Role of the Board
Board Structure
Board Functions
Committee Structure
Compensation
Communications with the Directors

Philosophy

The Board of Directors is elected by the shareholders to govern the affairs of the Company for the long-term benefit of its shareholders. The Board also considers, when appropriate, the interests of other constituencies including the Company’s employees, customers, suppliers and the communities in which it does business. The Board strives to promote the success of the Company’s business through the election of qualified executive officers.

Ethics and Compliance Program

The Board is responsible for oversight of the Company’s ethics and compliance program. Under that program, employees are required to conduct the Company’s business in an ethical and lawful manner.

As part of the ethics and compliance program, the Company has established a code of conduct entitled “Our Values in Action.” It governs the way we treat our customers and each other, interact with our community, and strengthen our commitment to excellence and integrity. “Our Values in Action” provides guidance, discussion and training regarding the ethical expectations for BellSouth employees and other affected parties. The principles in the code reinforce our commitment to ethical business practices and to compliance with internal policies and external laws and regulations.

The Board of Directors has approved “Our Values in Action.” This code applies to our directors, officers and all of our employees, including our Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Controller. The code satisfies the Securities and Exchange Commission’s requirements for a code of ethics for senior financial officers. Any waiver of the code for a member of the Board of Directors or an executive officer would require the approval of the Audit Committee and would be promptly disclosed to our shareholders. No waivers have been requested or granted under the code. All employees are expected to report any situation where they believe ethical expectations, external laws or our internal policies are being violated. The full text of “Our Values in Action” can be found on our website at www.bellsouth.com/corporate_governance.

Independence

The Board believes that governance of the Company is enhanced by having a substantial majority of independent directors. To that end, all members of the Board are non-management directors, with the exception of the Chief Executive Officer and the President and Chief Operating Officer.

The Director Nominating and Corporate Governance Committee of the Board annually assesses the outside affiliations of each director to determine if any of these affiliations could cause a potential conflict of interest with BellSouth or could interfere with the independence of the director. Further, the Committee has established the criteria for independence set out below.

An independent director is one who:

• has never been an employee of BellSouth or any of its subsidiaries;
• is not an immediate family member of an executive officer or of a former executive officer of BellSouth or any of its subsidiaries;
• has not been employed, or whose immediate family member has not been employed, within the preceding three years, as an executive officer of another company where any of BellSouth’s present executives serve on that company’s compensation committee;
• has no personal interest in any significant transactions or business relationships with BellSouth that would create a conflict of interest;
• has not been employed by a company providing services to BellSouth of a nature or magnitude that would compromise the objectivity of the Board member,
  • A director will not be considered to meet this criteria if the director is an executive officer or an employee, or an immediate family member is an executive officer, of another company that has made payments to, or received payments from, BellSouth for property or services in an amount:
  1. that accounts for at least 2% or $1 million, whichever is greater, of BellSouth’s consolidated gross revenues, or
  2. for which BellSouth accounts for at least 2% or $1 million, whichever is greater, of such other company’s consolidated gross revenues, until three years after falling below such threshold;
• has not received any significant direct or indirect compensation or benefits from BellSouth other than that received for services as a director;
  • A director will be considered to receive significant compensation from BellSouth if the director receives, or the director’s immediate family member receives, more than $100,000 in any twelve month period in direct compensation from BellSouth, other than the compensation paid to directors generally (provided such compensation is not contingent in any way on continued service), until three years after he or she ceases to receive such compensation;
• is not, or an immediate family member is not, a current partner of a firm that is BellSouth's internal or external auditor; is not a current employee or such a firm; does not have an immediate family member who is a current employee of such a firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice; or has not been, or an immediate family member has not been, within the last three years (but is no longer) a partner or employee of such a firm and personally worked on BellSouth's audit within that time; and
• does not serve, or whose spouse does not serve, as an officer, director or trustee of a not-for-profit organization to which BellSouth has made charitable contributions which, in the aggregate, are greater than 2% or $1 million (whichever is greater) of that organization's total revenues for its last fiscal year. (BellSouth's matching of employee charitable contributions will not be included in determining the amount of BellSouth's contributions for this purpose.)

Additionally, Audit Committee members must not receive any compensation from BellSouth other than director’s fees and must not be affiliated persons of the Company, other than by virtue of their directorship.

Membership Criteria and Nomination Process

The Director Nominating and Corporate Governance Committee reviews and recommends nominees for membership on the Board. In discharging this responsibility, the Committee receives input from the Chairman of the Board, other Board members and the Committee's professional search firm. It also considers and evaluates any candidates recommended by shareholders.

It is the belief of the Board that its membership should bring to the Company a broad range of experience, knowledge and judgment. A candidate's breadth of experience should enable him or her to contribute meaningfully to the governance of a complex multi-billion dollar enterprise. The candidate should not represent the interests of particular constituencies. In reviewing a candidate, the Committee considers the integrity of the candidate, whether the candidate would be independent as defined in these Corporate Governance Principles and in the listing standards of the New York Stock Exchange. The Committee expects a high level of involvement from the directors and will review a candidate's service on other boards to assess whether the candidate has sufficient time to devote to BellSouth Board duties.

Shareholders who would like to recommend director candidates for consideration by the Director Nominating and Corporate Governance Committee should notify the Office of the Corporate Secretary in writing at BellSouth Corporation, Suite 19A01, 1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610. For a candidate to be considered for election at the annual meeting of shareholders, this notification must be received by the Company during the time period specified in BellSouth's By-laws and must provide information about the nominee's qualifications for Board membership and other information required by the By-laws. A copy of the By-laws is available on our website at www.bellsouth.com/corporate_governance.

Annual Election of Directors

The directors are elected each year by the shareholders at the annual meeting of shareholders.

The Director Nominating and Corporate Governance Committee reviews the performance, qualifications and independence of each director to be elected and determines whether to recommend each such director's re-election to the Board.

Size of Board

The Board presently has eleven members. The number of members is changed from time to time depending upon the needs of the Board and the availability of qualified candidates. Generally, the Board size should vary from nine to twelve members.

Frequency of Meetings and Attendance

The Board meets at least eight times per year. The Board expects directors to make every attempt to attend all Board meetings, meetings of Committees on which they serve, and annual meetings of shareholders.

Directors Who Change Jobs

Board members who change their primary business or profession in which they were engaged when elected to the Board should advise the Chairman of the Board and the Director Nominating and Corporate Governance Committee. The Committee will determine whether continued membership on the Board is appropriate. The Board believes that directors should not necessarily leave the Board upon a change in business or professional responsibilities. The Director Nominating and Corporate Governance Committee will consider such change in evaluating the appropriate mix of skills and experience necessary for the Board to perform its duties effectively.

Former Chief Executive Officer's Membership

The Board expects that no officer of the Company will serve as a member of the Board following retirement from the Company, except that any person who was Chief Executive Officer immediately prior to retirement may continue to serve as a director of the Company for one additional year following retirement.

Retirement Age

It is the sense of the Board that a director should not serve beyond the annual meeting following his or her 70^th birthday.

Lead Director

The non-management directors shall elect one director from among their membership as Lead Director. Responsibilities of the Lead Director shall include:

• Presiding over the executive session of the non-management directors;
• Coordinating the agenda for the executive sessions of non-management directors;
• Providing feedback to the Chairman and Chief Executive Officer on discussions in executive sessions;
• Reviewing and providing input to the agenda for each meeting of the Board of Directors;
• Providing advice and counsel to the Chairman and Chief Executive Officer; and
• Handling other duties as specified by the Board.

Agenda Items

The Chairman of the Board, the Lead Director, and the Corporate Secretary establish an annual calendar outlining the proposed agendas for Board meetings to be held during the year. The annual calendar is distributed to Board members in November for their review and input.

Prior to each Board meeting, the preliminary agenda is sent to the Board members for their review and further input. After receiving input from the Board, the Corporate Secretary, Chief Executive Officer and the Lead Director finalize the agenda.

Advance Distribution of Materials

The Board is generally provided with materials well in advance of each meeting for review and study. Members of management compile most of the material. Information from other sources such as comments from analysts or assessments from governance groups is also provided. Any other information deemed to be helpful by the directors can also be requested.

Strategic Planning

Each year, the Board conducts a multi-day strategic planning meeting at which members of management and the Board discuss the Company's strategic plan.

Access to Management

Directors have access to members of management at BellSouth at their discretion. Selected officers of the Company, e.g., the Chief Financial Officer, the Controller, the Corporate Secretary and the General Counsel, attend a portion of each Board meeting. Other executive officers and key personnel are invited to attend Board and Committee meetings when appropriate. The annual multi-day strategic planning meeting also affords the directors the opportunity to meet with other members of the management team, such as the leaders of the various Business Units.

Access to Outside Advisors

The Board and its Committees may engage independent consultants such as consultants regarding executive compensation matters or other advisors or consultants as they deem necessary to fulfill their duties to shareholders. They have the authority to approve the fees and retention term of independent consultants.

Executive Sessions of Non-Management Directors

The non-management directors meet in executive session during each Board meeting. Matters relating to compensation, succession planning, strategy and other more sensitive areas are discussed at these sessions. The Lead Director establishes the agenda and presides at the executive session. The Lead Director also provides feedback from the executive session to the Chief Executive Officer. The Board also meets in executive session at each Board meeting with the Chairman and Chief Executive Officer.

New Director Orientation and Continuing Education

All new Board members participate in a new director orientation program, which includes sessions with the Chief Executive Officer and other executive officers as well as background materials on BellSouth, its business plan and its risk profile.

Committee orientation is provided to new members of the Audit, the Director Nominating and Corporate Governance and the Executive Nominating and Compensation Committees.

With respect to continuing education, The Director Nominating and Corporate Governance Committee, as well as individual directors and the other Committees, recommends topics of interest to be presented as part of the continuing education program. Examples of these presentations are on topics such as: regulatory accounting; revenue recognition; regulatory and legislative issues and trends relevant to telecommunications; IT logical security; evolving technology; and transparency in financial reporting. Additionally, directors regularly receive publications related to Board service, analyst reviews, and relevant information.

Board Evaluation

The Director Nominating and Corporate Governance Committee is responsible for overseeing the annual evaluation process for the Board and for reporting the performance evaluation results to the Board. This evaluation includes a review of all standing Committees.

Chief Executive Officer Evaluation

The Executive Nominating and Compensation Committee performs an annual evaluation of the Chief Executive Officer's performance. The Committee Chair contacts each member of the Board to receive each member's input regarding the Chief Executive Officer's performance and reports the results of the evaluation to the full Board. The Executive Nominating and Compensation Committee uses its evaluation results to determine the compensation for the Chief Executive Officer. It considers the Company's performance, the relative total shareholder return, the value of similar incentive awards to Chief Executive Officers of comparable companies, the awards given to the Chief Executive Officer in past years, and other criteria deemed appropriate by the Committee. The Committee also receives advice from its compensation consultant. The Committee Chair discusses the Chief Executive Officer's compensation with the non-management directors before and after approval by the Committee.

Succession Planning

The Executive Nominating and Compensation Committee, in consultation with the Chief Executive Officer, oversees the Company's succession plans for executive officers. The Committee and the Chief Executive Officer discuss these succession plans with the Board. The Executive Nominating and Compensation Committee recommends candidates for executive officer positions for election by the Board.

Number of Committees

The Board currently has the following six Committees: Audit; Director Nominating and Corporate Governance; Executive; Executive Nominating and Compensation; Finance/Strategic Planning; and Public Policy. The Board reviews the charter of each Committee annually to evaluate the responsibilities of the Committee in accordance with current laws and regulations and consistency with established governance practices.

Frequency of Meetings

Generally, the Audit, Executive Nominating and Compensation, and Finance/Strategic Planning Committees meet in conjunction with the regularly scheduled meetings of the full Board. The Audit Committee meets more frequently as required to oversee the certifications by the Chief Executive Officer and Chief Financial Officer of the periodic financial statements. The Director Nominating and Corporate Governance Committee meets three times a year and the Public Policy Committee meets biannually. Additional meetings of the Board and its Committees are held if circumstances create the need for such special meetings. The Executive Committee meets only when called by the Chairman of the Board or by two other members of the Executive Committee.

Agenda Items

The Committee members and the Secretary of each Committee establish an annual calendar outlining the proposed agendas for Committee meetings to be held during the year. Prior to each meeting, the Committee Chair and the Committee Secretary review the agenda to make necessary revisions to meet current business needs and to incorporate input from the directors.

Review

The Director Nominating and Corporate Governance Committee reviews director compensation at least every two years, or at such other time as circumstances may warrant.

Stock Ownership

Mandatory stock ownership guidelines have been established for the directors to better align their interests with those of the shareholders. Directors are required to own shares of BellSouth stock with a value of at least three times the annual retainer paid to directors. New directors should meet this requirement within three years of joining the Board.

Procedures for Handling Shareholder and Other Communications to the Non-Management Directors

The non-management members of the Board of Directors have instructed the Corporate Secretary's office to initially review all communications directed to them. Communications such as the following (which are not relevant to the duties and responsibilities of the Board) are not reported to the Board:

• Spam;
• Junk mail and mass mailings;
• Product or service inquiries;
• New product or service suggestions;
• Resumes or other forms of job inquiries;
• Opinion surveys and polls; and
• Business solicitations or advertisements.

Procedures for Handling Communications Regarding Accounting, Internal Accounting Controls or Auditing Matters

Any communications related to BellSouth's accounting, internal accounting controls or auditing matters will be referred to the Audit Committee. The Chair of the Audit Committee would be advised promptly of any allegations pertaining to a serious accounting infraction involving senior managers of the Company or any other potentially material complaint. Any such matters would then be investigated as directed by the Audit Committee. Results of such investigations would be reported to the Board.

Contact Our Directors

Shareholders and other interested parties who wish to communicate with the Company’s non-management directors may direct correspondence to a particular director, or to the non-management directors as a group, by e-mail at Feedback.Directors@BellSouth.com or by addressing written correspondence to the Office of the Corporate Secretary, BellSouth Corporation, Suite 19A01, 1155 Peachtree Street, N.E., Atlanta, GA 30309-3610.

As amended by the Board of Directors on February 27, 2006.