Adopted by the Board of Trustees on January 21, 2004, and Amended on October 29, 2019
Robert Wood Johnson II established this Foundation exclusively to advance charitable purposes for the public good. The Board of Trustees honors General Johnson’s values by setting the highest ethical standards for the Foundation’s Trustees, non-Trustee advisors to the Board and its committees, and staff. We do this in many ways, including by using the Foundation’s assets prudently and efficiently, by taking measures to assure that decisions are made with integrity and in compliance with law, and by adhering to our Guiding Principles and other policies, including this Conflict of Interest Policy.
This policy is intended to provide guidance on how to deal appropriately with situations that involve conflicts of interest; moreover, we recognize that the appearance of a conflict can be as damaging as the existence of an actual conflict. Accordingly, the purpose of this policy is to avoid both the reality and the perception that Trustees, non-Trustee advisors, or staff have exercised improper influence on a Foundation decision, and it should be interpreted and applied to achieve this purpose.
This policy supplements but does not replace applicable laws governing conflicts of interest or other provisions imposing fiduciary duties on Trustees, non-Trustee advisors, and staff, such as the duty of loyalty to the Foundation when conducting Foundation business.1
Any actual, potential, or perceived conflicts of interest must be disclosed fully before a decision is made on the matter involved, and no Trustee, non-Trustee advisor to the Board or its committees (each, an “advisor”), or staff member may participate (other than by providing information) in any decision in which he or she has a Conflict of Interest, whether actual, potential, or perceived.
a. Affiliation – means a relationship between (i) a Foundation Party or Immediate Family Member of a Foundation Party and (ii) a Third Party that reasonably could be expected to influence the Foundation Party’s decision regarding a Transaction. Affiliation includes, but is not limited to, serving as a governing or advisory board member, officer, employee of, or paid consultant to, or having a compensation arrangement with, a Third Party.
b. Conflict of Interest – A Conflict of Interest includes actual, perceived, and potential conflicts of interest.
i. Actual Conflict of Interest – means a Transaction in which a Foundation Party who is in a position to make or influence the Foundation’s decision regarding the Transaction has an Affiliation with a Third Party to the Transaction.
ii. Perceived Conflict of Interest – means a Transaction in which a Foundation Party could reasonably be viewed as having a divided loyalty with respect to the Transaction.
iii. Potential Conflict of Interest – means a Transaction in which a Conflict of Interest is likely to arise because a Foundation Party has an Affiliation with a Third Party to the Transaction.
c. Covered Person – means the Foundation’s Trustees, officers (as defined in the Foundation’s bylaws), and substantial contributors (Robert Wood Johnson II); Immediate Family Members of the foregoing; and any entity in which Covered Persons (individually or collectively) own a 35 percent or greater ownership interest.
d. Foundation Party – means a Covered Person or Foundation advisor or staff member.
e. Immediate Family Member – means an individual’s spouse or domestic partner, ancestors, siblings, children, grandchildren, great-grandchildren, and the spouses or domestic partners of the individual’s siblings, children, grandchildren, and great-grandchildren.
f. Third Party – means a person or entity involved in a Transaction or potential Transaction with the Foundation.
g. Transaction – means any contract, grant, investment, or other arrangement related to the provision of funds, goods, or services to or from the Foundation.
a. Annual Conflict of Interest Questionnaire – Each Foundation Party shall complete an annual Conflict of Interest questionnaire disclosing Affiliations and any other relationship or commitment that creates or could create a Conflict of Interest. The questionnaire should be updated by the Foundation Party during the year, where warranted. Doubts about whether disclosure is warranted should be resolved in favor of disclosure.
b. Additional Disclosure – In addition to completing the annual Conflict of Interest questionnaire, disclosure should be made, orally or in writing, any time consideration is being given to a Transaction involving a Conflict of Interest. Doubts about whether disclosure is warranted should be resolved in favor of disclosure. Trustees and advisors should disclose in writing to the Chair of the Board and president and chief executive officer (CEO). Staff members should disclose in writing to the general counsel and to the chief of staff or executive vice president.
4. Procedures for Transactions
a. Assessment of Matters Where There Is an Affiliation – If the Foundation considers entering into a Transaction with a Third Party with which a Foundation Party has an Affiliation, such Transaction will be assessed by the same substantive standards as other Transactions, including assessing whether the Transaction will comply with the law and be in the best interests of the Foundation. The Foundation will maintain a record of its deliberations, including any data considered in assessing the reasonableness of the Transaction.
b. Abstention From Discussion, Decision-Making, and Evaluation
i. Discussion – Whenever a Foundation Party has a Conflict of Interest with respect to a Transaction, the Foundation Party shall refrain from engaging in discussion (other than providing information as set forth below), or using personal influence, regarding the potential Transaction or the Third Party to the Transaction, with other Foundation Parties.
ii. Deliberation and Voting – In all situations calling for disclosure of Affiliations, the Foundation Party should abstain from deliberating, voting, or otherwise participating in the decision other than by providing any information requested by the disinterested decision-makers. The abstention should be formally noted in the minutes in the case of a member of the Board of Trustees or advisor, and in any written record of the decision in the case of staff.
iii. Post-Transaction Activities – If the Foundation enters into the Transaction, the Foundation Party with the Affiliation shall not participate in any subsequent action, discussion, or evaluation in connection with the Transaction.
c. Matching Gift Program Exception – The Foundation’s Matching Gift Program allows Trustees, advisors, and staff to request that the Foundation match personal contributions to eligible charities. Because the purpose of the Matching Gift Program is to encourage participants to engage in charitable activities outside of the Foundation, Trustees, advisors, and staff are not precluded from requesting matching gifts to charitable organizations with which they have an Affiliation provided they satisfy all provisions of the Matching Gift Program policy, including its disclosure requirements. Final decisions about whether to make a matching gift are reserved to the Foundation.
5. Additional Procedures Applicable to Trustees and Other Covered Persons
a. Trustee Communications About Proposed or Potential Transactions – Any communication by a Trustee regarding a proposed or potential Transaction with a Third Party with which the Trustee has an Affiliation initially should be directed only to the chief of staff or the executive vice president.
b. Grants to an Organization that Employs a Covered Person – While grants to organizations that employ a Covered Person are not prohibited, the following provisions must be satisfied:
i. The grant shall not include funds designated or used to pay the compensation or benefits of the Covered Person.
ii. The grant cannot constitute more than 10 percent (10%) of the organization/department’s revenue for that fiscal year.
iii. The grant shall not be for a project for which a Covered Person carries immediate oversight responsibility. (Examples of “immediate oversight responsibility” include: being the principal investigator; having responsibility for the grant budget, hiring under the grant, and/or the deliverables; or having direct supervision of the principal investigator in an organization of fewer than 500 people.)
It is the responsibility of the president and CEO to enforce this policy.
1Note: The payment of reasonable compensation and the payment or reimbursement of expenses to Trustees, non-Trustee advisors, and staff for personal services that are reasonable and necessary to the carrying out of the Foundation’s activities are not prohibited.