Policy on Conflicts of Interest and Disclosure of Certain Interests
Purpose
This conflict of interest policy is designed to help directors, officers and employees of
[ORGANIZATION NAME] identify situations which present potential conflicts of interest and
provide [ORGANIZATION NAME] with a procedure which, if observed, will allow a transaction to
be treated as valid and binding even though a director, officer or employee has, or may have, a
conflict of interest with respect to the transaction. The policy is intended to comply with the
procedure prescribed in Indiana Code 23-17-13-2, governing conflicts of interest for directors of
nonprofit corporations. In the event an inconsistency exists between the requirements and
procedures prescribed herein, those in IC 23-17-13-2 shall take precedence. (All capitalized terms
are defined in Part 2 of this policy.)
Definition of Conflict of Interest
Interested Person
Any director, principal officer, member of a committee with board-delegated powers, or employee
who has a direct or indirect financial interest, or whose family member has direct or indirect
financial interest, as defined below, is an interested person.
Family Member
The spouse, parent or spouse of a parent, child or spouse of a child, brother, sister, or spouse of a
brother or sister of an interested person, is considered a family member.
Financial Interest
Business, ownership, investment or compensation interest of any kind, which, in view of all the
circumstances, is substantial enough that it would, or reasonably could, affect an interested person
or family member’s judgment with respect to transactions to which the entity is a party.
Circumstances
For purposes of this policy, the following circumstances shall be deemed to create Conflicts of
Interest:
A. Outside Interests
1. A Contract or Transaction between [ORGANIZATION NAME] and an interested
person or family member.
2. A Contract or Transaction between [ORGANIZATION NAME] and an entity in
which an interested person or family member has a financial interest or of which
such person is a director, officer, agent, partner, associate, trustee, personal
representative, receiver, guardian, custodian, conservator or other legal
representative.
3. The disclosure or use of information related to the business of
[ORGANIZATION NAME] that might adversely affect its interests or might result in
the personal profit or advantage of any director, principal officer, member of a
committee with board-delegated powers, employee or family member.
B. Outside Activities
1. An interested person competing with [ORGANIZATION NAME] in the rendering
of services or in any other contract or transaction with a third party.
2. An interested person having a financial interest in; or serving as a director,
officer, employee, agent, partner, associate, trustee, personal representative,
receiver, guardian, custodian, conservator or other legal representative of, or
consultant to, an entity or individual that competes with [ORGANIZATION NAME] in
the provision of services or in any other contract or transaction with a third party.
C. Gifts, Gratuities and Entertainment
A Responsible Person accepting gifts, entertainment or other favors from any individual
or entity that:
1. does or is seeking to do business with, or is a competitor of [ORGANIZATION
NAME]; or
2. has received, is receiving or is seeking to receive a loan or grant, or to secure
other financial commitments from [ORGANIZATION NAME]; or
3. is a charitable organization operating in Indiana, under circumstances where it
might be inferred that such action was intended to influence or possibly would
influence the interested person in the performance of his or her duties. This does
not preclude the acceptance of items of nominal or insignificant value or
entertainment of nominal or insignificant value which are not related to any
particular transaction or activity of [ORGANIZATION NAME].
Procedures
Disclosure of Conflict
A. Prior to board or committee action on a contract or transaction all interested persons in
attendance with any actual or possible conflicts of interest shall disclose his or her financial
interest and all material facts. Such disclosure shall be reflected in the minutes of the meeting.
B. All interested persons who plan not to attend a meeting at which he or she has reason to
believe the board or committee will act on a matter in which the person has any actual or possible
conflicts of interest shall disclose his or her financial interest and all material facts to the chair of
the meeting. The chair shall report the disclosure at the meeting and the disclosure shall be
reflected in the minutes of the meeting.
C. After disclosure of the financial interest and all material facts, and after any discussion with the
interested person, he or she shall leave the board or committee meeting while the determination of
a conflict of interest is discussed and voted upon. The remaining board or committee members
shall decide if a conflict of interest exists. Such vote shall be reflected in the minutes of the
meeting.
Addressing Conflict
A. An interested person may make a presentation at the board or committee meeting, but after
such presentation, he/she shall leave the meeting during the discussion of, and the vote on, the
transaction or arrangement resulting in the conflict of interest. Such person shall not attempt to
exert his or her personal influence with respect to the matter, either at or outside the meeting.
B. A person who has a Conflict of Interest with respect to a Contract or Transaction that will be
voted on at a meeting shall not be counted in determining the presence of a quorum for purposes
of the vote. The person having a conflict of interest may not vote on the Contract or Transaction
and shall not be present in the meeting room when the vote is taken, unless the vote is by secret
ballot. Such person’s ineligibility to vote shall be reflected in the minutes of the meeting. For
purposes of this paragraph, a member of the Board of Directors of [ORGANIZATION NAME] has a
Conflict of Interest when he or she stands for election as an officer or for re-election as a member
of the Board of Directors.
C. The chairperson of the board or committee shall, if appropriate, appoint a disinterested person
or committee to investigate alternatives to the proposed transaction or arrangement.
D. 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.
E. 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 directors 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.
F. If the board or committee has reasonable cause to believe that a member has failed 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.
G. If, after hearing the response of the member and making such further investigation as may be
warranted in the circumstances, the board or committee determines the member has in fact failed
to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and
corrective action such as request divestment of conflicted interest or dismissal from the board of
directors.
H. 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.
Review of policy
To ensure [ORGANIZATION NAME] operates in a manner consistent with its charitable purposes
and does not engage in activities that could jeopardize its tax exempt status, periodic reviews shall
be conducted and shall, at a minimum, include the following:
A. Whether compensation arrangements and benefits are reasonable and are the result of arm'slength bargaining.
B. Whether acquisitions provider goods and services result in inurement or impermissible private
benefit.
C. Whether partnership, joint venture, and management service arrangements conform to written
policies, are properly recorded, reflect reasonable payments for goods and services, further
[ORGANIZATION NAME]'s charitable purposes and do not result in inurement or impermissible
private benefit.
D. Annually, each director, principal officer, member of a committee with board-delegated powers,
and employee shall sign a statement affirming that he or she received a copy of this policy, read
and understands this policy, and agrees to comply with this policy.
E. Annually, each director, principal officer, member of a committee with board-delegated powers,
and employee shall complete a disclosure form identifying any relationships, positions or
circumstances in which he or she is involved that might contribute to a conflict of interest arising.
Such relationships, positions or circumstances might include service as a director of or consultant
to a nonprofit organization, or ownership of a business that might provide goods or services to
[ORGANIZATION NAME]. Any such information regarding business interests of a director,
principal officer, member of a committee with board-delegated powers, employee, or family
member shall be treated as confidential and shall generally be made available only to the Chair,
the Executive Director, and any committee appointed to address conflicts of interest, except to the
extent additional disclosure is necessary in connection with the implementation of this policy.
F. The Board of Directors shall review this policy annually. Any changes to the policy shall be
communicated immediately to all directors, principal officers, members of a committee with boarddelegated powers, and employees.
I have reviewed, and agree to abide by, the Conflict of Interest Policy of [ORGANIZATION
NAME] currently in effect.
Signature: ____________________________________
Date: ___________________