Avoiding Conflicts of Interest in the Nonprofit Sector

CharityNet USA offered a helpful article about conflicts of interest regarding nonprofits, which also features additional resources. As the article relates, to help the board of directors understand and avoid conflicts of interest, the board should develop or adopt a written expression of its intentions. Board members should remember that a written code serves as a guideline. It cannot replace careful consideration and an ethical approach. Each member of the Board should be required to acknowledge acceptance of the policy on an annual basis, and the policy should be reviewed at the initiation of all Board meetings. Finally, keep these things in mind to help you assure that your organization does not face potential conflict:

• Full Disclosure to the board - Since when most conflict situations arise only a couple of people in an organization know, full disclosure can establish good faith among boards.
• Distancing Oneself From Potential Conflicts - A Board member should excuse himself from portions of the meeting that may lead to any potential conflict, in addition to abstaining from voting on matters that may pose a conflict.
• Best Interests In the Forefront - Create an arrangement that decides with out ones′ involvement in certain discussions, that the best interests of the organization, not that board member, will be emphasized.
• Compensation - If a board member is compensated in any way by a nonprofit, make sure their pay is either fair market value or less, a common mistake among boards.

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