Conflict of interest (COI) is such a natural part of nonprofit board work, that there is an ethical standard best practice to address it.  However, most COI policies focus on providing guidance on how individual board members need to act.  What sometimes gets glossed over or neglected, to the detriment of the organization, is guidance on reporting this action to stakeholders beyond the board itself. 

This consultant recently learned of a situation where a board had appropriately considered allowing one of its members’ employers to provide contractual services to the organization.  It was a good fit from a mission, operational and financial standpoint AND, most importantly, conflicts were appropriately disclosed and managed according to the board’s adopted policy.  But significant effort was not apparently made to inform key stakeholders outside the board and suspicions of inappropriate self-dealing arose in the minds of some of these stakeholders.  The concerns of these stakeholders were finally raised and were addressed in a seemingly satisfactory fashion, hopefully.  There may still be a longer term weakening of trust in the board.

How could this misunderstanding have been avoided?  One thought, is that the more standard conflict of interest policy should include procedures guiding how the management of COI is reported to outside stakeholders, beginning with a thorough summary in publicly available board meeting notes.  Procedures should be broad enough to encourage broader reporting of COI management more directly to key stakeholders, such as staff, funders, service partners and members in the case of a membership organization.  Perhaps this approach can be viewed as overkill in some cases but this way, very real issues that could adversely impact organization integrity and cohesion within the stakeholder “family” can be managed in a fashion that strengthens the health of the organization.

Comments

Add New Search

Write comment
Name:
Email:
Title:
UBBCode:	-color-aquablackbluefuchsiagraygreenlimemaroonnavyolivepurpleredsilvertealwhiteyellow -size-tinysmallmediumlargehuge
	Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 3.22

3.22 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."