Board selection and composition

• Board selection
• Board membership criteria
• Board independence
• Board leadership
• Presiding Director
• Size of the Board; Classes of Directors
• Board orientation and continuing education
• Stock ownership
• Continuation of service
• Resignation for majority withhold vote

Board selection
The Board is responsible for selecting candidates for election as Directors based on the recommendation of the Nominating and Governance Committee.

Board membership criteria
The responsibilities of the Nominating and Governance Committee include reviewing with the Board from time to time the appropriate skills and characteristics required of Board members in the context of the make-up of the Board and developing criteria for identifying and evaluating candidates for the Board. These criteria include, among other things, an individual's business experience and skills (including skills in core areas such as operations, management, technology, healthcare industry knowledge, accounting and finance, leadership, strategic planning and international markets), independence, judgment, integrity and ability to commit sufficient time and attention to the activities of the Board, as well as the absence of any potential conflicts with the Company's interests. The Nominating and Governance Committee considers these criteria in the context of an assessment of the perceived needs of the Board as a whole and seeks to achieve diversity of occupational and personal backgrounds on the Board.

Board independence
A majority of the Board must be comprised of Directors who meet the New York Stock Exchange definition of "independence," as determined by the Board. Under standards that the Board has adopted to assist it in assessing independence, the Board defines an "independent Director" to be a Director who:

• is not and has not been during the last three years an employee of, and whose immediate family member is not and has not been during the last three years an executive officer of, the Company(provided however, that, in accordance with New York Stock Exchange listing standards, service as an interim executive officer, by itself, does not disqualify a director from being considered independent under this test following the conclusion of that service)
• has not received, and whose immediate family member has not received other than for service as an employee (who is not an executive officer), more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), in any 12-month period during the last three years (provided however, that, in accordance with New York Stock Exchange listing standards, compensation received by a director for former service as an interim executive officer need not be considered in determining independence under this test)
• (a) is not, and whose immediate family member is not, a current partner of the Company's internal or external auditor; (b) is not a current employee of the Company's internal or external auditor; (c) does not have an immediate family member who is a current employee of the Company's internal or external auditor participating in the firm's audit, assurance or tax compliance (but not tax planning) practice; and (d) was not during the last three years, and whose immediate family member was not during the last three years, a partner or employee of the Company's internal or external auditor who personally worked on the Company's audit within that time
• is not and has not been during the last three years employed, and whose immediate family member is not and has not been during the last three years employed, as an executive officer of another company during a time when any of the Company's present executive officers serve on that other company's compensation committee
• is not, and whose immediate family member is not, serving as a paid consultant or advisor to the Company or to any executive officer of the Company, or a party to a personal services contract with the Company or with any executive officer of the Company
• is not a current employee of, and whose immediate family member is not a current executive officer of, a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 1% of such other company's consolidated gross revenues
• is not, and whose spouse is not, an executive officer of a non-profit organization to which the Company or the Company foundation has made contributions during the past three years that, in any single fiscal year, exceeded the greater of $1 million or 1% of the non-profit organization's consolidated gross revenues (Amounts that the Company contributes under matching gifts programs are not included in the contributions calculated for purposes of this standard)
• has no other material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company)

The Board assesses on a regular basis and at least annually the independence of Directors and, based on the recommendation of the Nominating and Governance Committee, makes a determination as to which members are independent. References to the "Company" above would include any subsidiary in a consolidated group with Cardinal Health. The terms "immediate family member" and "executive officer" above have the same meaning specified for such terms in the New York Stock Exchange listing standards.

In addition to the independence standards applicable to Directors generally, Audit Committee members may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from the Company, other than director fees and any regular benefits that other Directors receive for services on the Board or Board Committees. In addition, no Audit Committee member can be an affiliated person of the Company.

Board leadership
The Board is responsible for the selection of the Chairman of the Board and the Chief Executive Officer.

Presiding Director
An independent Director selected annually by the remaining independent Directors will preside at meetings of the non-management and independent Directors, and will serve as the Presiding Director in performing such other functions as the Board may direct, including advising on the selection of Committee Chairs and advising management on the agenda for Board meetings.

Size of the Board; classes of Directors
Under the Company's Restated Code of Regulations, the number of the Directors in no case shall be fewer than nine (9) or more than sixteen (16).

As a result of an amendment to the Company's Restated Code of Regulations, approved by the Company's shareholders on November 2, 2005, beginning with the Company's 2006 Annual Meeting of Shareholders, Directors who stand for re-election will be elected to a term expiring at the next Annual Meeting of Shareholders. At the Company's 2008 Annual Meeting of Shareholders, the Board will be de-classified and all Directors will be subject to election for terms expiring at the next Annual Meeting of Shareholders.

Board orientation and continuing education
A thorough understanding of the Company's business is required to enable a Director to make a substantial contribution to the Board. Accordingly, all new Directors participate in an orientation program developed by the Company after their election to the Board. The orientation will include presentations by senior management to familiarize new Directors with the Company's strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its code of business conduct and ethics, its principal officers, and its internal and independent auditors. Directors are encouraged to participate in continuing education developed by the Company or programs provided by outside sources. Directors endeavor to meet at key Company locations from time to time to conduct in-depth reviews of particular segments of the Company's operations.

Stock ownership
Under the Cardinal Health Guidelines for Stock Ownership adopted by the Board of Directors, each non-management Director must own an equity interest in the Company in accordance with the Company's share ownership guidelines then in effect.

Continuation of service

• Re-Nomination. The Nominating and Governance Committee assesses the contributions and independence of Directors on an annual basis in accordance with the criteria set forth in the committee's charter to determine whether these Directors should be requested to stand for reelection and continue service on the Board.
• Term Limits. The Board does not believe it should establish term limits. While term limits can make fresh ideas and viewpoints available to the Board, term limits can also result in the loss of Directors who have been able to develop, over a period of time, an increasing insight into the Company and its operations. As an alternative to term limits, the Nominating and Governance Committee will review each Director's continuation on the Board when he or she is considered for re-nomination. This will also allow each Director the opportunity to conveniently confirm his or her desire to continue as a member of the Board.
• Retirement Age. A director will not be nominated for re-election after his or her 72nd birthday; provided, however, the Board may nominate candidates over the age of 72 under special circumstances.
• Change of Responsibility of Director. When a non-employee director's principal occupation or business association changes substantially during his or her tenure as a director, that director shall tender his or her resignation for consideration by the Board. The Nominating and Governance Committee will consider the tendered resignation and recommend to the Board the action, if any, to be taken with respect to the resignation.
• Former Chief Executive Officer. When the Chief Executive Officer resigns or retires, he or she should tender his or her resignation from the Board to the Nominating and Governance Committee at that time. Whether the individual continues to serve on the Board is a matter for discussion at that time with the Board.
• Number of Other Directorships. Non-management Directors should not serve on more than four public company boards in addition to the Company's Board. Current positions in excess of these limits may be maintained unless the Board of Directors determines that doing so would impair the Director's service on the Company's Board. Non-management Directors should advise the Chairman of the Board, the Chairman of the Nominating and Governance Committee and the Secretary in advance of accepting an invitation to serve on another board.

Resignation for majority withhold vote
As long as cumulative voting is not in effect, in an uncontested election of Directors (i.e., an election where the only nominees are those recommended by the Board of Directors), any nominee for Director who receives a greater number of votes "withheld" from his or her election than votes "for" his or her election (a "Majority Withheld Vote") will promptly tender his or her resignation to the Chairman of the Board following certification of the shareholder vote.

• The Nominating and Governance Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept or reject the tendered resignation no later than 60 days following the date of the shareholders' meeting at which the election occurred (the "Shareholders' Meeting Date"). In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee will consider factors deemed relevant by the Committee members including, without limitation, the Director's length of service, the Director's particular qualifications and contributions to the Company, the reasons underlying the Majority Withheld Vote (if known) and whether these reasons can be cured, and compliance with stock exchange listing standards and the Company's Corporate Governance Guidelines.
• The Board will act on the Nominating and Governance Committee's recommendation no later than 90 days following the Shareholders' Meeting Date. In considering the Nominating and Governance Committee's recommendation, the Board will consider the factors considered by the Committee and such additional information and factors the Board believes to be relevant. Following the Board's decision on the Nominating and Governance Committee's recommendation, the Company will promptly publicly disclose the Board's decision whether to accept the resignation as tendered (providing a full explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation) in a Current Report on Form 8-K filed with the Securities and Exchange Commission.
• If one or more Directors' resignations are accepted by the Board, the Nominating and Governance Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.
• Any Director who tenders his or her resignation pursuant to this provision will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether to accept or reject the tendered resignation. If a majority of the members of the Nominating and Governance Committee received a Majority Withheld Vote at the same election, then the independent Directors who are on the Board who did not receive a Majority Withheld Vote (or who were not standing for election) will automatically be appointed a special Board committee solely for the purpose of considering the tendered resignations and will recommend to the Board whether to accept or reject them.
• This Corporate Governance Guideline will be summarized or included in each proxy statement relating to an election of directors of the Company.