Sample Conflict of Interest Policy

Board Café

Sample Conflict of Interest Policy

The Electronic Newsletter Exclusively for Members of Nonprofit Boards of Directors

Short enough to read over a cup of coffee, the Board Café offers a menu of ideas, information, opinion, news, and resources to help board members give and get the most out of board service. Co-published by CompassPoint Nonprofit Services (formerly the Support Center for Nonprofit Management) and the National Center for Nonprofit Boards. Executive Chef / Writer: Jan Masaoka. January 14, 2000. Vol. 4, No. 1



 

A HAPPY NEW YEAR TO ALL OF US.

I am happy to announce that one of the Board Café's co-publishers-the Support Center/NDC-has changed its organizational name to CompassPoint Nonprofit Services. At CompassPoint we think this new name helps complete the merger which created our current organization, and also represents our commitment to helping nonprofits find their own bearings, map their own futures, and lead change in their communities. I hope the Board Café is the kind of practical, high quality tool that reflects CompassPoint's mission. (For more see our website at http:/www.compasspoint.org. In a future issue I'll share some of the thrills and chills of changing an organization's name.) - Jan Masaoka



 

BOARD CAFÉ READERS ROCK!

Wow . . . 1,020 readers responded to the Board Café Readers Survey. Here are some of the findings: There are Board Café readers in all 50 US states and in 14 countries. The average reader is on 1.7 nonprofit boards, and more than half of you are board officers. Two thirds of you pass along the Board Café to at least one other person, usually to seven others (example: executive directors and board presidents subscribe and pass the Board Café out at board meetings). Nearly all of you took the time (thank you!) to suggest topics for future issues and make "thumbs up" and "thumbs down" comments. Everyone seems to like Board Café's length and short items, and your enthusiasm was very much appreciated by all of us who work on it. Some sample comments: "I love the brevity of the Board Café and all the wonderful suggestions . . . gets us thinking." "When we conducted our ED evaluation, we used the model in the Board Café as the basis." "I appreciate that there's always a touch of humor." "I like the reader submissions." "More international content." "Can you try to address Canadian issues, too?" "I've never been a board member before, and I find all of it useful." "Thanks for keeping fax as an option [for subscribing]." And how do Board Café readers take their coffee? 27% take it black, 21% with sugar and cream, 20% with cream only, only 4% with sugar only, and 24% of you don't drink coffee at all. In the coming months we'll try to incorporate many of the suggestions and comments into the Board Café's content. Thanks so much to all of you for your responses and your thoughts..

GO TO A BOARD MEETING, BUY EGGS

Hidden Villa, an environmental education nonprofit in Silicon Valley, sells eggs from their hens at board meetings at $2/dozen. Board members not only enjoy eating the eggs, but it gives them a small gift they can give others that's also a conversation starter about Hidden Villa. Does your organization sell small items made by clients or through a gift shop? If so, consider choosing a few to make available for board members to purchase at the next board meeting.

FREE BOOKLET ON DOMESTIC PARTNER BENEFITS AND MORE

If you've been thinking that your organization should offer domestic partner benefits to staff, but have questions about containing costs and what criteria should be used, there's a terrific free resource from the Working Group on Funding Lesbian and Gay Issues: "Expanding Opportunities: A Grantmaker's Guide to Workplace Policies for Lesbian, Gay and Bisexual Staff." Although its main audience is foundations, the excellent analysis and sample policies are applicable to most nonprofits, and address issues related to heterosexual staff as well. Especially useful are the sample policies from Chevron, IBM, the MacArthur Foundation and others on equal employment, sexual harassment, and affirmative action. This 52-page booklet is free from the Working Group: (email) info@workinggroup.org or (website) http://www.workinggroup.org.



This month's "Main Course" at the Board Café:

Sample Conflict of Interest Policy

by Jan Masaoka

 

At some point, most boards confront tension or conflict between the interests of the organization and the interests of an individual board member. For example, if your organization is hiring a new bookkeeper and the board president recommends his sister, other board members may (and should) question whether this is appropriate. On one hand, the board president's sister is an experienced bookkeeper who, because of her personal connection to the organization, will be particularly committed to the work. On the other hand, the executive director may be reluctant to supervise the board president's sister.

Conflicts of interest are difficult to weigh and balance because the relationships between board members and the community also are a part of the contribution that board members make to the agency. If the organization is buying a new computer, for example, and a board member owns a computer store, the organization may well benefit from discounts and extra service by buying the computer at her store. It would be a mistake to prohibit working with board members as vendors. Similarly, board members who are also clients of the organization can be tremendously helpful in ensuring that a client perspective is brought into decision-making, but a client board member may find himself in a difficult position if the agency is considering eliminating a service that is used by very few clients other than himself. In many cases, the perceived conflict of interest may simply "feel wrong" to some board members, although it might be within legal boundaries.

Three simple safeguards can go a long way towards preventing and avoiding conflicts of interest. First, establish a policy related to conflict of interest which is signed by all board members when they join the board. The statement can be a simple declaration or require detailed information about the board members' financial interests. Second, establish disclosure as a normal practice. Board members should find it customary for someone to announce, for example, "I have started to date the Clinic Director and, as a result, feel that I must resign from the board. I would like to continue as a member of the Fundraising Committee, but not as a board member." In another situation a board president might say, "This next agenda item relates to joining a collaboration with other children's agencies. I'm going to ask board members who are also on one of these other boards to identify themselves and participate in the discussion, but I will excuse them from the room for part of the discussion and for the vote." Such disclosures should be recorded in the meeting's minutes.

Perhaps even more than written policies, board and staff leadership must establish by example and attitude an atmosphere of personal integrity. Some situations may need only a brief, informal comment to maintain that climate (example: "I know it's only $24 but it's important to keep our finances straight"). In others, a decision may be delayed because of the need to ensure that it has been made in the organization's best interests. Each of us, by our daily words and actions, contributes to a culture of integrity and responsibility.

Sample Conflict of Interest Policy

The standard of behavior at the ____ Organization is that all staff, volunteers, and board members scrupulously avoid conflicts of interest between the interests of the ____ Organization on one hand, and personal, professional, and business interests on the other. This includes avoiding potential and actual conflicts of interest, as well as perceptions of conflicts of interest.

I understand that the purposes of this policy are to protect the integrity of the ____ Organization's decision-making process, to enable our constituencies to have confidence in our integrity, and to protect the integrity and reputations of volunteers, staff and board members. Upon or before election, hiring or appointment, I will make a full, written disclosure of interests, relationships, and holdings that could potentially result in a conflict of interest. This written disclosure will be kept on file and I will update it as appropriate.I understand that the purposes of this policy are to protect the integrity of the ____ Organization's decision-making process, to enable our constituencies to have confidence in our integrity, and to protect the integrity and reputations of volunteers, staff and board members. Upon or before election, hiring or appointment, I will make a full, written disclosure of interests, relationships, and holdings that could potentially result in a conflict of interest. This written disclosure will be kept on file and I will update it as appropriate.

In the course of meetings or activities, I will disclose any interests in a transaction or decision where I (including my business or other nonprofit affiliations), my family and/or my significant other, employer, or close associates will receive a benefit or gain. After disclosure, I understand that I will be asked to leave the room for the discussion and will not be permitted to vote on the question.

I understand that this policy is meant to supplement good judgment, and I will respect its spirit as well as its wording.

Signed: Date:

This section on conflict of interest is taken from "Boardroom Dancing", a handbook for nonprofit boards written by Jan Masaoka and Jude Kaye of CompassPoint Nonprofit Services, available February 2000.



You are reading the BOARD CAFÉ, published monthly by CompassPoint Nonprofit Services (formerly the Support Center for Nonprofit Management) and the National Center for Nonprofit Boards. CompassPoint: 706 Mission Street, 5th Floor, San Francisco, CA 94103; (phone) 415-541-9000; (fax) 415-541-7708; Silicon Valley office: 1922 The Alameda, San Jose, CA 95126; (phone) 408-248-9505; (fax) 408-248-9504; (e-mail) boardcafe@compasspoint.org , (website) http://www.compasspoint.org . National Center for Nonprofit Boards: 1828 L Street NW, Ste. 900 , Washington, D.C. 202-452-6262 email info@ncnb.org ; website http://www.ncnb.org We welcome your comments and contributions to the BOARD CAFÉ.

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