Overview

Purpose

The purpose of this Conflict of Interest Policy is to protect the Fellowship’s interests when it is considering taking an action or entering into a transaction that might benefit the private interests of a director or key person.

Why is a policy necessary?

The Fellowship is accountable for proper use of its resources. Directors have a duty to act in the Fellowship’s best interests and may not use their positions for their own financial or personal benefit. Even the appearance of a conflict of interest should be avoided, as it could undermine support for the Fellowship.

To whom does the policy apply?

This policy applies to all directors, officers and key persons.

What is a conflict of interest?

• A conflict or duality of interest concerns a board director or key person who has a barrier that prevents them from being impartial and loyal to the nonprofit organization. Conflicts can arise from personal, professional or volunteer positions or relationships.
• An apparent conflict of interest is a situation that causes an observer or third party to question whether a board director can be objective or impartial because of a competing interest where they may have dual allegiance.
• In situations where there is uncertainty, err on the side of caution and disclose the potential conflict.

Disclosing Potential Conflicts of Interest

• Directors or key persons must disclose to the best of their knowledge all potential conflicts of interest as soon as they become aware of them and always before any actions involving the potential conflict are taken.

Determining Whether a Conflict of Interest Exists

• After there has been disclosure of a potential conflict and after gathering any relevant information from the concerned director or key person, the board shall determine whether there is a conflict of interest.
• In determining whether a conflict of interest exists, the board shall consider whether the potential conflict of interest would cause a transaction entered into by the Fellowship to raise questions of bias, inappropriate use of the Fellowship’s assets, or any other impropriety.
• A conflict always exists in the case of a related party transaction – a transaction, agreement or other arrangement in which a related party has a financial interest and in which the Fellowship or any affiliate of the Fellowship is a participant.

Procedures for Addressing a Conflict of Interest

• When a matter involving a conflict of interest comes before the board, the board may seek information from the director or key person with the conflict prior to beginning deliberation and reaching a decision on the matter. However, a conflicted person shall not be present during the discussion or vote on the matter.
• The Fellowship may not enter into a related party transaction unless, after good faith disclosure of the material facts by the director or key person, the board or a committee authorized by the board determines that the transaction is fair, reasonable and in the Fellowship’s best interests.

Documentation

The minutes of any board meeting at which a matter involving a conflict of interest or potential conflict of interest was discussed or voted upon shall include:

• the name of the interested party and the nature of the interest;
• the decision as to whether the interest presented a conflict of interest;
• any alternatives to a proposed contract or transaction considered by the board; and
• if the transaction was approved, the basis for the approval.

Prohibited Acts

The Fellowship shall not make a loan to any director or officer.