1. Board Membership Criteria.

The Public Policy and Corporate Governance Committee is responsible for reviewing with the Board, at least annually, the appropriate skills and experience required of Board members. This assessment will include factors such as judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate's experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board.

2. Selection of Directors and Other Board Memberships.

The Public Policy and Corporate Governance Committee, with input from the Chairman and Chief Executive Officer, screens director candidates, including those recommended by shareholders. The Public Policy and Corporate Governance Committee also reviews the nomination of incumbent Directors for re-election to the Board upon expiration of such Director's term. The Board recommends to shareholders qualified individuals who, if added to the Board, would provide the mix of director characteristics and diverse experiences, perspectives and skills most appropriate for the Corporation. The invitation to join the Board should be extended by the Board through the Chairman. A director candidate should demonstrate a willingness and ability to prepare for, attend and participate in all Board and Committee meetings, without excessive competing time commitments to other companies or boards. Non-management Directors are encouraged to limit the number of public, private and not-for-profit boards on which they serve, taking into account potential board attendance, participation and effectiveness on these boards. Non-management Directors should advise the Chief Executive Officer and the Chairperson of the Public Policy and Corporate Governance Committee of any invitation to serve on another board in advance of accepting the invitation to serve on another board.

The Public Policy and Corporate Governance Committee is responsible for succession planning for the Board, including appropriate contingencies in case the Chairman retires, resigns or is incapacitated. The Committee will assist the Board in evaluating potential successors to the Chairman.

3. Director Resignation Upon Failed Election.

In accordance with the By-laws of the Corporation, in an Uncontested Election (as defined in the Corporation's By-laws), a nominee must receive more votes cast "FOR" than "AGAINST" his or her election or re-election in order to be elected or re-elected to the Board. To the extent permitted by law, the Board expects a Director to tender his or her resignation if he or she fails to receive the required number of votes for re-election. The Board shall nominate for election or re-election as Directors only candidates who agree to tender, promptly, following the annual meeting at which they are elected or re-elected as Director, irrevocable resignations in the form set forth on Exhibit B hereto that will be effective ninety (90) days after the date of the certification of the election results. In addition, the Board shall fill Director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other Directors in accordance with this governance policy.

4. Director Orientation and Continuing Education.

New Directors will participate in an orientation program, including discussions with key executives. All Directors are invited to participate in the orientation program. Periodically, the Corporation will provide opportunities for directors to visit the Corporation's significant facilities in order to provide greater understanding of the Corporation's business.

5. Ownership of Corporation Stock.

The Board of Directors believes ownership of shares of the Corporation's common stock by its officers and Directors serves the best interests of the Corporation by promoting efficiency and dedication and by providing additional incentive.

The policy of the Corporation with regard to such ownership is as follows:

The Corporation encourages its officers and Directors to invest in shares of the Corporation's common stock. The Corporation maintains a requirement that all Directors receive at least onehalf of their Annual Retainer in the Corporation's common stock or common stock equivalent units. This policy does not apply to Directors owning HNI Corporation common stock with a market value of five times or more of the Annual Retainer. Board members may accumulate common stock of the Corporation in the following ways:

1. through open market purchases;
2. by electing to take all or a portion of their compensation as Directors in the form of common stock; and
3. through grants of stock and stock options, as determined by the Board from time to time, under the Corporation's equity plan for non-employee Directors.

All purchases and sales of the Corporation's common stock by Directors will comply with all rules and regulations of the Securities and Exchange Commission relating to "insider trading."

The Board expects that Directors' investments in shares of common stock of the Corporation should be primarily for long-term appreciation, and active trading of the Corporation's stock by such individuals is discouraged.

6. Director's Change in Professional Status.

A non-employee Director will notify the Board, and offer to submit his or her resignation from the Board, in the form set forth on Exhibit C hereto, if there is a substantial change in the Director's business, employment or professional position or title. Any Director who is an employee of the Corporation shall submit his or her resignation from the Board upon retirement, resignation or termination of employment. The Board may accept or reject such resignation in its discretion after consultation with the Public Policy and Corporate Governance Committee.

7. Director Compensation and Expense Reimbursement.

The Corporation will prepare each year a report for review by the Public Policy and Corporate Governance Committee comparing HNI Corporation Board compensation to director compensation of peer companies. The Committee will recommend to the Board what changes, if any, in Director compensation are warranted. Any changes in Director compensation will be reviewed and approved by the Board.

Directors will be reimbursed for the expenses they incur while traveling related to their service on the Board. Any changes in the reimbursement policy will be recommended by the Public Policy and Corporate Governance Committee and reviewed and approved by the Board.

A director who is also an officer of the Corporation will not receive additional compensation for service as a director.

8. Transactions with Directors and their Affiliates.

Except for employment with the Chairman, the Chief Executive Officer and the President, the Corporation does not engage in transactions with Directors or their affiliates if a transaction would cast into doubt the independence of a Director, present the appearance of a conflict of interest, or is otherwise prohibited by law, rule or regulation. This includes, directly or indirectly, any extension, maintenance or renewal of an extension of credit to any Director or member of management of the Corporation. Any waiver of this policy for executive officers and Directors may be made only by the Board or a Board Committee and must be promptly disclosed to the Corporation's stockholders.

9. Attendance of Non-directors at Meetings.

Senior members of management recommended by the Chief Executive Officer may attend Board meetings or portions thereof to participate in discussions and/or presentations. The Chief Financial Officer and General Counsel and Secretary should attend all Board meetings, except meetings, or portions of meetings, held in executive session.