Scope. The following statement of policy (the “Policy”) applies to (i) each Trustee (“Trustee”) of the Cystic Fibrosis Foundation Board of Trustees (the “Board”), (ii) each advisor (“Advisor”) to the Board,1 (iii) each Board officer (“Officer”) of the Cystic Fibrosis Foundation and its controlled affiliates, if any, (collectively, the “Foundation”), and (iv) each director of such affiliate. All directors of such affiliate who are not Officers of the Foundation shall be subject to the same requirements as Trustees under this Policy.
Conflicts of Interest. Trustees, Advisors, and Officers of the Foundation must perform their responsibilities in the best interest of the Foundation and avoid engaging in activities that create actual or potential conflicts of interest.
The Foundation’s integrity must be protected and advanced at all times. Therefore, employees, consultants or directors of biotechnology and pharmaceutical companies where a material focus is on cystic fibrosis may not serve in a voting capacity on the Board. In the event that the preceding becomes relevant for a Trustee, the procedures in section 5 below would apply.
The Foundation recognizes that Trustees, Advisors, and Officers of the Foundation could have other potential conflicts of interest with the Foundation. Although potential conflicts may be inconsequential, it is everyone’s responsibility to ensure that the Board is made aware of situations that involve personal, familial or Commercial Relationships (as defined below) that could encumber the independence or the ability of Trustees, Advisors, or Officers to act in the best interests of the Foundation.
Thus, the Board annually requires each Trustee, Advisor, and Officer of the Foundation (1) to review this Policy; (2) to disclose any potential personal, familial, or Commercial Relationships that reasonably could give rise to a conflict of interest involving the Foundation; and (3) to acknowledge by his or her signature that he or she is in compliance with the letter and intent of this Policy.
Disclosure. All Trustees, Advisors, and Officers of the Foundation are requested to list on this form those Commercial Relationships that they (or a Family Member) maintain with organizations that (1) do business with the Foundation or which are owned, in whole or in part, by organizations that do business with the Foundation (including, but not limited to vendors and organizations in which the Foundation invests for mission-related purposes or purposes of a financial return), (2) are engaged in work concerning cystic fibrosis or (3) otherwise could be construed potentially to affect their independent, unbiased judgment in light of their decision-making authority or responsibility. These disclosures are to be made annually upon distribution of this form by the Foundation as well as updated promptly throughout the year as appropriate.
Information provided on this form may be disclosed to the Governance Committee of the Board, the Board, and the Foundation’s legal counsel and leadership for review. Such information shall otherwise be kept as confidential and shall only be disclosed on a need-to-know basis or as required by law.
The following definitions are provided to help you decide whether a “Commercial Relationship” should be listed on this form, who constitutes a “Family Member,” and what constitutes holding an “Indirect” interest.
Family Member: A Family Member shall mean a person related by blood, marriage, or adoption to a Trustee, Advisor, or Officer, as the case may be.
Indirect: Indirect ownership constitutes ownership in an entity that has ownership of the entity in question; e.g., through a corporation, partnership, limited liability company, trust, investment fund (excluding mutual funds, exchange traded funds and hedge funds) or other business entity. There can be Indirect ownership through multiple tiers of entities.
Commercial Relationship: One in which a Trustee, Advisor, Officer of the Foundation or a Family Member (i) serves as a paid or unpaid officer, director, partner, trustee, or advisor (e.g., a scientific advisor) of an entity; (ii) is the direct or Indirect owner of an investment in an entity that is (a) one percent (1%) or more of such entity, or such lesser investment that nevertheless places the Trustee, Advisor, Officer of the Foundation or Family Member in a position to influence decisions of such entity, or (b) in a position to benefit from a business decision made by the Foundation; or (iii) otherwise regularly engages in a course of business with an entity that could reasonably be considered to give such Trustee, Advisor Officer or Family Member a financial stake in the Foundation continuing to do business or commencing business with such entity.
Evaluation. For each Commercial Relationship that is disclosed with an entity, the Foundation shall, upon the request of the Governance Committee Chair, identify all business relationships and all conflicting or competing interests it has with such entity and disclose these relationships and interests to the Governance Committee and the Board to evaluate the significance of such business relationships and interests to the Foundation and to the entity as part of the effort to determine whether such Commercial Relationship creates a conflict of interest under this policy and the Foundation’s Bylaws.
Removal. Pursuant to Article II, Section VI of the Foundation’s Bylaws, when any conflict of interest is relevant to a matter requiring action by the Board, the interested Trustee, Advisor, or Officer shall retire from the room in which the Board or its committee is meeting, shall not participate in deliberation of the matter, and shall not vote on the matter. When there is a doubt as to whether a conflict of interest exists, the matter shall be resolved pursuant to Article II, Section VI of the Foundation’s Bylaws. In addition, when the Foundation or an affiliate has a significant and continuous business relationship (e.g., receipt by the Foundation or its affiliate of substantial royalty payments) over an extended period with an entity with which a Trustee, Advisor, Officer, or Family Member has a Commercial Relationship that may result in an appearance of conflict, such Commercial Relationship may disqualify such Trustee, Advisor, or Officer from serving on or advising the Board or continuing as an Officer of the Foundation, as the case may be, regardless of whether an actual conflict of interest exists, unless the Trustee, Advisor, Officer, or Family Member agrees to dispose of or terminate such Commercial Relationship. Removal of a Trustee, Advisor or Officer pursuant to the proceeding sentence shall be in accordance with Article 2, Section IV and/or Article 3, Section X of the Foundation’s Bylaws, as the case may be.
Confidentiality. It is anticipated that Trustees, Advisors, and Officers will, in connection with their service to the Foundation, learn about certain confidential information with respect to the Foundation and third parties with which the Foundation does business. Each Trustee, Advisor, and Officer agrees and acknowledges that he or she will not disclose any such confidential information to a third party in accordance with the Non-Disclosure Agreement signed by such Trustee, Advisor, or Officer.
1 This Policy also applies to Advisors to Board Committees.