Conflict of Interest Policy — DRAFT¶
Status: Draft. Required for IRS Form 1024 and good governance. Counsel review required before adoption. All directors, officers, and key employees must sign annually.
1. Purpose¶
The purpose of this policy is to protect the Guild's interest when contemplating any transaction or arrangement that might benefit the private interest of an officer, director, or key employee.
2. Definitions¶
Interested person. Any director, officer, or key employee with a direct or indirect financial interest, as defined below.
Financial interest. A person has a financial interest if they have, directly or indirectly through business, investment, or family:
a. An ownership or investment interest in any entity with which the Guild has or is negotiating a transaction or arrangement; or b. A compensation arrangement with the Guild or with any entity with which the Guild has or is negotiating a transaction or arrangement; or c. A potential ownership, investment, or compensation arrangement with any entity or individual with which the Guild is negotiating.
A financial interest is not necessarily a conflict of interest. A conflict of interest exists only when the board determines that one exists.
3. Procedures¶
3.1 Duty to disclose¶
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.
3.2 Determining whether a conflict of interest exists¶
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, the interested person shall leave the meeting. The remaining board or committee members shall decide if a conflict of interest exists.
3.3 Procedures for addressing the conflict¶
a. The Chair shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. b. After exercising due diligence, the board or committee shall determine whether the Guild can obtain a more advantageous transaction with reasonable efforts from a person or entity that would not give rise to a conflict of interest. c. If a more advantageous transaction is not reasonably possible, the board or committee shall determine by majority vote of the disinterested directors whether the transaction is in the Guild's best interest, for its own benefit, and whether it is fair and reasonable.
3.4 Violations¶
If the board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member and afford an opportunity to explain. If, after hearing the response, the board or committee determines the member has failed to disclose, it shall take appropriate disciplinary and corrective action.
4. Records of proceedings¶
The minutes of the board and all committees with board-delegated powers shall contain:
a. The names of persons who disclosed or were found to have a financial interest, the nature of the financial interest, action taken to determine whether a conflict existed, and the board's or committee's decision. b. The names of the persons present for discussions and votes, the content of the discussion, and a record of any votes.
5. Compensation¶
A voting member of the board who receives compensation from the Guild for services is precluded from voting on matters pertaining to that member's compensation.
6. Annual statements¶
Each director, officer, and key employee shall annually sign a statement affirming they have received, read, and agree to comply with this policy and that they understand the Guild is a 501©(6) and must engage primarily in activities that accomplish its exempt purposes.
7. Periodic reviews¶
To ensure the Guild operates consistent with its exempt purpose, periodic reviews shall be conducted covering:
a. Whether compensation arrangements are reasonable and the result of arm's-length bargaining. b. Whether partnerships, joint ventures, and arrangements with third parties further the Guild's exempt purpose, do not result in inurement, and do not result in private benefit beyond what is incidental.