Educational Testing Service

“All Trustees received a copy of Form 990 for review and information prior to Board of Trustees meeting. Form 990 was reviewed by the Board of Trustees' Audit Committee and the full Board of Trustees prior to filing.”

“The Trustees of Educational Testing Service, individually and collectively, are expected to act in accordance with the highest standards of ethical behavior. Annually, the Audit Committee reviews the ETS Code of Ethics for Members of the Board of Trustees. Subsequently, each Trustee receives a copy of the Code of Ethics and signs a statement agreeing to abide by the Code. The Code of Ethics states a clear policy on conflicts of interest. ETS also has a conflict of interest policy that is supplied to the Board of Trustees, officers and key employees. The Trustees annually complete a Trustee Disclosure Statement and a Trustee Affiliation Form. The Disclosure Statement requests if there are any Trustees with material financial interest to which ETS is a party. The Affiliation Form requests information regarding the Trustees employment as a staff member or as a consultant of ETS, as well as their affiliation with other organizations. The Corporate Secretary reviews these disclosures for potential conflicts or the potential appearance of a conflict. Should a situation be disclosed that presents a potential conflict, the Corporate Secretary would seek resolution with the involvement of the appropriate authority such as the Audit Committee or the ETS General Counsel and Chief Ethics Officer. Intrinsic to the policy is a Trustee recusing themselves on certain matters or resigning from the Board to prevent a conflict of interest or avoid an appearance of a conflict of interest. Failure to respond to the annual disclosure process would result in the requisite follow up by the Corporate Secretary. Candidates for Trustees receive general information on relevant ETS policies, such as the Code of Ethics and Conflict of Interest and are required to complete the Affiliations Form prior to standing for election. Trustees can obtain assistance with the interpretation or administration of the Code of Ethics conflicts policy or procedures from the Corporate Secretary or the General Counsel and Chief Ethics Officer. Trustees receive the complete policy statements upon their election. Educational Testing Service requires that employees, including officers, who are uncertain whether an outside activity comes within the scope of ETS's Code of Ethics or Conflict of Interest policy, discuss the matter with their supervisors. Employees wishing to engage in outside activities must submit an Outside Activities Report to their division director for review and approval prior to engaging in the activity. Employees must submit an amended report whenever the activity changes. The report is reviewed and the employee is informed whether the request is approved. The employee's division Vice President and the Vice President of Strategic Workforce Solutions (SWS)(ETS's Human Resources Department) receive a copy of all such reports regardless of whether the request is approved. Any situation involving a potential conflict of interest must be reviewed by SWS to verify that no conflict exists. Any employee who acquires information that gives the employee reason to believe that any employee, officer or trustee is engaged in conduct that is prohibited by ETS's Code of Ethics or subject to ETS's Conflict of Interest policy, or that any sales representative, distributor or other person or firm representing ETS in any transaction is engaged in the type of conduct (whether or not in connection with a transaction involving ETS or its products) which, if engaged in by an employee, would violate this policy is required to report this information immediately. All complaints regarding potential conflicts of interest are investigated promptly, and where necessary, immediate and appropriate action is taken to stop and remedy any such conduct. Any employee or officer, found in violation of this policy will be subject to disciplinary action, up to and including termination, depending upon the severity of the violation. This policy is reviewed on an annual basis by the Vice President”

“ETS engages an external and independent executive compensation consultant organization to review and advise on excess benefit transaction laws and to prepare an annual report and analysis of proposed compensation for ETS's CEO and officers. The analysis includes data on compensation for comparable organizations within similar occupations and functions. The external executive independent compensation consultant also develops a Letter of Reasonableness regarding the analysis of Officer pay consistent with government guidelines which is presented to the Committee on Governance and Human Resources and the Board for review, comment and approval.”

“ETS does not make its governing documents, conflict of interest policy, or financial statements available to the public.”

“Test Admin and Consultants: Program service expenses 396,008,770. Management and general expenses 21,084,491. Fundraising expenses 0. Total expenses 417,093,261. Subcontracting Costs: Program service expenses 133,414,568. Management and general expenses 9,796,090. Fundraising expenses 0. Total expenses 143,210,658.”

“Postretirement benefits -25,068,000. Equity in earnings reported separately 14,034,782.”