Conflicts of Interest

Our work at Baxter is our first responsibility. A conflict of interest arises when our personal interests or activities influence, or appear to influence, our ability to act in the best interests of Baxter. Entering into an arrangement that conflicts with your responsibility to Baxter must be avoided. Some situations that could cause a conflict of interest include:

• Doing business with relatives.
• Having a financial interest in another company in our industry.
• Taking a second job.
• Managing your own business.
• Serving as a director of another business.
• Being a leader in some organizations.
• Having a relative work at Baxter.

 

We must disclose actual or potential conflicts of interest and discuss them with management. Any activity that is approved, despite the actual or apparent conflict, must be documented.

A conflict of interest may arise if relatives work for a supplier, a customer or Baxter competitor. It also may be a conflict if a relative has a "significant financial interest" in a supplier, customer or competitor of Baxter. A "significant financial interest" is defined in the "Ownership in Other Businesses" policy of this document. Before doing business with an organization in which a relative works or has a "significant financial interest," disclose the situation to your business unit manager and discuss it with them. Document the approval if it is granted.

 

"Relatives" include your:

• Spouse
• Domestic partner
• Brothers or sisters 
• Parents 
• Grandparents
• Grandchildren
• Aunts or uncles
• Nieces or nephews
• First cousins
• In-laws  
• Children 
• Corresponding in-law, "half," or "step" relations 

Conflicts of interest arise when an employee reports to a relative.  Conflicts of interest also may arise if relatives work in the same department.  Additionally, conflicts of interest may arise if a member of Baxter's board of directors or a Baxter corporate officer has a relative working in the company.  Conflicts of interest can even arise with close friends who work in the same department, or when non-employee relatives provide products or services to the company.

 

Baxter may permit the employment of relatives under the guidelines of the "Employment of Relatives Policy" as long as such employment does not, in Baxter's opinion, create actual or perceived conflicts of interest.

 

We must disclose actual or potential conflicts of interest and discuss them with management.  Any activity that is approved, despite the actual or apparent conflict, must be documented.

Any outside activity must be totally separate from company work. This includes a second job or self-employment. We should not use company time or other employee's services for outside activities unless management specifically authorizes it. For example, we may be permitted to do certain volunteer work on company time.

Our investments can cause a conflict of interest. We should not own, directly or indirectly, a "significant financial interest" in any company that does business with Baxter. An investment in a competitor, or in companies that seek to do business with Baxter, also can be a conflict.

 

Two tests determine if a "significant financial interest" exists:

• The employee or "relative" owns more than 1% of the outstanding capital of a business.
• The investment represents more than 5% of the total assets of the employee or "relative."

Investments that cause a conflict of interest are prohibited. Exceptions require written approval from your business unit's legal counsel.

Serving as a director of another corporation may create a conflict of interest. Being a director or on a standing committee of some organizations, including government agencies, also may create a conflict. A conflict of interest may exist if the board service is an assigned part of your job or if the board service is unrelated to your job.

 

Before accepting an appointment to the board or a committee of any organization whose interests may conflict with Baxter's, discuss it with your supervisor. Obtain approval from the General Counsel or Corporate Secretary before accepting an appointment for which you will be paid. Consult with the General Counsel or Corporate Secretary for additional information.