Guidelines

The Board of Directors of Brown-Forman Corporation (the "Company") has adopted these Corporate Governance Guidelines to assist the Board in the exercise of its duties and responsibilities and to serve the best interests of the Company and its stockholders. The Guidelines should be applied in a manner consistent with all applicable laws, regulations and listing requirements, as well as the Company's Certificate of Incorporation and By-Laws. The Guidelines provide a framework for the conduct of the Board's business.

Corporate Governance Guidelines Quicklinks


Responsibilities of the Board of Directors

The Board of Directors has the ultimate responsibility for the financial well-being of the Company and its business success. The Board of Directors is a policy-making body that acts primarily through Company management, whose officers and employees conduct the business under strategies that management develops and proposes, and which the Board approves and oversees. The Board of Directors, acting directly or through duly constituted committees, shall have the following responsibilities.

1. Engage and oversee competent management to run the Company.

2. Ensure that management proposes and the Board approves appropriate business strategies.

3. Monitor the implementation of business strategies by management and encourage change if that is warranted.

4. Oversee the Company's overall financial condition, review and approve the Company's annual operating and capital plans, approve major acquisitions, divestitures and capital expenditures and monitor the health of the company's brands.

5. Assess the Company's culture to insure that the Board and management embody the Company's core values of integrity, respect, trust, excellence and teamwork.

6. Ensure management is providing sufficient and appropriate information to the Board to enable the Board to fulfill its responsibilities.

7. Review major opportunities and problems facing the Company and review options for addressing them.

8. Ensure processes are in place for maintaining the integrity of the Company, including the accuracy and completeness of its financial statements, the effectiveness of the Company's internal controls, the integrity of the Company's compliance with law and ethics, and the integrity of its relationships with its stakeholders.

9. Retain the Chairman and the CEO, evaluate his, her or their performance and authorize his, her or their compensation.

10. Plan for the succession of the Chairman and the CEO and periodically evaluate other senior leadership of the Company.

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Election of Directors

All directors are elected annually to one-year terms. Directors serve at the pleasure of the shareholders. Directors should not expect to be automatically renominated.

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Size of the Board

The By-laws provide that the Board shall consist of not less than three nor more than seventeen directors. The Board currently has thirteen directors and has been about that size or less for a number of years. The Company has had good experience with a Board of about that size, as it promotes good discussion and decision making, where a much larger Board might be unwieldy and a much smaller Board less inclusive of a range of opinions.

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Director Qualifications

Independence. The Board of Directors has determined that Brown-Forman is a "controlled company" and therefore it would be inappropriate to mandate a majority of independent directors. However, the Board clearly benefits from the presence of independent directors. The Board Audit and Compensation Committees shall consist solely of independent directors. For purposes of these Guidelines, the term "independent" shall be interpreted by the Board to meet at least the independence standards of the New York Stock Exchange and any applicable laws, rules and regulations. The Board shall undertake an annual review of the independence of each director. Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as independent.

Director Qualifications. As a general matter, the Company seeks directors who will represent the best long-term interests of the Company's stockholders. Directors should have an attitude that is positive and growth-oriented. Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of all stockholders. Additional factors to be considered include judgment, skill, independence, civility, business courage, the lack of possible conflicts of interest, experience with businesses and other organizations of comparable size or character, the interplay of the candidate's experience and approach to addressing business issues with the experience and approach of incumbent directors and other new director candidates. The Company's goal in selecting directors for nomination to the Board of Directors is generally to seek a well-balanced membership that combines a variety of experience, background, skill and intellect in order to enable the Company to pursue its strategic objectives. Historical experience has shown that it is useful for the Board to have at least two management directors.

It is useful and necessary for the Board to have Brown family Board members as directors, as collectively the Brown family owns a majority of the voting stock of the Company. As with all other directors, Brown family members should represent the best interests of all shareholders, including non-family shareholders.

In addition, family directors should evidence a strong interest in Brown-Forman Corporation and its long-range health and prosperity. They should be willing and able ambassadors to other family members, helping to ensure that family shareholders understand the Company's business and strategies.

While not every family director, nor indeed any director, will have all of the qualities that make an "ideal" director, a director should supplement the existing talent pool within the Board and help make the Board a well-balanced and functioning institution.

Historically, the company has not had term limits for directors, but has had mandatory retirement policies for directors, the current one providing that directors may serve through their 70th year. Directors are normally expected to retire when they reach age 71. However, the Board can request a director to remain on the Board past that age, through his or her's 72nd year, or until a given date, if it finds that such service is of significant benefit to the corporation. Such extended service requires a special vote by the Board, with two-thirds of directors approving, without the vote or participation in discussion of the affected director.

The Board shall conduct an annual self-evaluation of its performance.

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Board Meetings

Conduct of Meetings. Meetings are chaired by the Chairman. All directors are invited to participate in discussions where their counsel will benefit the Board. Decisions are by majority vote, except on matters where the By-laws require a higher affirmative vote.

Number of Meetings. The Board of Directors of the Company meets at six regularly scheduled meetings each year. The Board also meets on other occasions, in person or by telephone, at special meetings as needed. In the recent past there have been at least one or two such special meetings each year.

Meetings of the Non-Management and Independent Directors. In accordance with the rules of the New York Stock Exchange, there is at least one regularly scheduled meeting of the non-management directors, and one meeting of the independent directors, each presided over by the director they choose. The method of selecting the director to preside at these meetings is by the majority vote of the directors attending.

Meeting Materials. Information and materials that are important to the directors' understanding of the business to be conducted at Board and Committee meetings or that will facilitate the Board's or a Committee's discussion are generally distributed in advance of those meetings. Directors are expected to review these materials in preparation for the meeting. The Board understands that certain items to be discussed at Board or Committee meetings may be extremely confidential or time-sensitive and that distribution of materials relating to these matters prior to meetings may not be appropriate or practicable.

Meeting Attendance. Absent an appropriate reason, attendance is expected for the full meeting by all directors at the Company's Annual Meeting of Stockholders, at all meetings of the Boards of Directors of the Company and at all meetings of each Committee of which a director is a member.

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Board Committees

The purpose of the Committees of the Board of Directors is to help the Board to fulfill its responsibilities effectively and efficiently, although the Committees do not displace the oversight responsibilities of the Board as a whole. Committees consist of Board members but may have other, non-voting members, such as a Committee secretary.

The Board has established four principal standing Committees of the Board:

1. Audit Committee. The Audit Committee has the responsibilities set forth in its Charter with respect to: the quality and integrity of the Company's financial statements; the Company's compliance with legal and regulatory requirements; the Company's guidelines and policies to monitor and control its major financial risk exposures; the qualifications, independence and retention of the independent auditor; the performance of the Company's internal audit function and independent auditors; overseeing the Company's Corporate Compliance Program, and other issues related to Company and employee ethics; and preparing the annual Report of the Audit Committee to be included in the Company's proxy statement.

2. Compensation Committee. The Compensation Committee has the responsibilities set forth in its Charter with respect to: reviewing and evaluating the performance of the Chairman and the Chief Executive Officers and such other executive officers as the Board may direct; setting the compensation and bonus goals for the Chairman and the Chief Executive Officers and other executive officers for which it has responsibility under the Company's compensation plans; and preparing an annual report on executive compensation for inclusion in the Company's proxy statement.

3. Executive Committee. Except as otherwise required by law, rule, regulation or By-laws of the Company, the Executive Committee may exercise all of the powers of the Board of Directors over the management and control of the business of the Company during intervals between meetings of the Board of Directors. Traditionally, the Executive Committee has acted only when (a) exercising a power previously conferred by the Board; (b) there was an emergency; or (c) the action was merely pro forma, and did not warrant the attention of the full Board. This statement of historical practice, however, is not intended as a limitation on the Executive Committee's power. Further, it should be clarified that these references are to the Executive Committee of the Board of Directors, which is separate from management executive committees that exist from time-to-time.

4. Nominating Committee. The Nominating Committee identifies, recruits and recommends to the Board qualified candidates to serve on the company's Board of Directors. The Committee's recommendations are subject to approval by the Board of Directors and ultimately the vote of the shareholders at the next annual stockholders' meeting.

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Board Compensation

The Company annually reviews director compensation in comparison to compensation paid to directors at other similarly situated companies. The Company makes recommendations to the Board of Directors. The Board of Directors shall take the Company's recommendations into consideration but the ultimate responsibility for setting director compensation rests with the Board. Board compensation may be paid in cash and equity interests in the Company, and may consist of annual retainers, meeting fees and such other components as appropriate. Separate compensation is provided for service on Board Committees and to chairpersons of Board Committees. (Directors are also reimbursed for their expenses in attending Board and Committee meetings.) In making its recommendations on director compensation, the Company should consider the following goals:

1. Directors should be fairly compensated for the work involved in overseeing the management of a company the size and scope of the Company;

2. Director compensation should be competitive with director compensation at other U.S. companies with the size and scope of the Company; and

3. Director compensation should align Board members' interests with the long-term interests of the Company's stockholders.

Directors who are also employees of the Company shall not receive any additional compensation for their service as Directors.

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Director Orientation and Continuing Education

The Company will arrange for new directors to meet with senior managers of the Company in order for the new director to become familiar with the Company's strategic plans, financial statements, brands, property and people. This orientation should begin as soon as practicable after the new director is elected, and should be completed within one year after the new director joins the Board. From time to time, the Company will provide Board members with presentations from Company and/or third party experts on topics that will assist Board members in carrying out their responsibilities. In addition, periodically the Board of Directors may visit a facility of one of its operating companies.

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Board Access to Management and Independent Advisors

Directors have full access to the officers of the Company. Management directors have the responsibility to see that there is regular interaction between Company personnel and the Board of Directors. This can take several forms. First, officers and employees appear from time to time before the Board in regular session to report on the business or request Board action. Second, there are informal meetings, usually in connection with a scheduled Board meeting, so that directors can meet with a variety of different officers and employees.

Members of the Compensation Committee have free and unimpeded access to members of the Human Resources Department for purposes of obtaining information relating to executive compensation.

Members of the Audit Committee have free and unimpeded access to members of the Finance Department, including the Chief Financial Officer, and the General Auditor, the Legal Department, including the General Counsel, and the Disclosure Controls Committee to obtain information relating to their review of the Company's financial reporting and disclosure practices.

Non-management directors seeking additional access to management outside of the channels indicated above shall arrange such access through the CEO or his or her designees. Directors shall use their best judgment to ensure that such meetings do not interfere with business or inadvertently create the impression that the employee should take instructions from the director. Directors collectively engage management to run the Company's business and individual directors should respect that decision by not by-passing the normal chain of command.

The Board of Directors or any of its Committees may retain and terminate such independent advisors, including attorneys, accountants, investment bankers and other consultants, as it deems necessary or appropriate to the performance of its duties from time to time. The Board or Committee, as the case may be, shall have the sole authority to approve the fees and other retention terms of such independent advisors.

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Management Succession

The Chairman and the Chief Executive Officer will periodically review with the Compensation Committee the succession plan for the most senior positions of the Company. When appropriate, these plans will be reviewed with the whole Board, with any effected people being excused from that portion of the meeting.

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Annual Performance Evaluation of the Board

The Board of Directors will annually review the performance of the Board and such other corporate governance matters as the directors may determine. It is a collective responsibility of the Board to see that all Board members (a) contribute to the success of the Company and its long-term well-being; (b) have a continuing interest in the Company's business; and (c) act in the best interests of the Company's shareholders.

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Effect of Corporate Governance Guidelines

These Corporate Governance Guidelines are intended as one of the components of the flexible framework within which the Board of Directors and its Committees direct and oversee the affairs of the Company. While these Guidelines should be interpreted in the context of applicable laws, regulations and listing requirements, as well as in the context of the Company's Certificate of Incorporation and By-Laws, they are not intended to establish by their own force any legally binding obligations.

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Amendment of Corporate Governance Guidelines

The Board may amend, modify or make exceptions to these Guidelines from time to time in its discretion and consistent with its duties and responsibilities to the Company and its stockholders.

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Publication of Corporate Governance Guidelines

Consistent with New York Stock Exchange listing requirements, these Corporate Governance Guidelines are posted on the Company's website. The Company's annual report to stockholders will state that this Charter is available on the Company's website and is available upon request in writing sent to the Secretary of the Company.

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Corporate Governance Guidelines