BoArd Audit coMMittee ARC’s board comprises nine members, all of whom are “independent” directors, except for the  Chief Executive Officer. ARC uses the definition of independence as defined in nI 58-101 that states that  a director is independent if the member has no direct or indirect material relationship with the company.  A material relationship means a relationship that could, in the opinion of the board of directors, reasonably  interfere with the exercise of a member’s independent judgement. The Board has determined that none of the directors who serve on its committees has a material  relationship with ARC that could reasonably be expected to interfere with the exercise of a director’s  independent judgment. Both the Chairman of the Board and the vice-Chairman are independent directors.  They are responsible for managing the affairs of the Board and its committees, including ensuring the  Board is organized properly, functions effectively and independently of management and meets its  obligations and responsibilities. The Board of Directors of ARC sees its primary role as the stewardship of ARC and for overseeing the  management of the business and affairs of ARC, with the goal of achieving ARC’s fundamental objective  of providing long-term superior returns to shareholders. The Board oversees the conduct of the business  and management through a number of activities, including its review and approval of strategic, operating,  capital and financial plans; succession planning for senior officers and the appointment and performance  review of the Chief Executive Officer. The full mandate of the Board and its committees is available on our  website at www.arcresources.com. The Board has established an Audit Committee, a Reserves Committee, a Human Resources and  Compensation Committee, a Policy and Board governance Committee, a Health, Safety and Environmental  Committee and a Risk Committee to assist it in the discharge of its duties and responsibilities. All of the  committees comprise of independent directors and report to the Board of Directors of ARC. MeMbeRs:  Fred Dyment (Chair), Walter DeBoni, James Houck and Kathleen O’neill. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to the  integrity and completeness of the annual and quarterly financial statements and accompanying  management discussion and analysis provided to shareholders and regulatory bodies; compliance  with accounting and finance based legal and regulatory requirements; review of the independence  and performance of the external auditor, internal accounting systems and procedures. The committee  reviews the audit plans of the external auditors and meets with them at the time of each committee  meeting, independently of management.  There were six meetings of the committee in 2010. ARC is committed to  the highest standards  for its governance  practices and  procedures. ARC’s governance  practices are routinely  reviewed, appraised  and modified to ensure that they  are appropriate for a corporation of  ARC’ s size and  sta ture.  ARC’s  a pproach to corporate  governance meets  the guidelines  established by the  Canadian Securities  Administrators (CSA)  as laid out in national  Instrument 58-101. 32 10 ARC ResouRCes AnnuAl  report