Corporate Governance

Labopharm believes that sound corporate governance is essential to the creation and maintenance of sustainable, long-term shareholder value and the Company adheres to best practices in this regard. In accordance with the requirements of the Toronto Stock Exchange Corporate Governance Guidelines (the “TSX Guidelines”), Labopharm’s Board of Directors initially adopted internal corporate governance guidelines in 1997.

Since then, the Company has regularly reviewed its corporate governance guidelines and practices and where appropriate, has implemented changes in strict accordance with the TSX Guidelines and with new US regulations such as Sarbanes-Oxley, deviating only in areas where it was impractical to adopt them fully given the Company’s current stage of development. Labopharm believes it maintains a proactive approach and considers that its corporate governance practices meet or surpass the prevailing corporate governance standards.

Labopharm’s Board of Directors is also committed to meeting the needs of the capital markets and regulatory authorities by modifying its rules on an as-needed basis. The Company intends to regularly review and amend its practices to ensure they remain consistent with relevant guidelines and corporate governance best practices. As a result, new procedures may be implemented throughout the year(s). The Board of Directors will reassess the Company’s corporate governance practices and implement changes where appropriate.

The overall structure and operating methods of the Board of Directors and its committees are discussed in the Management Proxy Circular.

• Audit Committee Pre-approval Policy for Audit and Non-Audit Services
• Code of Ethics and Business Conduct
• Corporate Governance Rules (including the Board of Directors, the Compensation Committee, the Corporate Governance Committee and the Audit Committee)
• Mandate of the Chairman of the Board
• Mandate of the Chair of a Committee
• Mandate of the President and Chief Executive Officer
• Policy Governing Director Nominations, Shareholder-Board Communications and Director Attendance at Meetings
• Disclosure and Confidentiality Policy
• Whistle-Blowing Policy
• Trading Policy