CONFLICTS OF INTEREST

What Constitutes a Conflict of Interest?

A conflict of interest arises when a director or employee involved in making a decision is in the position to benefit, directly or indirectly, from his/her dealings with the Organization or person conducting business with the Organization. (A potential conflict of interest exists when the director or employee, or his/her immediate family {spouse, children, brother, sister and spouses of children, brother or sister} owes/receives more than 1% of the benefiting business/profits.)

Examples of conflicts of interest include, but are not limited to, situations in which a director or employee:

Negotiates or approves a contract, purchase, or lease on behalf of the Organization and has a direct or indirect interest in, or receives personal benefit from the entity or individual providing the goods or services;

Negotiates or approves a contract, sale, or lease on behalf of the Organization and has a direct or indirect interest in, or receives personal benefit from, the entity or individual receiving the goods or services;

Employs or approves the employment of, or supervises a person who is an immediate family member of the director or employee;

Sells products or services in competition with the Organization;

Uses the Organization’s facilities, other assets, employees, or other resources for personal gain;

Receives a substantial gift from a contractor, if the director or employee is responsible for initiating or approving purchases from that contractor.

Disclosure Requirements on Conflict of Interest

A director or employee who believes that he or she may be perceived as having a conflict of interest in a discussion or decision must disclose that conflict to the group making the decision. Most concerns about conflicts of interest may be resolved and appropriately addressed through prompt and complete disclosure.

Therefore, CC Idaho requires the following:

At the inception of employment or volunteer service to the Organization, and on an annual basis thereafter, the accounting department shall distribute a list of all contractors with whom the Organization has transacted business at any time during the preceding year, along with a copy of the disclosure statement to all members of the Board of Directors, the Executive Director, members of senior management, and employees with purchasing and/or hiring responsibilities or authority. Using the prescribed form, these individuals shall inform, in writing and with a signature, the Executive Director and the chair of the Finance Committee, of all potential reportable conflicts.

During the year, these individuals shall submit a signed, updated disclosure form if any new potential conflict arises.

Prior to management, board, or committee action on a contract or transaction involving a conflict of interest, a staff, director, or committee member having a conflict of interest and who is in attendance at the meeting shall disclose all facts material to the conflict of interest. Such disclosure shall be reflected in the minutes of the meeting.

A staff, director, or committee member who plans not to attend a meeting at which he or she has a reason to believe that the management, board, or committee will act on a matter in which the person has a conflict of interest shall disclose to the chair of the meeting all facts material to the conflict of interest. The chair shall report the disclosure at the meeting and the disclosure shall be reflected in the minutes of the meeting.

A person who has a conflict of interest shall not participate in or be permitted to hear management’s, the boards, or the committee’s discussion of the matter except to disclose material facts and to respond to questions. Such person shall not attempt to exert his or her personal influence with respect to the matter.

A person who has a conflict of interest with respect to a contract or transaction that will be voted on at a meeting shall not be counted in determining a quorum for purposes of the vote. The person having a conflict of interest may not vote on the contract or transaction and shall not be present in the meeting room when the vote is taken, unless the vote is by secret ballot. Such person’s ineligibility to vote and abstention from voting shall be reflected in the minutes of the meeting.

If required by Federal awarding agencies, CC Idaho will notify those agencies in writing of any potential conflict of interest. (2 CFR Part 200.112, Conflict of interest)

Resolution of Conflicts of Interest

All real or apparent conflicts of interest shall be disclosed to the Executive Committee and the Executive Director of the Organization. Conflicts shall be resolved as follows:

The Executive Committee shall be responsible for making all decisions concerning resolutions of conflicts involving directors, the Executive Director, and other members of senior management.

The chair of the committee shall be responsible for making all decisions concerning resolutions of conflicts involving Executive/Finance Committee members.

The Vice President of the board shall be responsible for making all decisions concerning resolutions of the conflict involving the chair of the Board of Directors.

The Executive Director shall be responsible for making all decisions concerning resolutions of conflicts involving employees below the senior management level, subject to the approval of the Executive/Finance Committee.

An employee or director may appeal the decision that a conflict (or appearance of conflict) exists as follows:

An appeal must be directed to the chair of the board.

Appeals must be made within 30 days of the initial determination.

Resolution of the appeal shall be made by vote of the full Board of Directors.

Board members who are the subject of the appeal, or who have a conflict of interest with respect to the subject of the appeal, shall abstain from participating in, discussing, or voting on the resolution, unless their discussion is requested by the remaining members of the board.

Disciplinary Action for Violations of this Policy

Failure to comply with the standards contained in this policy will result in disciplinary action that may include termination, referral for criminal prosecution, and reimbursement to the Organization or to the government, for any loss or damage resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any employee charged with a violation of this policy will be afforded an opportunity to explain her/his actions before disciplinary action is taken.

Disciplinary action will be taken:

1. Against any employee who authorizes or participates directly in actions that are a violation of this policy.

2. Against any employee who has deliberately failed to report a violation or deliberately withheld relevant and material information concerning a violation of this policy.

3. Against any director, manager or supervisor who attempts to retaliate, directly or indirectly, or encourages others to do so, against any employee who reports a violation of this policy.

A board member who violates this policy will be removed from the board.