Guidelines

The Directors of Progress Energy, Inc., are the representatives of the Company's shareholders and direct the management of the Company on the shareholders' behalf. The shareholders' main interest is in optimizing the Company's financial success within the bounds of our legal and regulatory system. In its undertaking, the Board of Directors must also consider the interests of others, including customers, employees, regulators, elected officials, and the communities where the Company does business. The Board recognizes that these responsibilities can be best met through a sound corporate governance philosophy and through policies and practices that maximize the Board's focus and overall effectiveness.

The first principle embraced by the Board of Progress Energy is integrity. This Board will nominate for director positions and include among its rank only those persons of the highest integrity and honesty. Similarly the Board will accept only managers that demonstrate the highest standard of behavior and ethical conduct.

The second principle of this Board is accountability. The Board recognizes that it represents the interests of shareholders and expects that it will be held accountable for doing so. The Board also holds management accountable for producing results that serve the shareholders' interests.

The third principle is independence. The board believes that it can only meet its obligations if it can exercise free and independent judgment, unclouded by economic or other entanglements with the Company. The Board will ensure that a substantial majority of its members are independent from the Company and will operate with due independence.

The Board is committed to these principles and has adopted a set of governance measures structured around them. These Corporate Governance Guidelines document the Board's responsibilities, structure and internal practices. The Corporate Governance Committee shall review these guidelines on a regular basis and make recommendations to the Board on items that will improve its governance.

View the complete set of guidelines below:

Corporate Governance Guidelines
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Director Independence

The Progress Energy board of directors (board) believes that it can best meet its obligations if it can exercise free and independent judgment, unclouded by economic or other entanglements with the company. The board will ensure that at least 80 percent of its members meet the independence requirements of the New York Stock Exchange. The board also considers whether other kinds of relationships, such as close personal relationships between potential board members and senior management, may affect a director’s actual or perceived independence.

The board believes that independence and candid discussion can be fostered by meeting in executive session without company employees present. The board’s policy is that the non-employee directors will meet in executive session on a regularly scheduled basis. Executive sessions will be chaired by either the chairman (if not an employee) or the lead director, who is the chairman of the Corporate Governance Committee. The lead director currently chairs the executive sessions, and he can be contacted by writing to:

John H. Mullin III
Lead Director
Progress Energy Board of Directors
c/o Corporate Secretary
P.O. Box 1551
Raleigh, NC 27602