Conflict-of-Interest Policy for Directors, Officers, and Employees
1. Scope. The following statement of policy applies to each member of the board, to each officer of Independent Sector, and to all persons employed by Independent Sector, regardless of position.
2. Responsibility. Directors, officers, and staff serve the public interest and thus have a clear obligation to the concept that all decisions of the board, officers, and employees of Independent Sector are to be made solely on the basis of a desire to promote the best interests of the organization and the public good.
Individuals inevitably are involved in the affairs of other institutions and organizations. Effective boards and organizations will include individuals who have relationships and affiliations that may raise questions about perceived conflicts of interest. Although many such potential conflicts are and will be deemed inconsequential, every director, officer and key employee has the responsibility to ensure the entire board is made aware of situations that involve personal, familial, or business relationships that could create a real or perceived conflict of interest. Thus, the board requires each director, officer and key employee annually (a) to be familiar with the terms of this policy; (b) to disclose to the board chair any possible personal, familial, or business relationships that reasonably might give rise to a conflict involving Independent Sector; and (c) to acknowledge by his or her signature that he or she is in accord with the letter and spirit of this policy.
3. Disclosure of Conflicts With Respect to Potential Financial Transactions. In the event any financial transaction involving Independent Sector also involves (a) a director, officer, employee or a member of their family, or (b) an organization with which any director, officer, or employee of IS has a direct or indirect financial interest, the director, officer, or employee having the affiliation or interest, at the first knowledge of the transaction, shall disclose fully the precise nature of the interest or involvement.
4. Disclosure Statement. Each board member, officer, and key employee of Independent Sector shall be requested annually by Independent Sector to submit a disclosure statement describing the nature of any direct or indirect business transactions with Independent Sector during the year, including those ongoing from prior years. In the event there is any material change in the information contained in any disclosure statement, the person who submitted it shall promptly submit written notification of the change.
A director, officer, or employee is deemed to be affiliated with any organization that may be potentially related to the financial operation of Independent Sector (a) of which he or she, or a member of his or her family, is a director, officer, trustee, partner, employee, or agent; or (b) in which he or she or members of his or her family receive direct financial benefit from sales or services; or (c) in which he or she individually or in combination with members of his or her family have a 5 percent or greater interest.
The term family shall be deemed to include an individual’s spouse and children (including legally adopted children), and members of that individual’s household, parents, grandparents, great grandparents, siblings (whether by whole or half-blood), spouse of that individual’s siblings, children, grandchildren and great grandchildren and members of that individual’s household.
In no way should this policy be interpreted to imply that directors, officers, or employees should reveal any political, religious, ethnic, fraternal or civic affiliations.
5. Administration. All disclosures required under this policy and amendments thereto, if by directors, shall be directed in writing to the chair of the board, or if by employees, to the President. The chair of the board and the president shall be responsible for the administration of this policy. Issues under this policy concerning directors and officers shall be reported initially to the chair of the board for appropriate action; those concerning staff shall be referred initially to the President. Information disclosed under this policy shall be held in confidence by the persons authorized to receive and act upon it except where, in the judgment of any of such persons, the best interest of the organization requires further disclosure. This review process shall be reported annually to the board by the chair.
6. Restraint on Participation. A director or officer who has declared or has been found to have a conflict-of-interest in any proposed transaction or other matter shall refrain from participating in consideration of the proposed transaction or other matter, unless for special reasons the Board of Directors requests information or interpretation from the person or persons involved. In the case of a director, he or she shall not vote on the matter in question and shall not be present at the time of the vote. With respect to restraint on participation by staff, the president, or, where applicable, the chair shall take such action as is necessary to assure that the transaction is completed in the best interests of Independent Sector without the substantive involvement of the person who has the possible conflict-of-interest.
7. Advance Determinations. Any board member who is uncertain about a possible conflict-of-interest in any matter may request the Executive Committee to determine whether a conflict in fact exists; the Executive Committee shall resolve the question by majority vote. If required, the question of potential conflict may be referred to counsel for an opinion prior to the Executive Committee vote.
Amended: December 5, 2006
Amended: December 7, 2011
Re-adopted: April 25, 2019
Please download the full PDF file to access our IRS Form 990 Annual Questionnaire for Officers, Directors and Key Employees Regarding Independent Directors and Business and Family Relationships