Article 1 – Purpose
The purpose of the conflict of interest policy is to protect the Organization’s interest when it is contemplating entering into a contract, transaction or arrangement that might benefit the private interest of an employee, independent contractor, officer or director of the Organization, or might result in a possible excess benefit transaction under the Internal Revenue Code. This policy is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit and charitable organizations.
Any employee, independent contractor, director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.
A person has a financial interest if the person has, directly or indirectly, through business, profession, investment, or family:
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
A conflict of interest exists when the interests of an interested person have the potential to be at odds with the best interests of the Organization. The interested person’s interests may be personal (for example, the consideration of a family member for employment) or professional (such as affiliation with a potential supplier to the association). A financial interest is not necessarily a conflict of interest. Under Article 4, Section 3, a person who has a financial interest may have a conflict of interest only if the appropriate governing board, committee or decision maker decides that a conflict of interest exists.
Interested persons may have interests in conflict with those of the Organization. The duty of loyalty requires that a director, officer or employee be conscious of the potential for such conflicts at all times and act with candor and care in dealing with such situations. Conflicts of interest involving an interested person are not inherently illegal, nor are they to be regarded as a reflection on the integrity of the interested person, Board of Directors, or the Organization. It is the manner in which the interested person, and those making decisions for the Organization, deal with a disclosed conflict, that determines the propriety of the transaction.
An interested person should be sensitive to any interest they may have any decision to be made and, as far as possible, recognize such interest prior to the discussion or presentation of such a matter before the Board of Directors or other decision making entity or person When an interested person has an interest in a transaction being considered, the interested person should disclose the conflict at the earliest time practical before a decision is made on the matter. Upon disclosure by the interested person, the decision making entity or person should provide a disinterested review of the matter as described in this policy.
Sometimes, the Organization may decide to choose to deal with an inside supplier of goods or services (i.e., involving an interested person) because of familiarity with the supplier’s reliability or for another reason. Although such association with an interested person or their business or family in providing services may result in extra benefits for the Organization, the record of the decision must show that the best interests of the Organization were the overriding consideration in deciding to use such a supplier.
In the case of interested persons who are employees or independent contractors, the same procedures described below as to directors and committee members apply, except it is the interested person’s supervisor or the Executive Director to whom disclosure must be made, and who must deal with the disclosed conflict, not the directors and members of committees with governing board delegated powers. The person’s supervisor or the Executive Director, as appropriate, shall then make such disclosures of the conflict that are proper, to the directors and members of committees.
In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement. The officer presiding over the meeting has a duty and is
expected to make inquiry if any such conflict appears to exist and the affected board member has not made it known.
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, they shall leave the governing board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining board or committee members shall first decide if a conflict of interest exists, and if one does exist, the rest of this article applies. If a conflict does not exist, the interested person shall resume normal participation in the meeting.
The remaining board or committee members shall follow the following procedures if a conflict of interest exists:
If a member of the Board of Directors or committee suspects a violations of the Conflicts of Interest Policy, they must bring the matter to the attention to the board or committee, which shall deal with it as follows:
disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
The minutes of the governing board and all committees with board delegated powers shall contain:
The following policies apply to compensation-related matters:
Each employee, independent contractor, director, principal officer and member of a committee with governing board delegated powers shall annually sign and any potential director before election shall sign a statement that affirms such person:
To ensure the Organization operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, the Board of Directors or its designee(s) shall conduct periodic reviews. The periodic reviews shall take place at least biennially, and, at a minimum, include the following subjects:
When conducting the periodic reviews as provided for in Article 8, the Organization may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews are conducted.
Approved by the Board of Directors on May 13, 2019
Signature by Board Secretary Dr. Sheri Smith on May 13, 2019