I. Application of Policy
This policy is intended to supplement, but not replace, federal and state laws governing conflicts of interest applicable to nonprofit corporations (NPC). It applies to board members and staff with significant decision-making authority. Persons covered under this policy, as well as their relatives and associates, are hereinafter referred to as “interested parties.”
II. Conflict of Interest
A conflict of interest may exist when the interests or concerns of an interested party may be seen as competing with the interests or concerns of NEWH, INC. There are varieties of situations that raise conflict of interest concerns including, but not limited to, the following:
Financial Interests – A conflict may exist where an interested party directly or indirectly benefits or profits as a result of a decision, policy or transaction made by NEWH, INC. Examples include situations where:
- NEWH, INC. contracts to purchase or lease goods, services, or properties from an interested party.
- NEWH, INC. offers employment to an interested party, other than a person who is already employed by NEWH, INC.
- An interested party is provided with a gift, gratuity, or favor of a substantial nature from a person or entity that does business or seeks to do business with NEWH, INC.
- An interested party is gratuitously provided use of the facilities, property, or services of NEWH, INC.
- NEWH, INC. adopts a policy that financially benefits an interested party.
Other Interests – A conflict also may exist where an interested party obtains a non-financial benefit or advantage that he/she would not have obtained absent his/her relationship with NEWH, INC. Examples include where:
- An interested party seeks to make use of confidential information obtained from NEWH, INC. for his/her own benefit (not necessarily financial) or for the benefit of another interested party.
- An interested party seeks to take advantage of an opportunity or enables another interested person or other organization to take advantage of an opportunity that he/she has reason to believe would be of interest to NEWH, INC.
- NEWH, INC. adopts a policy that provides a significant non-financial benefit to an interested party.
III. Disclosure of Potential Conflicts of Interest
An interested party is under a continuing obligation to disclose any potential conflict of interest as soon as it is known or reasonably should be known.
An interested party shall complete the Questionnaire attached as Appendix A to fully and completely disclose the material facts about any potential conflicts of interest. The disclosure statement and Affirmation of Compliance (Appendix B) shall be submitted upon his/her association as a board member of NEWH, INC. or one of it’s chapters, and shall be reviewed annually thereafter by the board member. An additional disclosure statement shall be filed whenever a potential conflict arises.
Disclosure statements will be submitted as follows. For board members, the disclosure statements shall be provided to the President of the board. The President’s disclosure statement shall be provided to the Secretary of the board or its equivalent. Copies also shall be provided to the Executive Director of NEWH, INC.
In the case of staff with significant decision-making authority, the disclosure statements shall be provided to the Executive Director of NEWH, INC. In the case of the Executive Director, the disclosure statement shall be provided to the President of the Board.
In all cases, the recipient is the designated reviewing official responsible for bringing potential conflicts to the attention of the appropriate authorities. The recipient shall provide the Secretary of the Board of Directors copies and they shall file copies of all disclosure statements with the official corporate records of NEWH, INC.
IV. Procedures for Review of Potential Conflicts
Whenever there is reason to believe that a potential conflict of interest exists the Board of Directors shall determine the appropriate response. This shall include, but not necessarily be limited to, invoking the procedures described below with respect to a specific proposed action, policy, or transaction. The designated reviewing official has a responsibility to bring a potential conflict of interest to the attention of the board promptly for action at the next regular meeting of the board or during a special meeting called specifically to review the potential conflict of interest.
Where the potential conflict involves an employee of NEWH, INC. other than the Executive Director, the Executive Director shall be responsible for reviewing the matter and may take appropriate action as necessary to protect the interests of NEWH, INC. The Executive Director shall report to the President the results of any review and the action taken. The President shall determine whether any further board review or action is required.
V. Procedures for Addressing Conflicts of Interest
Where a potential conflict exists between the interests of NEWH, INC. and an interested party with respect to a specific proposed action, policy or transaction, the Board of Directors shall consider the matter during a meeting of the board. NEWH, INC. shall refrain from acting until such time as the proposed action, policy, or transaction has been approved by the disinterested members of the Board of Directors of NEWH, INC. The following procedures shall apply:
An interested party who has a potential conflict of interest with respect to a proposed action, policy, or transaction of the corporation shall not participate in any way in, or be present during, the deliberations and decision-making vote of NEWH, INC. with respect to such action, policy, or transaction. However, the interested party shall have an opportunity to provide factual information about the proposed conflict and/or action, policy or transaction. Also, the board may request that the interested party be available to answer questions.
The disinterested members of the Board of Directors may approve the proposed action, policy, or transaction upon finding that it is in the best interests of NEWH, INC. The board shall consider whether the terms of the proposed action, transaction, or policy are fair and reasonable to NEWH, INC. and whether it would be possible, with reasonable effort, to find a more advantageous arrangement with a party or entity that is not an interested party.
Approval by the disinterested members of the Board of Directors shall be by vote of a majority of directors in attendance at a meeting at which a quorum is present. An interested party shall not be counted for purposes of determining whether a quorum is present, or for purposes of determining what constitutes a majority vote of directors in attendance.
The minutes of the meeting shall reflect that the conflict disclosure was made to the board, the vote taken and, where applicable, the abstention from voting and participation by the interested party. Whenever possible, the minutes should frame the decision of the board in such a way that it provides guidance for consideration of future conflict of interest situations.
VI. Violations of Conflict of Interest Policy
If the Board of Directors has reason to believe that an interested party has failed to disclose a potential conflict of interest, it shall inform the person of the basis for such belief and allow the person an opportunity to explain the alleged failure to disclose.
If the board decides that the interested party has in fact failed to disclose a possible conflict of interest, the board shall take such disciplinary and corrective action as the board shall determine.