Carilion Clinic

“Carilion Clinic has an Executive Committee authorized to act when the Board is not in session. The Executive Committee has 8 members, made up of the Chair of the Board, the CEO, the Chairs of each of the 5 standing committees, and the Chair of the Board of Carilion Medical Center, which is the organization that holds the flagship hospital. The Executive Committee meets during the months the full Board does not meet and can act on behalf of the Board, except it cannot elect directors or take extraordinary actions, such as a sale, merger, or dissolution of the corporation.”

“1. Nancy Howell Agee, Abney S. Boxley, III and Raymond D. Smoot, Jr. Ph.D. - Business relationship due to each serving on the Board of the same unrelated company. 2. Nancy Howell Agee, James M. Turner, Jr. and Danielle H. Yarber - Business relationship due to each serving on the Board of the same unrelated company. 3. Nancy Howell Agee, Jeanne S. Armentrout, John A. Bond, Lauren J. Chen, Nicholas C. Conte, David S. Hagadorn, Donald B. Halliwill, Melina D. Perdue, G. Robert Vaughan, Jr., Patrice M. Weiss, and Daniel R. Jones, M.D. Business relationship due to each serving as officers, directors, and/or employees of the same related organizations.”

“Certain management and related services for the organization are provided by the management and employees of Carilion Services, Inc., a related organization to the filing organization. Compensation of the following individuals listed in Part VII, Section A was provided by Carilion Services Inc.: Nancy Howell Agee, Briggs Andrews, Jeanne Armentrout, Lauren Chen, Thomas Denberg, David Hagadorn, Donald Halliwill, Donald Lorton, Edward Murphy, Melina Perdue, G. Robert Vaughan, Patrice Weiss.”

“The filing organization's Articles of Incorporation and Bylaws were revised to update and clarify provisions concerning the election, qualification, and removal of its directors and officers. In addition, its Articles of Incorporation were amended to remove from its supported organizations Bedford Memorial Hospital (EIN 54-0566100), an entity which it no longer owns or controls.”

“The Form 990 was prepared by Carilion's internal tax department with input from various Carilion departments as applicable, and reviewed by internal Accounting management and an outside CPA firm. A draft copy of the Form 990 was posted on our Board portal, which is the mechanism used to disseminate meeting materials to the directors, in advance of the Carilion Clinic Board of Directors Audit Committee's August meeting. The CFO reviewed the Form 990 with Committee members and answered questions at that meeting. All Board Members were notified via email that the final Form 990 was posted on our Board portal several days prior to filing and were encouraged to call with any questions they might have.”

“Our organization monitors and reviews proposed and current transactions for conflicts of interest in a variety of ways. At the governing board level, we have board members complete an initial (upon appointment) and annual conflict of interest questionnaire to disclose actual or potential conflicts. Board members are required to update their disclosure as needed in between questionnaires. All disclosures are reviewed by the Organizational Integrity & Compliance Office and as needed escalated to the appropriate leaders/board members for further discussion/review. If a disclosure is viewed as an actual or potential conflict, an action is recommended to the Audit & Compliance Committee of the Carilion Clinic Board and implemented as approved. Actions can include recusal in discussion/voting at board meetings, limitation/termination of the transaction, removal from board appointment or other appropriate controls. In addition, at any time, board members are encouraged to disclose any potential conflicts as they arise at a board meeting and to recuse themselves as deemed appropriate. The same process takes place as described above for key employees (upon hire and annually thereafter), including all Officers, members of the management team, physicians/mid-level practitioners, pharmacists and key supply chain buyers. After review and further discussion as needed, action may be required to manage an actual conflict or to reduce the appearance of such as approved by Organizational Integrity & Compliance Office and other key management team members. As needed, the governing board leaders are notified of any conflicts which may impact board proceedings.”

“Executive compensation is reviewed annually by the Carilion Clinic Board of Directors Compensation Committee. This Committee is made up of Board Members of Carilion Clinic who do not have a conflict of interest with any of the executives being reviewed. With respect to Carilion Clinic, the Compensation Committee reviews the compensation of the Board of Governors annually, which includes the President and Chief Executive Officer, Executive Vice Presidents, Chief Financial Officer, Chief Medical Officer, select Senior Vice Presidents, and physician Chairs of the Clinical Departments. This review was performed in November 2015 and September 2016. For the fiscal year covered by this return, the Compensation Committee also used the same process to review the compensation of all Senior Vice Presidents and other Disqualified Individuals, including the Hospital Vice Presidents. These reviews were performed in September and November 2015, and September 2016, respectively. In addition, the Compensation Committee annually reviews the compensation philosophy for all executive leaders, which includes Vice Presidents, Senior Vice Presidents, Executive Vice Presidents, and the CEO as well as all the compensation philosophy for employed physicians and physicians in leadership roles. This review included review of a comprehensive report from an outside compensation consultant specializing in healthcare organizations for select positions and the prior year's report on all of the reviewed positions. The reports reviewed by the Committee included a detailed comparison of total compensation and each element thereof, including base salary, bonuses and other cash compensation, and benefits, including deferred and retirement benefits. Compensation was compared to both a national and regional peer group of organizations similar in size and structure to the organization, which list was reviewed by the Compensation Committee. The Compensation Committee maintained detailed minutes of its meetings, setting forth the deliberations and decisions of the Committee regarding the compensation of these executives.”

“The organization's governing documents, conflict of interest statement and financial statements are not generally available to the public, but are released from time to time upon request. The Articles of Incorporation are available from the Virginia State Corporation Commission. The consolidated audited financial statements of Carilion Clinic and of the Obligated Group are released annually to the local newspaper. Limited financial information is available on our website.”

“1099s are issued on Carilion Clinic's behalf by Carilion Services, Inc., a related organization providing management and administrative services, including payment processing.”

“Housekeeping: $1,276,718 Repairs/ Maintenance: $1,717,314 Contract Fees/ Consulting/ Purchased Services: $278,620 Total Other Services, Column B: $3,272,652”

“Transfer from Affiliates 76,530. Donated Rent -23,838. Unrelated investment income 219,704.”