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Conflicts of Interest Policy

A director, member or employee should be sensitive to any interest he or she may have in a decision to be made by the board of directors, and, insofar as possible, recognize such interest prior to the discussion or presentation of the matter before the board.

When a director, member or employee has a possible conflict of interests, the individual should disclose this information immediately to the board president and secretary. Disclosure should be made in writing or included in board minutes.

Upon disclosure, the board should conduct a disinterested review of the matter. If holding a board meeting is not practical, the Executive Committee -- convened through a conference call if necessary -- will handle the matter. The board member who has the potential conflict of interests will not be privy to the board's or Executive Committee's vote, and thus, will not vote on the matter. The meeting minutes will indicate that the director did not vote and was not present when the vote was taken.

If a director or member has a conflict of interest and does not disclose it to the board, the board may remove that director from the board and the member from the association. An employee may be fired.

Adopted: April 18, 1999

Rationale: This policy is intended to spell out a process for identifying, resolving and monitoring possible conflicts of interest involving directors. Members of the AHCJ board and others associated with the organization have a duty to exercise their powers in the interest of the association, not in their own interest or in the interest of another entity. In other words, a director, member or employee shall not use his or her position for individual personal advantage. This policy ensures that a director, member or employee is conscious of the potential for such conflicts and acts with candor and care in dealing with such situations.

Conflicts of interest are not inherently illegal and they are not to be regarded as a reflection on the integrity of the board or the individual. It is the manner in which the individual and the board deal with a disclosed conflict that determines the propriety of the situation.

Conflicts of interest can arise when an individual has a legal or fiduciary interest in an entity that has a business transaction pending with the AHCJ. This interest can occur directly or indirectly. The individual may be personally involved with a transaction or have an employment relationship with the entity. Or, it may arise from some family relationship. A conflict of interest may result from a director or member performing professional services for the organization. The board should not assume that a conflict cannot exist for a director or member who receives no monetary or other tangible benefit from a transaction with AHCJ.

In dealing with these matters, the board should be guided by three principles: awareness, disclosure and disinterested review.

References

  1. Overton, G. Guidebook for Directors of Nonprofit Corporations. American Bar
    Association, Ch II, VIII, pp 21-39.
  2. Portnoy, F. "Conflicts of Interest Can be Avoided at Nonprofits." Denver Business
    Journal. July 14, 1995 v46 n44 p36A(1).