PURPOSE: A “ conflict of interest” or even the appearance of a conflict of interest involving members of the
Board of Directors, officers or staff must not compromise the Mission 1 of the Community Colleges of New
Hampshire Foundation. A conflict of interest generally means any financial or other interest which conflicts with the service of an individual because: 1) it could impair the individual’s objectivity; or 2) it could create an unfair advantage for any person or organization.
A fiduciary duty exists between the Foundation and its Board members, officers and management staff, which carries with it a broad and unbending duty of loyalty and fidelity to the Foundation and its Mission. The Board, its officers and management staff have the responsibility of administering the affairs of the Foundation honestly and prudently, and of exercising their best care, skill, and judgment for the sole benefit of the Foundation. These persons must exercise the utmost good faith in all transactions involved in the exercise of their duties, and they must not use their positions with the Foundation or knowledge gained from their service for their personal benefit.
The interests of the Foundation must have the first priority in all decisions and actions involving an individual acting in the capacity of a Board member, officer or staff.
COVERED PERSONS: This policy applies to all members of the Board of Directors, officers, members of standing committees of the Board, and all management staff who could influence the actions of the
Foundation. Each Covered Person shall receive a copy of this Policy at the time of commencement of service to the Foundation, and annually shall sign an acknowledgement that he/she has received, understands and shall comply with this Policy. All Covered Persons must also comply with all notice and voting requirements of New Hampshire RSA 7:19-a, and 292:6-a, discussed below.
STATUTORY REQUIREMENTS: The New Hampshire statutory requirements addressing conflict of interests matters involving charitable organizations such as the Foundation (RSA 7:19-a and RSA 292:6-a) are hereby incorporated in full into and made an integral part of this Conflict of Interest Policy ; and a copy of the relevant New Hampshire statutes is attached hereto so that every Board member and other
Covered Person is aware of the statutory requirements.
NATURE OF CONFLICTING INTEREST/PECUNIARY BENEFIT TRANSACTIONS: A conflict of interest may arise if a Covered Person has a disqualifying relationship, including a financial or “pecuniary” relationship, with a third party engaging or proposing to engage in a transaction with the Foundation. A
“pecuniary benefit transaction” means a transaction with a charitable trust such as the Foundation and an entity in which a Covered Person has a financial interest, direct or indirect, including affiliation with an organization as (i) an officer, director, trustee, member, owner [either as sole proprietor or partner], shareholder, employee or agent, and/or (ii) through a member of the immediate family of the Covered Person
1 Mission: To support the Community College System of New Hampshire and make higher education more accessible.
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(by blood, marriage or other significant long-term relationship with a person so affiliated with such a third party organization).
INTERPRETATION OF THIS STATEMENT OF POLICY: The areas of conflicting interest listed above, and the relations in those areas which may give rise to conflict, are not exhaustive. Conceivably, conflicts involving the Foundation and Covered Persons might arise in other areas or through other relations. It is assumed that the Covered Persons will recognize such areas and relation by analogy. The Foundation expects that all Covered Persons will abide by the spirit as well as the letter of this Policy.
It is the policy of the Foundation Board of Directors that the existence of any potentially conflicting interest, direct or indirect, shall be disclosed to the full Board of Directors before any transaction is consummated. It shall be the continuing responsibility of Covered Persons to scrutinize their transactions and outside business interests and relationships for potential conflicts with the Foundation and its Mission and to immediately make such disclosures to the Chairperson of the Board.
DISCLOSURE POLICY AND PROCEDURE: Transactions with related parties of Covered Persons and all
“pecuniary benefit transactions” involving the Foundation may be undertaken only if all of the following are observed, as applicable:
1.
The transaction is for goods or services purchased or benefits provided in the ordinary course of business of the Foundation, for the actual or reasonable value of the goods or services or for a discounted value, and the transaction is fair to the Foundation;
2.
A full and fair disclosure of the material facts of transaction is made to the Board;
3.
The Covered Person with respect to the related party is excluded from the discussion and approval of such transaction, but may provide information if requested to do so;
4.
The Board has determined, by the affirmative vote of a 2/3 majority of all disinterested Directors, that the transaction is in the best interest of the Foundation.
5.
If the subject transaction, or aggregate of transactions with the same Covered Person within one fiscal year, exceeds the amount of $5,000, the Foundation must publish notice of such transaction in a newspaper of general circulation in the community in which the Foundation’s principal office is located and give written notice to the Director of Charitable Trusts of the State of New Hampshire, identifying the nature and specific amount of the transaction and the identity of the Covered Person, prior to completing the transaction.
Disclosure within the Foundation should be made initially to the Board Chairperson who shall determine whether an apparent conflict of interests exists under this Policy; if so determined, such apparent conflict of interest shall thereafter be brought to the attention of the Board of Directors .
The Board shall determine whether the contemplated transaction may be authorized as just, fair, and reasonable to the Foundation. The decision of the Board on these matters will rest in their sole discretion, and their concern must be the welfare of the Foundation and the advancement of its Mission. A record of the action on the matter shall be recorded in the minutes of the Board of Directors. The Board shall also maintain an aggregate listing disclosing each and every pecuniary benefit transaction and the names of the Covered
Person and the amount of the benefit for review by the Board and contributors to the Foundation. Such list shall also be reported on an annual basis to the Director of Charitable Trusts in the Foundation’s annual report.
ANNUAL REPORTS. To address questions of conflict of interest, for the protection of both the individual and the organization, each Covered Person shall submit annually a conflict of interest statement and consider such statement a matter of public record that will be available for review upon request by the public. The form of such annual statement is attached hereto.
Adopted By Community Colleges of New Hampshire Foundation Board of Directors:
_____May 11, 2009________________ date
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Please Print
I acknowledge that I , a Board member, standing committee member, officer or staff member of the
Community Colleges of New Hampshire Foundation, have reviewed the Foundation’s “Policy Governing
Conflicts of Interest and Pecuniary Benefit Transactions,” before signing this statement. I hereby disclose information on all associations (all business and charitable organizations) in which I have a direct financial interest (as an owner, proprietor, partner, shareholder, employee, officer, a director or trustee thereof) or an indirect financial interest; I understand an indirect interest arises where such an association involves a person or entity of which a member of my immediate family is such an owner, proprietor, partner, shareholder, employee, officer, a director or trustee. (Feel free to attach additional sheets.)
Did you, or any member of your immediate family, obtain a pecuniary benefit from the Foundation in the last year other than reasonable compensation for services rendered and expenses incurred in connection with your official duties? ____Yes____ No
If “Yes,” complete the following:
Was any real estate transaction involved?
Was a loan made to any Director, Officer or Trustee?
_______ Yes _______ No
_______ Yes _______ No
Was a pecuniary benefit paid in excess of $500? _______ Yes _______ No
Was a pecuniary benefit paid in excess of $5,000? _______ Yes _______ No
If “Yes,” attach a copy of: Public Newspaper Notice/ Meeting Minutes/Relevant Contract or
Agreement with the Foundation.
I also understand that I am required to disclose any other situation from which a possible conflict of interest might arise in the future.
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7:19 Authority; Register Authorized; Pecuniary Benefit Limited. –
I. RSA 7:19 through 32-a inclusive shall apply to all trustees holding property for charitable purposes and to all persons soliciting for charitable purposes or engaging in charitable sales promotions; and the attorney general shall have and exercise, in addition to all the common law and statutory rights, duties and powers of the attorney general in connection with the supervision, administration and enforcement of charitable trusts, charitable solicitations, and charitable sales promotions, the rights, duties and powers set forth in RSA 7:19 through 32-a inclusive. The attorney general shall also have the authority to prepare and maintain a register of all charitable trusts heretofore or hereafter established or active in this state.
However, this subdivision does not apply to the United States; any state, territory or possession of the
United States; the District of Columbia; the Commonwealth of Puerto Rico or to any of their agencies or governmental subdivisions or to any religious organization which holds property for charitable or religious purposes or their integrated auxiliaries or to conventions or associations of churches.
II. Directors, officers, and trustees of charitable trusts shall serve on the governing boards of such charitable trusts only for the charitable purposes of the organization. If such directors, officers or trustees are serving for any other expressed or intended reasons, they shall not serve on the governing board of the organization.
Source.
1943, 181:1, par. 13-a. 1947, 94:4. RSA 7:19. 1971, 439:1. 1987, 260:1. 1994, 228:1. 1996,
302:1. 1997, 184:1, eff. Jan. 1, 1998.
7:19-a Regulation of Certain Transactions Involving Directors, Officers, and Trustees of
Charitable Trusts. –
I. Definitions. In this section:
(a) ""Director, officer, or trustee'' means a director, officer, or trustee of a charitable trust.
(b) ""Financial interest'' means an interest in a transaction exceeding $500 in value for any officer, director, or trustee, on an annual aggregate basis. An ""indirect'' financial interest arises where the transaction involves a person or entity of which a director, officer, or trustee, or a member of the immediate family of a director, officer, or trustee, is a proprietor, partner, employee, or officer.
(c) ""Pecuniary benefit transaction'' means a transaction with a charitable trust in which a director, officer, or trustee of the charitable trust has a financial interest, direct or indirect. However, the following shall not be considered as pecuniary benefit transactions:
(1) Reasonable compensation for services of an executive director, and expenses incurred in connection with official duties of a director, officer, or trustee;
(2) A benefit provided to a director, officer, or trustee or member of the immediate family thereof if:
(A) The benefits are provided or paid as part of programs, benefits, or payments to members of the general public; and
(B) The charitable trust has adopted written eligibility criteria for such benefit in accordance with its bylaws or applicable laws; and
(C) The director, trustee, or family member meets all of the eligibility criteria for receiving such benefit;
(3) A continuing transaction entered into by a charitable trust, merely because a person with a financial interest therein subsequently becomes a director, officer, or trustee of the charitable trust.
(d) ""Charitable trust'' does not include, for purposes of this section only, an organization qualified as a private foundation under the applicable provisions of the United States Internal Revenue Code.
II. A pecuniary benefit transaction shall be prohibited unless it is in the best interest of the charitable
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trust and unless all of the following conditions are met:
(a) The transaction is for goods or services purchased or benefits provided in the ordinary course of the business of the charitable trust, for the actual or reasonable value of the goods or services or for a discounted value, and the transaction is fair to the charitable trust;
(b) The transaction receives affirmative votes from at least a 2/3 majority of all the disinterested members of the governing board of the charitable trust, which majority shall also equal or exceed any quorum requirement specified in the bylaws of the charitable trust:
(1) After full and fair disclosure of the material facts of the transaction to the governing board and after notice and full discussion of the transaction by the board;
(2) Without participation, voting, or presence of any director, officer, or trustee with a financial interest in the transaction or who has had a pecuniary benefit transaction with the charitable trust in the same fiscal year, except as the board may require to answer questions regarding the transaction; and
(3) A record of the action on the matter is made and recorded in the minutes of the governing board;
(c) The charitable trust maintains a list disclosing each and every pecuniary benefit transaction, including the names of those to whom the benefit accrued and the amount of the benefit, and keeps such list available for inspection by members of the governing board and contributors to the charitable trust.
The list shall also be reported to the director of charitable trusts each year as part of the charitable trust's annual report required under RSA 7:28;
(d) If the transaction, or the aggregate of transactions with the same director, officer, or trustee within one fiscal year, is in the amount of $5,000 or more, the charitable trust publishes notice thereof in a newspaper of general circulation in the community in which the charitable trust's principal New
Hampshire office is located, (or if there is no such office, then in a newspaper of general circulation throughout the state), and gives written notice to the director of charitable trusts, before consummating the transaction. At a minimum, such notice shall state that it is given in compliance with this section and shall include the name of the charitable trust, the name of any director, officer, or trustee receiving pecuniary benefit from the transaction, the nature of the transaction, and the specific dollar amount of the transaction.
III. Every director, officer, or trustee, or member of the immediate family of such director, officer, or trustee, who engages in a pecuniary benefit transaction with a charitable trust shall provide copies of all contracts, payment records, vouchers, other financial records or other financial documents at the request of the director of charitable trusts in accordance with RSA 7:24. All documents so provided may be disclosed to the public for inspection and copying, subject to applicable confidentiality laws.
IV. Every charitable trust shall adopt policies pertaining to pecuniary benefit transactions and conflicts of interest.
V. No charitable trust shall lend money or property to its directors, officers, or trustees. Any director, officer, or trustee who assents to or participates in the making of any such loan shall be jointly and severally liable to the charitable trust for the amount of such loan until it is repaid.
VI. No charitable trust shall sell, lease for a term of greater than 5 years, purchase, or convey any real estate or interest in real estate to or from an officer, director, or trustee without the prior approval of the probate court after a finding that the sale or lease is fair to the charitable trust. However, this paragraph shall not apply to a bona fide gift of an interest in real estate to a charitable trust by a director, officer, or trustee of the charitable trust.
VII. A pecuniary benefit transaction undertaken in violation of this section is voidable. The director of charitable trusts may investigate complaints regarding pecuniary benefit transactions and if, after an investigation pursuant to RSA 7:24, the director determines that a pecuniary benefit transaction is in violation of this section, the director may institute appropriate proceedings under RSA 7:28-f to enforce these provisions.
VIII. Any member of the governing board of a charitable trust shall have standing to petition, pursuant to RSA 491:22, for a declaratory judgment that one or more pecuniary benefit transactions of the charitable trust are void.
IX. The provisions of this section shall not apply to transactions between a charitable trust and its incorporators, members, or other contributors who are not also directors, officers, or trustees of the charitable trust, provided that such transactions are fair to the charitable trust.
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X. Notwithstanding subparagraph I(c) of this section, in the case of hospitals, ""pecuniary benefit transaction'' shall not include reasonable compensation for professional services of members of the hospital's professional medical or nursing staff who also serve as members of the governing board of the hospital, if persons receiving such compensation do not constitute more than 25 percent of the membership of such board or the governing board of the charitable trust which owns the hospital.
XI. Notwithstanding subparagraph I(c) of this section, in the case of educational organizations normally maintaining a regular faculty and curriculum and normally having a regularly enrolled body of pupils or students in attendance at the place where their educational activities are regularly carried on,
""pecuniary benefit transaction'' shall not include reasonable compensation for professional services of members of the organization's faculty and staff who also serve as members of the governing board of the educational organization if such persons do not constitute more than 25 percent of the membership of such board.
Source.
1996, 302:2. 1997, 184:2, 3, eff. Jan. 1, 1998.
7:19-b Standards for Acquisition Transactions Involving Health Care Charitable Trusts and
Review by Director of Charitable Trusts. –
I. In this section:
(a) ""Acquisition transaction'' or ""acquisition'' means transfer of control, direct or indirect, of a health care charitable trust, or of 25 percent or more of the assets thereof, including, but not limited to, purchases, mergers, leases, gifts, consolidations, exchanges, joint ventures, or other transactions involving transfer of control or of 25 percent or more of assets. However, changes in membership of the governing body of a health care charitable trust occurring through regular election or filling of vacancies in accordance with the bylaws thereof do not of themselves constitute acquisition transactions within the meaning of this section.
(b) ""Acquirer'' means a person acquiring control, direct or indirect, of a health care charitable trust, or of 25 percent or more of the assets thereof.
(c) ""Control'' of a health care charitable trust means the power to elect a majority or more of the membership of the governing body thereof, or otherwise to direct the affairs thereof.
(d) ""Health care charitable trust'' means a charitable trust organized to provide health care services including, but not limited to, hospitals, community health services, and medical-surgical or other diagnostic or therapeutic facilities or services, or a charitable trust operating as a health insurer or health maintenance organization. ""Health care charitable trust'' shall not include any testamentary or inter vivos trust which is not organized to provide health care services.
II. The governing body of a health care charitable trust, or any other persons having authority to direct the affairs of a health care charitable trust, shall not approve the acquisition thereof unless the governing body has acted in good faith and in a manner consistent with its fiduciary duties to the health care charitable trust, and unless the following minimum standards are met:
(a) The proposed transaction is permitted by applicable law, including, but not limited to, RSA 7:19-
32, RSA 292, and other applicable statutes and common law;
(b) Due diligence has been exercised in selecting the acquirer, in engaging and considering the advice of expert assistance, in negotiating the terms and conditions of the proposed transaction, and in determining that the transaction is in the best interest of the health care charitable trust and the community which it serves;
(c) Any conflict of interest, or any pecuniary benefit transaction as defined in this chapter, has been disclosed and has not affected the decision to engage in the transaction;
(d) The proceeds to be received on account of the transaction constitute fair value therefor;
(e) The assets of the health care charitable trust and any proceeds to be received on account of the transaction shall continue to be devoted to charitable purposes consistent with the charitable objects of the health care charitable trust and the needs of the community which it serves;
(f) If the acquirer is other than another New Hampshire health care charitable trust, control of the proceeds shall be independent of the acquirer; and
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(g) Reasonable public notice of the proposed transaction and its terms has been provided to the community served by the health care charitable trust, along with reasonable and timely opportunity for such community, through public hearing or other similar methods, to inform the deliberations of the governing body of the health care charitable trust regarding the proposed transaction.
III. Notice of a proposed acquisition transaction shall be given to the director of charitable trusts in writing to be received by the director no less than 120 days before consummation of the transaction. Such notice shall identify all parties to the transaction; shall set forth all material terms thereof, including, without limitation, any changes in control or ownership of assets, any acquisition price, any change in the capital structure and management, and any and all compensation paid or to be paid in connection therewith; shall include a copy of the minutes and other documents evidencing the decision of the governing body of the health care charitable trust, including documentation of steps taken to comply with paragraph II(g) of this section and any changes in the proposed transaction resulting therefrom, any relevant community needs assessment developed by the health care charitable trust, and a copy of the acquisition agreement and financial statements of all parties; and shall include a certification signed by those members of the governing body or other person approving the acquisition on behalf of the health care charitable trust that the standards set forth in paragraph II of this section have been considered in good faith and complied with, together with such explanations and other documentation as may be necessary to demonstrate such compliance. The notice shall also include a statement from the acquirer specifying the manner in which it proposes to continue to fulfill the charitable objects of the health care charitable trust. Any information submitted pursuant to this section shall be subject to RSA 91-A.
IV. Within a reasonable time, not to exceed 120 days after receipt of the notice specified in the preceding paragraph, the director shall determine compliance with the standards set forth in paragraph II of this section and shall notify the parties either that the director will take no further action with respect thereto, or that the director objects to the transaction on specified grounds. Within 60 days following receipt of the notice specified in the preceding paragraph, the director may require submittal of such additional information as may be reasonably necessary to make such a determination. In making such a determination, the director shall accept public comment and may conduct public hearings relating thereto within the time specified in this paragraph and may direct the health care charitable trust to publish notice thereof in a manner reasonably specified by the director. Such hearing may be conducted informally or in conformity with RSA 541-A, at the discretion of the director. The expenses of such public hearing shall be paid for by the parties to the proposed transaction, after consultation with the parties. Where the acquisition transaction involves assets, the fair value of which are in excess of $5,000,000, after consultation with the parties, the director may employ, at the parties' expense, expert assistance, including independent counsel and independent financial advisors that are reasonably necessary to make the determination specified in this paragraph.
V. In addition to all other powers conferred by statute or common law, the director may bring judicial proceedings to enjoin consummation of any acquisition transaction in which notice has not been provided in accordance with paragraph III of this section. Any acquisition transaction which has been consummated following the effective date of this section without such notice having been provided, or any acquisition transaction of which such notice was deceptive or materially inaccurate, shall be voidable through appropriate judicial proceedings instituted by the director of charitable trusts.
VI. (a) Nothing in this section shall derogate from authority of the attorney general, or the rights of others, provided by common law or other statute.
(b) This section shall not supplant or restrict the general powers of the probate courts with respect to charitable trusts pursuant to RSA 498, RSA 547:3 through 547:3-h, RSA 564-B:2-203, article 4 of RSA
564-B, or at common law. Nor do the standards set forth in paragraph II of this section supplant or restrict the standards that may lawfully be applied in connection with the doctrines of cy pres, deviation, and termination as applicable by the probate courts of this state in such proceedings.
(c) Notwithstanding the provisions of this section, the commissioner of insurance retains full jurisdiction to regulate any charitable trust operating as a health insurer or health maintenance organization, including through the application of RSA 401-B. If the insurance commissioner determines that an acquisition or acquisition transaction otherwise subject to the provisions of this section is necessary to avoid the future impairment or insolvency of either or both of the merging health insurers or health maintenance organizations, the commissioner may waive any of the provisions of this section.
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Source.
1997, 280:1, eff. Sept. 1, 1997. 2004, 130:2, eff. Oct. 1, 2004
292:6-a Board of Directors of Charitable Nonprofit Corporations. – In the interest of encouraging diversity of discussion, connection with the public, and public confidence, the board of directors of a charitable nonprofit corporation shall have at least 5 voting members, who are not of the same immediate family or related by blood or marriage. No employee of a charitable nonprofit corporation shall hold the position of chairperson or presiding officer of the board. This section shall not apply to those nonprofit corporations in existence on August 10, 1996, until one year after August 10, 1996, nor to any organization qualified as a private foundation under the applicable provisions of the United States Internal
Revenue Code, nor to religious organizations, churches, or the integrated auxiliaries thereof or to conventions or associations of churches. The provisions of this section may be waived with the approval of the director of charitable trusts after application for such waiver.
Source.
1996, 302:3, eff. Aug. 10, 1996. 1997, 184:5, eff. Jan. 1, 1998. h:\business\djm\community colleges of nh foundation\conflict of interest redraft 2009 - 3.doc
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