Conflict of Interest Policy
The purpose of the Conflicts of Interest Policy is to protect the Corporation’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer of the Corporation. This policy is intended to supplement but not replace any applicable state laws governing conflicts of interest applicable to nonprofit charitable corporations.
1. Interested Person
Any trustee, principal officer, or member of a committee with board-delegated powers who has a direct or indirect financial interest, as defined below, is an interested person. If a person is an interested person with respect to any entity in the group of affiliated organizations of which the Corporation is a part, he or she is an interested person with respect to all entities in the group.
2. Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business,
investment or family–
- An ownership or investment interest in any entity with which the Corporation has a transaction or arrangement, or
- A compensation arrangement with the Corporation or with any entity or individual with which the Corporation has a transaction or arrangement, or
- A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Corporation is negotiating a transaction or arrangement.
3. Compensation includes direct and indirect remuneration as well as gifts or favors that are substantial in nature.
1. Duty To Disclose
In connection with any actual or possible conflicts of interest, an interested person must disclose the existence and nature of his or her financial interest to the trustees and members of committees with board-delegated powers considering the proposed
transaction or arrangement.
2. Determining Whether A Conflict Of Interest Exists
After disclosure of the financial interest, the interested person shall leave the board or committee meeting while the financial interest is discussed and voted upon. The remaining board or committee members shall decide if a conflict of interest exists.
3. Procedures For Addressing The Conflict Of Interest
- The board or committee chair shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
- After exercising due diligence, the board or committee shall determine whether the Corporation can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest.
- If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the board or committee shall determine by a majority vote of the disinterested trustees whether the transaction or arrangement is in the Corporation’s best interest and for its own benefit and whether the transaction is fair and reasonable to the Corporation and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination.
4. In order to fully implement the procedures contained in the Conflicts of Interest Policy, the executive committee shall review, at the initiation of the board chair, all potential and existing conflicts of interest as disclosed to him or her, and shall make recommendations to the board of trustees concerning the nature and extent of the situation presented and whether or not such situation poses a conflict of interest. Recommendations to the board may include, but not be limited to, requiring the interested person to terminate his/her financial interest in the transaction that causes the conflict, asking the interested person to resign from the board of trustees, or concluding that the conflict has not and will not have a detrimental effect on the Corporation. In conducting its investigation, the executive committee may use outside advisors, legal counsel and the professional staff of the Corporation.
5. In all cases involving conflicts of interest, including cases in which an interested trustee serves on the executive committee, the interested trustee shall recuse himself/herself from discussions and votes on the transaction at issue.
- If the board or committee has reasonable cause to believe that a member has railed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.
- If, after hearing the response of the member and making such further investigations as may be warranted by the circumstances, the board or committee determines that the member has in fact failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
Records of Proceedings
The minutes of the board and all committees with board-delegated power shall contain—
- The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the board’s or committee’s decision as to whether a conflict of interest in fact existed.
- The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection therewith.
A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Corporation for services is precluded from voting on matters pertaining to that member’s compensation.
Each trustee, principal officer and member of a committee with board-delegated powers shall annually sign a statement which affirms that such person–
- Has received a copy of the Conflicts of Interest Policy,
- has read and understands the policy,
- has agreed to comply with the policy, and
- understands that the Corporation is a charitable organization and that in order to maintain its federal tax exemption, it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
To ensure that the Corporation operates in a manner consistent with its charitable purposes and that it does not engage in activities that could jeopardize its status as an organization exempt from federal income tax, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:
- Whether compensation arrangements and benefits are reasonable and are the result of arm’s-length bargaining.
- Whether acquisitions of services result in increment or impermissible private benefit.
- Whether partnership and joint venture arrangements and arrangements with other organizations conform to written policies, are properly recorded, reflect reasonable payments for good s and services, further the Corporation’s charitable purposes and do not result in inurnment or impermissible private benefit.
- Whether agreements with providers, employees, and third party payers further the Corporation’s charitable purposes and do not result in inurnment or impermissible private benefit.
Use of Outside Experts
In conducting the periodic reviews provided for in Article VII, the Corporation may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the board of its responsibility for ensuring that periodic reviews are conducted.
ROSE OKWANY Roseokwany August 2017
Dr Pauline Kibisu