Introduction
Occasionally, the interest of the organization, and one’s personal interest (or the interest of another entity one represents) come into conflict with one another. If you find yourself in this position, there is a well established and legal way to navigate the conflict so that all involved stay ethically and legally secure. This lesson will outline conflicts of interest and offer solutions for navigating them should they occur.
Definition & Meaning
A conflict of interest occurs when an individual’s personal interests could improperly influence their decisions. In nonprofits, conflicts of interest can involve financial relationships, family connections, or other personal interests that may compromise the organization’s integrity. https://blog.boardsource.org/blog/is-it-time-to-dust-off-your-nonprofits-conflict-of-interest-policy
Conflicts of interest occur when “insiders” get financial gain from a board vote.
Examples of Conflicts of Interest
- The Executive Director is married to or closely related to a board member
- A board candidate is also Executive Director of another organization who’s mission is similar
- A board member is part of a fundraising event that is connected with another organization competing for the same funding
- A board member or a close relative/business partner of a board member provides services without comparative bidding
For more examples and explanations go to https://boardsource.org/resources/conflict-of-interest-examples-and-samples/
Board Members Are Expected To:
- Declare any conflicts of interest
- Read and sign the conflict of interest form
- Abstain from any vote connected to the conflict of interest
- Remove themselves from the meeting by leaving the virtual meeting or leaving the physical room should there be deliberation and/or a vote on the subject creating the conflict of interest
In the event of a board vote on a topic that contains a conflict of interest with one or more board members, secretaries are expected to notate in the minutes how the vote was handled and reflect the vote tally by name. Minutes should mention that the board member(s) with the conflict of interest left the room/virtual meeting.
To learn more, go to https://nonprofitoregon.org/resources/conflicts-of-interest/.