Conflict of Interest Policy Introduction
This Conflict of Interest Policy guides the activities of the board, volunteers, authorized instructors and staff of PEMAC. Questions about the policy should be directed to the Executive Director.
This policy provides guidelines for identifying conflicts, disclosing conflicts, and outlines procedures to be followed to assist PEMAC manage conflicts of interest and situations that may result in the appearance of a conflict.
Conflict of Interest
A conflict of interest arises when an individual has a personal interest that conflicts with the interests of PEMAC. Situations or transactions arising out of a conflict of interest can result in inappropriate financial gain, a lack of integrity in PEMAC's decision-making process and/or penalties imposed by regulatory bodies.
Typically persons who are affected by a conflict of interest policy are the Organization’s board members, officers, and senior staff. In some cases a major donor could also be in a conflict situation. PEMAC takes a broad view of conflicts and board/staff are urged to think of how a situation/transaction would appear to outside parties when identifying conflicts or possible conflicts of interest.
A person in a position of authority over the Organization may benefit financially from a transaction between the Organization and the individual; or others closely associated with the individual may be affected financially. Family members, or their businesses, or other persons or the businesses of persons with whom the individual is closely associated, could benefit from similar transactions. Or there may be situations where a board member of PEMAC is also a board member of another nonprofit or for-profit entity in the community with which PEMAC collaborates or conducts business.
Duality of Interest
A duality of interest is a situation where a board/staff member may have divided loyalties because they serve organizations whose interests are aligned. This can be quite common and though the overall interests of the two affiliated organizations may be aligned, there may be particular situations in which there are conflicts (perhaps with respect to competing products and services in a particular class) that at least need to be disclosed and discussed.
Duality of interests are inevitable and can be advantageous if managed ethically and transparently. Proactive disclosure must occur so that the appropriate plan of action to manage any situational conflicts can be determined.
Procedures to Manage Conflicts of Interest
Disclosure
A "Proactive Disclosure Form" is available for directors, staff, key volunteers and instructors. They will be prompted to complete it annually. If there is any change to your affiliations we hope you will remember to update your disclosure form before being asked. Proactive disclosure and discussion based on form disclosures is always best.
If you believe that another person is in a conflict situation and that this person may not have disclosed it you are urged to discuss it with:
For staff: the employee’s supervisor -or-
For supervisors and volunteers: the Executive Director -or-
For the Executive Director and Directors: the President of the Board of Directors -or-
Any of the above who are most likely to be detached from the conflict situation.
Discussion
For each interest disclosed that is not already covered by written policy, the person to whom it was disclosed must form an ad hoc committee composed of three disinterested individuals (Executive Director and/or Board Members) as appropriate, for the purpose of deciding whether to:
- take no action.
- recommend a plan as to how to avoid or manage the conflict.
- invite discussion/resolution by the full board to determine what action to take
In most cases the broadest disclosure possible is advisable so that decision-makers can make informed decisions that are in the best interests of the organization.
When the conflict involves a decision-maker, the person with the conflict (“interested party”):
- must fully disclose the conflict to all other decision-makers;
- may not be involved in the decision of what action to take (e.g., may not participate in a vote) but may serve as a resource to provide other decision-makers with necessary information.
In some cases the person with the conflict may be asked to recuse him/herself from sensitive discussions so as not to unduly influence the discussion of the conflict.
Decisions
In all cases, decisions involving a conflict will be made only by disinterested persons
The fact that a conflict was managed and the outcome will be documented in the minutes of board meetings if the conflict was related to a board member, and reported by the Executive Director to the board/Chair of the board/other appropriate committee of the board (Governance committee) if the conflict was related to a staff member.
The Chairperson of the board/Executive Director will monitor proposed or ongoing transactions of the organization (e.g., contracts with vendors and collaborations with third parties) for conflicts of interest and disclose them to the Board and staff, as appropriate, whether discovered before or after the transaction has occurred.
Guidelines for Volunteers Who Work for Service-Providing Companies
There have been many PEMAC volunteers over the years from service providing companies who have provided extremely valuable service to the organization as a whole so we have confidence that with the right vision and professionalism, this situation is manageable. Like most all volunteer-based organizations we feel happy and fortunate when an individual or company recognizes value in our association and steps forward to dedicate time and energy to its development.
That said, if you work for a service providing company (a company that would, for example, be interested in sponsoring or exhibiting at a PEMAC conference or advertising its services in our newsletter) and you are interested in volunteering, it is important that you are sensitive to real or perceived conflicts of interest and that you are open with the Executive Director and the board of Directors as necessary to be sure these are managed. Some known issues and guidelines for handling them are as follows:
- You must ensure that if you have access to PEMAC membership lists that you use them only for PEMAC business. You are welcome, however, to follow up in a professional (and not overly aggressive) manner with any member who contacts you directly for business purposes or shares their contact information with you personally at meetings or events. This kind of networking is one of our reasons for being.
- You must focus your PEMAC volunteer efforts on the promotion of the general interests of the public, PEMAC members and all member companies (in that order) which may include your competitors. Through these efforts we know that benefits to yourself individually and to other organizations you may serve are sure to follow indirectly.
- As early as practical in your volunteer term please initiate a discussion with the Executive Director to proactively discuss the potential issues.
- Consider carefully the implications and appearance of impropriety when conducting business between your company any PEMAC-associated member organization, or member-employer and if necessary communicate with the Executive Director to disclose, discuss, collaborate, and resolve the potential conflict in the most appropriate manner.