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Conflict Of Interest Guidelines For Trustees
Codifying previous policies and practice, the board of trustees has established a conflict of interest policy based upon prior disclosure of affiliations that may lead to conflicts and upon withdrawal from decision making where those affiliations are involved.
This document is intended to implement the board's instruction to the committee on trustees to devise conflict of interest procedures for board members. I believe that the important areas have been addressed in the following document, but please bring any continuing concerns to my attention.
Edward Sermier
Vice President, Chief Administrative Officer, and Corporate Secretary
CONFLICT OF INTEREST GUIDELINES FOR TRUSTEES
Definitions
A conflict of interest exists
- when a trustee takes part in a decision in which it appears that she/he may be unable to remain impartial in choosing between the interests of the foundation and personal interests or the personal interests of her/his related parties, or
- when a trustee uses privileged information gained in the course of service at the foundation for personal benefit or gain, or for the personal benefit or gain of her/his related parties, or
- when a trustee, by virtue of his/her relationship to the foundation, receives a benefit that represents a transfer of the foundation's financial resources that is not related to the accomplishment of the foundation's tax-exempt purposes
Related parties are spouses, parents, children, siblings, in-laws, and any family members who reside in a trustee's household.
Annually means within twelve months of the date of disclosure.
Affiliation means that the trustee or a related party is an officer, director, partner, trustee, employee, or agent of the institution, corporation, or organization in question; holds more than 1% of the voting stock; has dealings with such an organization from which he or she has materially benefited (i.e., received more than $1,000 exclusive of dividends and interest). (These limits are the same for staff members.)
Generally, the following types of transactions may constitute self-dealing and are prohibited between a foundation and disqualified persons, among whom trustees and their related parties number:
- sale or exchange, or leasing, of property
- lending of money or other extension of credit
- furnishing of goods, services, or facilities
- payment of (unreasonable) compensation by a foundation to a disqualified person
- transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a private foundation
- agreement by a foundation to make payment of money or other property to a government official
General Guidelines
1. The potential for conflict of interest is best avoided when trustees do not benefit financially from their relationship with the Corporation other than by the receipt of trustee honoraria and meeting fees and/or by participation in the board-approved charitable gifts matching programs.
2. The potential for conflict of interest is best avoided when trustees' actions are perceived by the outside public to be consistent with the responsibilities of trustees as outlined in resolutions passed by the board at its meeting of November 10, 1971, and reaffirmed at its meeting of October 8, 1998.
3. The potential for conflict of interest is best avoided when policies applying to trustees apply equally to related parties.
4. If special circumstances seem to necessitate an exception to guidelines 1-3 above, it is the obligation of the individual in question to discuss the circumstances in advance with the chairman of the board and to secure his/her written approval of the special situation and to give a copy of the approval to the corporate secretary.
Types of Relationships
Financial transactions
While IRS regulations prohibit, as self-dealing, most financial transactions between the Corporation and a disqualified individual, it is Corporation policy to keep an arm's-length relationship even in those areas that are legally permitted. Specifically,
- The Corporation does not employ the personal services of trustees or related parties, even though law permits reasonable payment for such.
- The only exception to this policy is for a pre-existing relationship, in order not to exclude from board service individuals who are otherwise qualified and whom the committee on trustees wishes to recommend for board membership. (Advice of counsel may be sought to confirm the legality of the specific relationship prior to the candidate's election.)
It is the duty of a trustee to bring to the attention of the vice president and chief administrative officer or the vice president and chief investment officer any business affiliation that might breach this arm's-length relationship in financial and investment matters and thus create a potential conflict of interest.
Grantmaking activities
Trustees should disclose to the corporate secretary all their affiliations and the affiliations of their related parties with grantees and potential grantees at the beginning of their board service and update this information annually, or more frequently as appropriate. For these institutions or organizations,
- Trustees should not personally represent them in requesting grants
- Trustees should abstain from votes on and withdraw from discussions of grants to them
- If staff members solicit a trustee's views on an organization with which he/she has an affiliation, the trustee should state the affiliation and avoid advocacy while giving the staff member the benefit of his/her special knowledge
If a trustee or related party is a principal in a grant that the staff has decided to recommend to the board, no Corporation funds will be used to pay his/her salary.
Conflict of Interest Disclosure and Reporting
Trustees shall complete a Prior Disclosure Conflict of Interest Questionnaire at the beginning of each calendar year prior to the payment of honoraria or meeting fees.
Based upon the information provided to the corporate secretary, any trustee/related party affiliations with recommended grantees will be brought to the attention of the trustees before the grants being recommended at a board meeting are discussed or a vote is taken.
Abstaining trustees will not be counted toward the quorum for a grant vote.
At the annual meeting, the corporate secretary will provide a listing of all grantees in the previous fiscal year with which trustees/related parties were affiliated when the grant was made.
TRUSTEES OF CARNEGIE CORPORATION OF NEW YORK
Conflict of Interest Disclosure Questionnaire
Calendar Year 2005
I have received and read the attached Conflict of Interest Guidelines for Trustees implementing the conflict of interest policy adopted by the board of trustees at its meeting of October 14, 1999, and I am in compliance with the policy. I have listed current and potential conflicts below:
[Even if you do not have conflicts, please sign this form and return it in the envelope provided.]
MY
CONFLICT
RELATED
PARTY'S
CONFLICT
(describe nature
of relationship
e.g., "spouse") NAME OF ORGANIZATION AND
AFFILIATION
Do you or a related party
have an affiliation with any
organization with which
you believe CCNY does
business other than a
grantmaking relationship?
Do you or a related party
have affiliations with current
or potential grantees?
.
Are you aware of any
other situations that may result
in a real or perceived con-
flict of interest as described
by these guidelines?
Signature Name Date
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