Conflict of Interest Policy: Do you have one?

Do you have a Conflict of Interest Policy’s?  If not, it’s time.  A comprehensive policy will protect your organization, and its leaders if it is current and up to date with the organization’s needs.

The IRS says all organizations should have a comprehensive conflict-of-interest policy that follows a traditional legal format.  This is recommend in Part V, Section 5 of IRS Form 1023.   The code asks questions to determine if the organization has procedures on handling conflicts and makes recommendations on creating a conflict-of-interest policy if one does not exist.

The full sample is here, but the overview can be seen below.

Article I: Purpose

Article II: Definitions

  1. Interested Person
  2. Financial Interest

Article III: Procedures

  1. Duty To Disclose
  2. Determining Whether a Conflict of Interest Exists
  3. Procedures for Addressing the Conflict of Interest
  4. Violations of the Conflicts-of-Interest Policy

Article IV: Records of Proceedings

Article V: Compensation

Article VI: Annual Statements

Article VII: Periodic Reviews

Article VIII: Use of Outside Experts

Take-away: At your next Board meeting, make it a point to update or adopt a comprehensive conflict-of-interest policy.