Importance of conflict of interest policies for your nonprofit

The majority of citizens who join nonprofit boards have good intentions. On rare occasions, however, board members leverage their involvement for self-serving purposes to the detriment of the organization. A well-drafted conflict of interest policy is vital to protect the charity against charges of impropriety.

At a minimum, your policy should require members to disclose conflicts. If a conflict exists, that member should refrain from voting accordingly, and a procedure should be set that dictates how the board will manage the conflict.

Policies vary from organization to organization and should be signed by board members at least annually.

– Patricia E. Farrell, Meyer, Unkovic & Scott, PEF@MUSLAW.com