STEINWAY MUSICAL INSTRUMENTS, INC.
CORPORATE GOVERNANCE GUIDELINES

OVERVIEW
The purpose of these Corporate Governance Guidelines is to set forth the vision of the Company as to good corporate governance practices as well as to implement the requirements of the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange ("NYSE") listing requirements.

POLICY
Director Qualification Standards
The Company is a Controlled Company as defined in Section 303A of the NYSE’s Listed Company Manual (the “Manual”), and is therefore exempt from Sections 303A.01, .04 and .05 of the Manual. Directors that shall be deemed “independent” shall satisfy the independence qualifications in applicable provisions of the Securities Exchange Act of 1934 and all SEC rules and regulations promulgated thereunder, the Manual and all applicable rules of the NYSE.

Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders of the Company. In addition, Directors should have broad-based business skills and experiences and a global business and social perspective.

Directors are expected to advise the Chairman of the Board promptly (i) upon accepting any other public company directorship or any assignment to the audit committee or compensation committee of the board of directors of any public company of which such director is a member and (ii) concerning any changes in their business or professional affiliations or responsibilities, including retirement.

Director Responsibilities
Directors should exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company in a manner consistent with their fiduciary duties. Directors should regularly attend meetings of the Board of Directors and of all Board committees upon which they serve. To prepare for meetings, directors should review the materials that are sent to directors in advance of those meetings.

Directors shall at all times exhibit high standards of integrity, commitment and independence of thought and judgment. Directors shall comply with the Company’s Ethics and Professional Conduct Policy and other applicable policies and procedures.

The Board of Directors will schedule regular executive sessions where non-management directors meet without management participation. The Board of Directors shall select a non-management director to preside or lead at each executive session (which selection shall be ratified by vote of the non-management directors of the Board of Directors). The Board of Directors will establish methods by which interested parties may communicate directly with the presiding director or with the non-management directors of the Board of Directors as a group and cause such methods to be disclosed.

The Board of Directors shall maintain an Audit Committee, Compensation Committee and Option Committee, all of which shall consist entirely of independent directors and which must operate in accordance with applicable law, their respective charters (if applicable), as adopted and amended from time to time, and the applicable rules of the SEC and the NYSE. The Audit Committee shall have a written charter of authority, duties and responsibilities, which shall be periodically reviewed by the Board. The Board may also establish such other committees as it deems appropriate and delegate to such committees such authority permitted by applicable law and the Company's By-Laws as the Board sees fit.

Director Access to Management and Independent Advisors
The Company shall provide each director with complete access to the management of the Company, subject to reasonable advance notice to the Company and reasonable efforts to avoid disruption to the Company's management, business and operations. The Board of Directors and Board committees, to the extent set forth in the applicable committee charter, have the right to consult and retain independent legal and other advisors at the expense of the Company.

Director Compensation
The Board of Directors will determine and review the form and amount of director compensation, including cash, equity-based awards and other director compensation. In connection with such director compensation, the Board of Directors will be aware that questions may be raised when directors' fees and benefits exceed what is customary. Similarly, the Board of Directors will be aware that the independence of directors could be questioned if substantial charitable contributions are made to organizations in which a director is affiliated. Further, the Company shall not enter into consulting or advisory contracts with, nor provide other indirect compensation to, an independent director. The Board of Directors will critically evaluate each of these matters when determining the form and amount of director compensation, and the independence of a director.

Director Orientation and Continuing Education
The Board of Directors or the Company will identify and provide access to, appropriate orientation programs, sessions or materials for newly elected directors of the Company for their benefit either prior to or within a reasonable period of time after their election as a director. The Board of Directors or the Company will encourage, but not require, directors to attend continuing education programs, sessions or materials on topics relevant to their responsibilities as directors of a public company.

Management Evaluation and Succession
The Compensation Committee will conduct an annual review of the performance and compensation of the Chief Executive Officer ("CEO”).

The Board of Directors will establish and review such formal or informal policies and procedures, consulting with the Chairman and CEO and others, as it considers appropriate, regarding succession to the Chairman and CEO in the event of emergency or retirement.

Annual Performance Evaluation of the Board and Committees
The Board of Directors and each of its Committees will conduct a self-evaluation annually to determine whether the Board and such committees are functioning effectively. The full Board of Directors will discuss the evaluation reports to determine what, if any, action could improve Board and Board committee performance. The Board of Directors shall review these Corporate Governance Guidelines on an annual basis to determine whether any changes are appropriate.

Amendment, Modification and Waiver
These Guidelines may be amended, modified or waived by the Board of Directors, subject to the disclosure and other provisions of the Securities Exchange Act of 1934, the rules promulgated thereunder and the applicable rules of the NYSE.