Overseeing Business Conduct and Management
The Board of Directors (the "Board") of ARC Resources Ltd. (the "Corporation") is responsible for the stewardship of the Corporation, the other subsidiaries of ARC Energy Trust and ARC Energy Trust to the extent delegated to the Corporation under the Trust Indenture (together, "ARC"). In discharging its responsibility, the Board will exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances and will act honestly and in good faith with a view to the best interests of ARC. In general terms, the Board will:

(a)    in consultation with management of the Corporation, define the principal objectives of ARC;

(b)    monitor the management of the business and affairs of ARC with the goal of achieving ARC's principal objectives as defined by the Board;

(c)    discharge the duties imposed on the Board by applicable laws; and

(d)    for the purpose of carrying out the foregoing responsibilities, take all such actions as the Board deems necessary or appropriate.

Without limiting the generality of the foregoing, the Board will perform the following duties.

Strategic Operating, Capital Plans and Financing Plans

• require the Chief Executive Officer (the "CEO") to present annually to the Board a longer range strategic plan and a shorter range business plan for ARC's business, which plans must:

• be designed to achieve ARC's principal objectives,
• identify the principal strategic and operational opportunities and risks of ARC's business,
• be approved by the Board as a pre-condition to the implementation of such plans;

• review progress towards the achievement of the goals established in the strategic, operating and capital plans;
• identify the principal risks of the ARC's business and take all reasonable steps to ensure the implementation of the appropriate systems to manage these risks;
• approve the annual operating and capital plans;
• approve acquisitions and dispositions in excess of $25 million and all acquisitions outside of the conventional oil and gas industry, regardless of size;
• approve the establishment of credit facilities; and
• approve issuances of additional Trust units or other instruments to the public.

Monitoring and Acting

• monitor ARC's progress towards its goals, and to revise and alter its direction through management in light of changing circumstances;
• monitor overall human resource policies and procedures, including compensation and succession planning;
• appoint the CEO and determine the terms of the CEO's employment with ARC;
• approve the distribution policy of ARC;
• ensure systems are in place for the implementation and integrity of ARC's internal control and management information systems;
• monitor the "good corporate citizenship" of ARC, including compliance by ARC with all applicable safety, health and environmental laws;
• in consultation with the CEO, establish the ethical standards to be observed by all officers and employees of ARC and use reasonable efforts to ensure that a process is in place to monitor compliance with those standards;
• require that the CEO institute and monitor processes and systems designed to ensure compliance with applicable laws by ARC and its officers and employees; and
• approve all matters relating to a takeover bid of ARC.

Compliance Reporting and Corporate Communications

• ensure that the financial performance of ARC is properly reported to unitholders, other security holders and regulators on a timely and regular basis;
• recommend to unitholders of ARC a firm of chartered accountants to be appointed as ARC's auditors;
• ensure that the financial results are reported fairly and in accordance with generally accepted accounting principles;
• ensure the timely reporting of any change in the business, operations or capital of ARC that would reasonably be expected to have a significant effect on the market price or value of the Trust Units of ARC;
• ensure the corporate oil and gas reserve report fairly represents the quantity and value of corporate reserves in accordance with generally accepted engineering principles;
• report annually to unitholders on the Board's stewardship for the preceding year; and
• establish a process for direct communications with unitholders and other stakeholders through appropriate directors, including through the whistleblower policy; and
• ensure that ARC has in place a policy to enable ARC to communicate effectively with its unitholders and the public generally.

Governance

• in consultation with the Chairman of the Board, develop a position description for the Chairman of the Board;
• facilitate the continuity, effectiveness and independence of the Board by, amongst other things:

• appointing a Chairman of the Board who is not a member of management;
• appointing from amongst the directors an audit committee and such other committees of the Board as the Board deems appropriate,
• defining the mandate of each committee of the Board and the terms of reference for the chair of each committee,
• ensuring that processes are in place and are utilized to assess the effectiveness of the Chairman of the Board, the Board as a whole, each director, each committee of the Board and its chair, and
• establishing a system to enable any director to engage an outside adviser at the expense of ARC; and

• review annually the composition of the Board and its committees and assess Directors' performance on an ongoing basis, and propose new members to the Board; and
• review annually the adequacy and form of the compensation of directors.

Delegation

• The Board may delegate its duties to and receive reports and recommendations from the Audit, Reserves, Human Resources and Compensation, Health, Safety and Environmental and Policy and Board Governance committees.

Composition

• The Board shall be composed of at least seven individuals appointed by the unitholders at the Annual Meeting.
• A majority of Board members should be independent Directors (within the meaning of section 1.4 of Multilateral Instrument 52-110) and free from any direct or indirect material relationship, being one that could, in the view of the Board of Directors, reasonably interfere with the exercise of the member's independent judgment.
• Members should have or obtain sufficient knowledge of ARC and the oil and gas business to assist in providing advice and counsel on relevant issues.
• Member shall review available materials in advance of meetings and endeavor to attend all meetings of the Board and its committees.
• Board members should offer their resignation from the Board to the Chairman of the Policy and Board Governance Committee following:

• change in personal circumstances which would reasonably interfere with the ability to serve as a Director, including a conflict of interest,
• change in personal circumstances which would reasonably reflect poorly on the Trust (for example, finding by a Court of fraud, or conviction under Criminal Code or securities legislation); and
• change in position or occupation of a Board member who was appointed or nominated for election to the Board on the basis of such member holding such position or occupation.

• Board members should offer their resignation from the Board to the Chairman of the Policy and Board Governance Committee upon reaching age 65 and annually thereafter.

Meetings

• The Board shall meet at least four times per year and/or as deemed appropriate by the Board Chair.
• The Board shall meet at the end of its regular quarterly meetings without members of management being present.
• Minutes of each meeting shall be prepared by the Secretary to the Board.
• The Chief Executive Officer shall be available to attend all meetings of the Board upon invitation by the Board.
• Vice-Presidents and such other staff as appropriate to provide information to the Board shall attend meetings at the invitation of the Board.

Reporting / Authority

• Following each meeting, the Secretary will promptly report to the Board by way of providing draft copies of the minutes of the meetings.
• Supporting schedules and information reviewed by the Board at any meeting shall be available for examination by any Director upon request to the Chief Executive Officer.
• The Board shall have the authority to review any corporate report or material and to investigate activity of the Trust and to request any employees to cooperate as requested by the Board.
• The Board may retain persons having special expertise and/or obtain independent professional advice to assist in fulfilling its responsibilities at the expense of ARC.