Adopted by the Board of Trustees March 5, 2008
This document contains an overview of the Museum's governance standards, policies, practices, and legal requirements. The policy applies to the Trustees, all Committee members, and senior officers of the Museum.
RESPONSIBILITIES OF THE BOARD OF TRUSTEES
The Board of Trustees as a whole is responsible for oversight of the management of AMNH so that its collections, programs, physical facilities, financial assets, and staff are properly and effectively used in support of the AMNH mission and purposes established by the AMNH charter. Primary responsibilities of the Board and the Committees of the Board and Museum are to:
- approve the mission and purpose of AMNH;
- recruit, appoint, support, and evaluate the president as chief executive officer of AMNH;
- review compensation practices and policies; oversee senior management's conduct and performance in carrying out the Museum's mission
- protect the financial integrity of AMNH by:
- managing the endowment
- considering and approving the annual operating and capital budgets
- reviewing and approving key financial transactions
- participating in fund-raising, both through personal philanthropy and other supporting efforts in fund-raising
- providing for annual independent audits;
- review the strategic direction of AMNH by participating in periodic strategic planning and monitoring progress;
- oversee the quality and overall long-term direction of the scientific research enterprise, exhibition and education programs, and related research facilities and collections, and preserve institutional independence to protect the quality of these programs and research facilities and collections, free of undue influence by government or special interests;
- adopt or oversee key institutional policies and practices for accountability to:
- the mission and chartered purposes of AMNH,
- the values that guide and shape scientific research and education,
- the public interest and constituencies served by AMNH, and
- the tax exempt status of AMNH and other regulatory requirements.
As stewards of the Museum, the Trustees also provide leadership and support and are important ambassadors for the institution in providing outreach to prospective individual, corporate, and foundation donors. The Trustees also contribute through their participation and involvement in Committee meetings, projects and initiatives undertaken by the Museum.
The responsibility of the Trustees is to act in good faith and with loyalty and due care so as to exercise their business judgment on an informed basis in what they reasonably and honestly believe to be in the best interest of AMNH and the public it serves. Due care requires the degree of diligence, care and skill that an ordinarily prudent person in a like position would exercise under similar circumstances. In discharging their duty of loyalty to AMNH and determining what is in the best interests of AMNH, a Trustee or officer may not use his or her position for personal or financial profit, gain or other advantage.
In taking any action and in overseeing the Museum’s assets, Trustees may rely on information, opinions, reports or statements, including but not limited to financial statements or other financial data, in each case prepared or presented by (1) one or more officers or employees of the Museum, whom the Trustees believe to be reliable and competent in the matters presented, (2) legal counsel, public accountants or other persons as to matters which the Trustees believe to be within such person’s professional or expert competence, or (3) a Committee upon which they do or do not serve, duly designated in accordance with the provision of the By-laws, as to matters within its designated authority.
COMPOSITION OF THE BOARD OF TRUSTEES AND TERMS
The Museum is governed by a Board of Trustees that currently consists of a maximum of seventy-five individuals elected by the Board, and eight ex officio trustees. The ex officio trustees are the President of AMNH and the following New York City officials: Mayor of the City of New York; Speaker of the Council of the City of New York; Comptroller of the City of New York; President of the Borough of Manhattan; Commissioner of the Department of Parks and Recreation; Commissioner of the Department of Cultural Affairs; and Commissioner of the Department of Education. The Trustees serve without compensation for their duties as Trustees.
The elected Trustees are divided into three classes for the purpose of staggering their terms of office. The term of each class is three years. Other than officers of the Board and Trustees at Large, no elected Trustee may serve for more than three consecutive full three-year terms, but may be re-elected upon completion of a one year hiatus in service.
OFFICERS OF THE BOARD AND TERMS
The officers of the Board include the Chairman, President, one or more Vice Chairmen, Secretary, and Treasurer. The Officers of the Board, with the exception of the President, serve without compensation. All officers of the Board, except for the President, are elected annually by the Board and are not term limited. The offices of President, Board Chairman, and Board Treasurer are held by separate individuals.
Membership on standing Committees of the Board is limited to Trustees and may include Chairmen Emeriti in a nonvoting capacity, all of whom are elected for one-year terms by a majority of the entire Board. Standing Committees have authority to act for the Board to the extent provided in the by-laws or resolution of the Board. The Standing Committees of the Board are as follows:
|Standing Committees of the Board of Trustees|
|Budget and Finance|
|Building and Grounds|
|Trustees and Governance|
Membership on Committees of the Museum is not limited exclusively to Trustees; however, a majority of the members of each Committee of the Museum must consist of Trustees. The Chairman and President are ex officio members of all Committees of the Board and Committees of the Museum.
Committees of the Museum are advisory. Committees of the Museum are as follows:
Committees of the Museum |
(may include non-Trustee members)
AMNH also maintains a number of advisory councils, ad hoc committees, project committees and task forces (“Advisory Committees”), such as the Biodiversity Advisory Council, the Graduate School Task Force, the Museum Advisory Council, and the Oral History Project Committee and has authority to form or convene others from time to time. Because these bodies are advisory, membership is open to individuals who are not Trustees and Trustees need not form a majority of any of the Advisory Committees. Standing Committees of the Board and Committees of the Museum are herein referred to as “Committees”.
NOMINATION OF TRUSTEES, OFFICERS OF THE BOARD, AND COMMITTEE MEMBERS
The Committee on Trustees and Governance reviews any person proposed to the Board as a candidate for election to membership on the Board, including those persons to be elected as Trustees at Large, for election to Committees of the Board and the Museum and Advisory Committees, or for election as officers of the Board. The Committee on Trustees and Governance issues reports to the Board recommending candidates for election or appointment that includes members of diverse backgrounds, experience, and organizational and financial skills.
The Chairman, in consultation with the President, appoints the Chairmen of all Committees and Advisory Committees.
A substantial majority of the Board of Trustees are independent, that is, (1) are not compensated by the AMNH as employees or independent contractors; (2) do not have their compensation determined by individuals who are compensated by AMNH; (3) do not receive, directly or indirectly, material financial benefits from the AMNH; or (4) are not related to (as a spouse, sibling, parent or child), nor reside with any individual who receives compensation or is employed as an independent contractor by AMNH.
ORIENTATION AND EVALUATION OF TRUSTEES AND OFFICERS OF THE BOARD
The Committee on Trustees and Governance oversees the orientation program for new Trustees. Additionally, before the Museum’s end of the year Annual Board meeting, the Committee on Trustees and Governance convenes to conduct, among other things, Trustee performance evaluations. These evaluations include consideration of many factors, including, among others, participation, involvement, fund giving and/or fundraising, and any other factors in the Committee’s discretion.
The Board of Trustees has four regularly scheduled meetings each year. The Trustees are expected to prepare for all meetings by reviewing the materials they are provided in advance of each meeting and to attend all meetings. Committee meetings are held as needed.
FINANCIAL CONTROLS AND RISK MANAGEMENT
Annual operating and capital budgets are approved by the Board no later than the first quarter of the fiscal year. The Budget and Finance Committee reviews the operating budget and interim results during the year and the Building and Grounds Committee reviews the capital budget and interim results during the year. The two Committees report interim results to the Board at its regular meetings.
The Audit Committee meets with the AMNH independent public auditors, internal audit function, and senior management to assist the Board of Trustees in its oversight of 1) the quality and integrity of the Museum’s financial statements and accounting policies; 2) the reliability and integrity of the Museum’s systems of accounting procedures and internal controls; 3) the Museum’s compliance with legal and regulatory requirements; 4) the qualifications, independence and performance of the Museum’s independent auditors; and 5) the qualifications, independence and performance of the Museum’s internal audit function. It meets with the public accountants each year to review the results of the financial audit and the auditor’s recommendations on internal financial and operational controls. The Audit Committee also meets with senior management in finance, operations, and legal affairs and with the internal auditor or an internal auditing firm to review risk assessments and the results of internal audits. The Audit Committee reviews the AMNH insurance pursuant to advice from insurance advisors. The Audit Committee receives reports from the General Counsel on all Compliance Helpline (“whistleblower”) complaints and their disposition. The Audit Committee reviews related party transactions not reviewed by the Board or other Committees as well as monitors the tax exempt status of the Museum.
ANNUAL REPORT OF TRUSTEES
At the annual meeting of the Board, the President and Treasurer present an annual report certified by an independent certified public accountant showing in appropriate detail the following financial condition and results during the fiscal year: (1) the assets and liabilities, including trust funds; (2) the principal changes in assets and liabilities including trust funds; (3) the revenue or receipts of the Museum, both unrestricted and restricted to particular purposes; and (4) the expenses and disbursements of the Museum, for both general and restricted purposes. The annual report is filed with the minutes of the annual meeting of the Board.
The Investment Committee meets several times per year to review and manage endowment asset allocation, investment guidelines, investment results and investment manager performance and selection. The Investment Committee reports to the Board regularly at Board meetings on investment results, annual spending policy, and changes in investment managers.
Every two years, the Board Planning Committee works with management and reviews the strategic direction and goals of AMNH and completes an evaluation of the progress in meeting them. The evaluation describes the activities AMNH undertook in the prior two years to achieve its goals, analyzes the effectiveness of AMNH in achieving strategic objectives, recommends future actions, and revises the strategic direction and goals if and as needed. The report is made to the Board, recorded, and then submitted to the Board for approval.
TAX EXEMPT STATUS
AMNH is a publicly-supported, tax exempt educational corporation pursuant to sections 501(c)(3) and 170 of the Internal Revenue Code. This tax exempt status provides an exemption from income tax to AMNH for its related educational activities and it provides tax deductibility to donors for gifts to AMNH.
To maintain that status, AMNH must operate exclusively for its exempt public purpose. In addition, it is required to comply with various operational constraints. These constraints include that no part of AMNH net earnings may inure to the private benefit of any individual, that AMNH may not devote a substantial part of its activities to carrying on propaganda or otherwise attempting to influence legislation, and that AMNH may not participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office.
Further, assets of AMNH may not be used to provide an “excess benefit” (i.e. a benefit that exceeds the consideration received by the Museum) to anyone in a position to exercise substantial influence over the affairs of AMNH— Trustees, officers of the Board or senior officers of the Museum, substantial donors or their Family Members or Affiliates. (Family Members are the person’s spouse, domestic partner, ancestor, descendant, or spouse of descendant or ancestor. An Affiliate is any business entity, trust or estate in which the person or Family Member has more than 35% of any voting power, profits interest, or beneficial interest.) While such persons may not receive an excess benefit, they may receive customary cultivation, recognition and acknowledgements for major donations they make to the Museum, which may include an opening event for a new hall resulting from the donation, gifts of nominal cost, and the customary benefits afforded to all patrons and members who make annual donations to AMNH.
The Audit Committee monitors compliance with the AMNH tax exempt status.
SENIOR OFFICERS OF THE MUSEUM
The President has primary responsibility for the management and operation of AMNH and authority to appoint senior management as officers of the Museum. The fiduciary duties of senior officers are to act in good faith and with loyalty and due care so as to exercise their business judgment on an informed basis in what they reasonably and honestly believe to be in the best interest of AMNH and the public it serves. The senior officers are responsible to the President and, through the President, to the Board of Trustees.
The senior officers appointed by the President currently are: Senior Vice President for Development and Membership, Senior Vice President for Operations and Government Relations, Senior Vice President and Provost of Science, Senior Vice President and Chief Financial Officer, Senior Vice President for Education, Government Relations and Strategic Planning, Senior Vice President for Communications and Marketing, Vice President for Exhibitions, General Counsel and Senior Advisor to the President. Titles and positions may vary from time to time.
EVALUATION AND COMPENSATION OF THE PRESIDENT
AND SENIOR OFFICERS OF THE MUSEUM
The Executive Compensation Committee meets separately or jointly with the Officers Committee every year, to formally review the performance of the President and the senior officers of the Museum and fixes the compensation of the senior officers of the Museum and the compensation and term of service of the President. The President does not attend or participate in the discussions, deliberations or the voting on his or her compensation.
MANAGING CONFLICTS OF INTEREST
Whenever a Trustee, Committee member, or senior officer becomes aware that he or she or one of their Family Members or Affiliates has an interest in a transaction that might present a conflict with the Museum, the individual shall disclose immediately and fully the potential conflict, seeming or real, to the Assistant Secretary of the Board of Trustees or General Counsel. (Family Members are the person’s spouse, domestic partner, ancestor, descendant, or spouse of descendant or ancestor. An Affiliate is any business entity, trust or estate in which the person or Family Member has more than 35% of any voting power, profits interest, or beneficial interest.) An “interest in the transaction” may take the form of (i) a significant personal financial interest in the transaction; (ii) a significant personal financial or other relationship with an organization involved in the transaction; or (iii) a position as trustee, director, officer, key employee, major donor, or someone owing a fiduciary duty to an organization involved in the transaction (e.g. grant-making, hiring or termination of vendors or service providers, including potential and current auditors, attorneys, investment advisors, and similar professionals),
Upon disclosure, the Assistant Secretary and General Counsel will advise and consult with the President and the Chairman of the Board to determine if a proposed transaction presents a conflict or potential conflict and whether the relationship or amount is more than de minimis or otherwise requires a review. Where it has been determined that a review is required, the conflict or apparent conflict will be disclosed (if not already known) to the others involved in the transaction, and the transaction may be approved only upon a vote of a majority of the disinterested members of the Board of Trustees or of relevant Committee (for matters coming before the Board or a Committee) or by disinterested members of the Audit Committee (in all other matters).
If the Trustee, Committee member, or senior officer is present at a meeting of the Board or any Committee at which such a matter is considered, he or she must leave the meeting during the discussion and vote, however, they may be counted in the quorum. The remaining Board or Committee members determine whether the transaction is both fair and reasonable to the Museum, taking into consideration data of comparable transactions, as appropriate. The minutes of the meeting record the disclosure of the conflict, the terms of the transaction, the interested person’s abstention from consideration of the matter, and the determination, if made, that the transaction is fair and reasonable to AMNH.
Trustees, Committee members (and senior officers with permission of the President or Board of Trustees) may also serve as directors or officers of for-profit firms or non-profit organizations that, in the ordinary course of business, management encounters as sources for goods or services or other customary museum transactions. They may not be involved in the selection of suppliers or in the negotiation of fees, prices, or any terms and conditions of sale or exchange. To manage such transactions, the Trustees, Committee members and senior officers provide the Assistant Secretary periodic updates of their activities and those of their Family Members and Affiliates. From this list, the Assistant Secretary maintains a list of related parties for the purpose of arranging a review and approval as provided above. Further, the Audit Committee annually reviews existing related party transactions where not otherwise reviewed by the Board of Trustees or relevant Board Committee.
CODE OF ETHICAL PRACTICES
The Board has approved a Code of Ethical Practices that applies to the Board and all Board, officers, senior management, employees and volunteers. The code is distributed annually.
MUSEUM COLLECTIONS AND ETHICS
While the Museum appreciates that Trustees engage in collecting, no Trustee, Committee member, or senior officer may knowingly compete, directly or indirectly, with the Museum for the purchase of collection items of interest to the Museum.
Trustees, Committee members, senior officers (and their Family Members and Affiliates) are prohibited from purchasing de-accessioned items from the Museum’s collections directly from the Museum or at auction if consigned by the Museum, and the Museum is prohibited from purchasing from such persons for the Museum’s collections except at a price substantially below fair market value, as determined by an independent appraiser chosen by the Museum, and upon terms approved by the Collections Committee.
While loans of items for the Museum’s collections by a Trustee to the Museum can be of great benefit to the Museum, it should be recognized that their exhibition at the Museum can enhance their value. A Trustee, Committee member, or senior officer should not lend a collection item to the Museum or maintain it on loan if he or she is actively planning to sell it.
The relationship between a Trustee and the staff is naturally close and mutually beneficial to the Museum. Nonetheless, Trustees, Committee members, and senior officers should not use their position to obtain unreasonable or excessive services or expertise from the staff of the Museum. Trustees, Committee members, senior officers, their Family Members and Affiliates shall not serve as paid employees of the Museum unless approved in advance by the Board of Trustees.
AMNH COMPLIANCE HELPLINE
The Museum endeavors to maintain high standards of conduct in the fulfillment of its scientific and educational mission. Accordingly, the Museum maintains an 800 telephone line (800-620-5571) that is serviced by an outside firm 24 hours a day, seven days a week, every day of the year to receive confidentially or anonymously information that anyone may suspect as violating the financial integrity, regulatory or legal compliance, or security or safety of AMNH. All such calls and resulting details of investigation and resolution are reviewed by the Audit Committee.
Trustees, Committee members, and senior officers should not share with others confidential information obtained in the course of their duties for the Museum. This includes the briefing materials prepared in advance of meetings, minutes of meetings, discussions which may occur at meetings, and any confidential information regarding the purchase, sale or gifts of items for the Museum’s collections or regarding any other opportunity for the Museum.