(Adopted by ICSC Board of Directors on 5-8-09)
The purpose of the International Catholic Stewardship Council (ICSC) Conflict of Interest Policy is to remain in compliance with applicable federal law and the laws of the District of Columbia regulating nonprofit organizations. It also seeks to ensure the highest standards of integrity, ethical behavior and public responsibility as assumed by Christian stewardship’s principles of accountability and transparency; two of ICSC’s strategic imperatives.ICSC recognizes the inherent right of its board members and staff to engage in outside interests and private enterprise, and ICSC does not wish to impede these activities. However, under federal law, the laws of the District of Columbia that govern nonprofits, and ICSC’s bylaws, an ICSC board member embraces a special obligation: a legal obligation to exercise fiduciary responsibilities to the organization. These fiduciary duties include a duty of loyalty; a duty that requires board members to act in the best interest of ICSC and not for personal or third-party gain, personal promotion for commercial interests, or financial enrichment for the board member or for third parties. When this duty of loyalty is compromised in any way, a conflict of interest may arise or exist. It is the policy of ICSC to avoid all such actual or potential conflicts of interest.
1. What is a conflict of interest? A conflict of interest arises when a board/staff member has a personal interest that conflicts or is perceived to conflict with the interests of ICSC or arise in situations where a board/staff member has or appears to have divided loyalties between ICSC and another business or organization that the individual is involved in (also known as a “duality of interest”).
Conflicts of interest have the potential of resulting in situations that lead to inappropriate financial gain to persons in authority at ICSC. This can lead to financial penalties and violations of IRS regulations. Similarly, situations or transactions arising out of a conflict of interest can result in the appearance of a lack of integrity in the ICSC board decision-making process. Both results are damaging to ICSC and are to be avoided.
For the purpose of this policy, a “conflict of interest” is defined as a situation or apparent situation in which an individual decision-maker has any impediment to being impartial and loyal, such as: (1) a personal, professional, business or volunteer position, responsibility, or interest; or 2) a conflicting duty to another entity where the individual’s allegiance may be split between ICSC and another organization. An apparent conflict of interest is defined as a situation or relationship that may cause a casual observer to question whether there is an impediment to impartiality.
2. Who might be affected by this policy?The policy generally governs the activities of ICSC board and committee members and staff. In some cases a major donor, consultant or associate member might be in a conflict situation. ICSC takes a broad view of conflicts and board, committees and staff are urged to think of how a situation/transaction would appear to outside parties when identifying conflicts or possible conflicts of interest.
3. Disclosure of Conflicts.Board members and staff will annually disclose and promptly update any disclosures previously made on an Annual Conflict Disclosure Form provided by ICSC that requests them to identify their interests that could give rise to conflicts of interest, such as affiliations with other businesses and/or organizations including other nonprofit organizations. Such information may be used by ICSC in its continuing efforts to avoid, or otherwise properly manage conflicts of interest.
Board members and staff are also urged to disclose conflicts as they arise as well as to disclose those situations that are evolving that may result in a conflict of interest. Advance disclosure must occur so that a determination may be made as to the appropriate plan of action to manage the potential conflict of interest. Board members should disclose to the board’s executive committee and executive director as soon as the person with the potential conflict is aware of it or that the appearance of a conflict exists.
4. Procedures to manage conflicts.For all ICSC board and committee members, staff and other leadership positions as may be designated by ICSC or its executive committee from time to time, if a potential conflict of interest is raised, whether actual, apparent or perceived at such time as any discussion, vote, decision-making or other consideration related to ICSC is taking place, the following procedure shall be followed:
a. Potential conflict disclosed by the “interested party:” The person with the conflict (“interested party”) shall notify the executive committee in case of a board issue, or the committee chair in case of a committee issue, about the potential interest that is in conflict or appears to be in conflict before the related discussion, vote or action takes place. The interested party shall: (1) absent him/herself from the discussion, and (2) absent him/herself from voting on the related matter.
b. Disclosure by a party other than the “interested party:” When the issue of a potential conflict, whether actual, apparent or perceived, is raised by another ICSC board/committee member before or during any discussion, vote, decision-making or other consideration related to ICSC, the interested party shall excuse him/herself from the discussion until the board or committee determines if there is a potential conflict of interest so as not to unduly influence the discussion of the conflict. The remainder of the board or committee will determine whether a conflict exists and notify the interested party before beginning or continuing with deliberation of the issue.
c. Discovery by the board/committee: If the board, any committee or their respective members have reason to believe that a board/committee member or staff has failed to disclose any actual or apparent conflicts of interest, it shall inform such person of the basis for such belief and afford him/her an opportunity to explain the alleged failure to disclose. Following such explanation and after any further investigation deemed appropriate by the board, if the board determines that the interested party has in fact failed to disclose an actual or possible conflict of interest, it shall take what action it deems appropriate, including corrective action, and when warranted, result in the removal or termination of such person. d. Documentation of conflicts of interest: The fact that a conflict was managed at the board or committee level as well as the determined outcome shall be documented in the minutes of board meetings. In most cases the broadest disclosure possible is advisable so that decision-makers can make informed decisions that are in the best interests of ICSC.
e. Disinterested parties only: In all cases, discussions, votes and decisions involving a conflict will be made only be disinterested persons.
5. Monitoring potential conflicts of interest:The board’s executive committee and the executive director will monitor proposed or ongoing issues of ICSC and be proactive about seeking out potential conflicts of interest and disclose them to the board and staff, as appropriate.
6. Board duties and questionsIt is the duty of all board members and staff to be aware of this policy, and to identify potential conflicts of interest, whether actual, apparent or perceived and be aware of situations that may result in the appearance of a conflict and to disclose those situations to the executive committee or executive director, as appropriate. Questions about this conflict of interest policy should be directed to either the executive director, or a member of the executive committee or board development, nominations and elections committee.
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