Conflict of Interest
PURPOSE AND SCOPE
The purpose of this policy is to protect the interests of the College when it is contemplating entering into a transaction or arrangement that might benefit the private interests of an officer or Trustee of the College or might result in a possible excess benefit transaction. This policy is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit and education organizations. It establishes a process through which an individual affected by an actual or potential conflict of interest will advise the Board about the situation. This policy covers all Trustees and officers of the College as well as other individuals with Board-delegated powers. Further, it is intended to serve as a guide to all personnel of the College, regardless of position.
FIDUCIARY DUTY AND CONFLICT OF INTEREST
Trustees and others with significant responsibilities for the College owe a fiduciary duty to the College. Thus, at all times they should act in the best interests of the College and exercise particular care that no detriment to the interests of the College (or the appearance of such detriment) results from a conflict between those interests and any personal interests which the individual may have.
“Conflict of interest” shall refer to activities and relationships in which a perceived or actual divergence arises between a covered individual’s personal interests (financial or otherwise, direct or indirect) and this fiduciary duty.
DUTY TO DISCLOSE, REFRAIN INFLUENCE
Any possible conflict of interest should be handled by full disclosure to the Board and absence of involvement or influence by the covered individual in any matter in which the interest is involved. This policy should not be construed to prevent a covered individual from briefly stating a position on the matter or providing information on the matter if specifically requested to do so. However, the individual must not use personal influence in the matter and must recuse him or herself from discussions about and decisions on the matter.
VIOLATION OF THIS POLICY
If the Board has reasonable cause to believe that a covered individual has failed to disclose an actual or possible conflict of interest, it shall inform the individual of the basis for such belief and afford the individual an opportunity to explain the alleged failure to disclose. If after hearing the individual’s response and after conducting further investigation as warranted by the circumstances, the Board determines the individual has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and correction action.
RESOLVING A POSSIBLE CONFLICT OF INFLUENCE
Upon disclosure of a covered individual’s possible conflict of interest, the Board shall review the covered individual’s interest and all related material facts and information and vote upon the matter. If a majority vote of the disinterested Trustees determines that a conflict of interest exists, the Board shall determine how to address the conflict.
If necessary, the Board may investigate and review whether proceeding or continuing with the activity or relationship is reasonable in its judgment and is in the best reputational and financial interest of the College, including after possible imposition of conditions or restrictions on the activity or relationship of concern.
RECORDS OF PROCEDURES
The minutes of the Board or its committees shall contain:
- the names of the persons who disclosed or otherwise were found to have an interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the Board’s or committee’s decision as to whether a conflict of interest existed; and
- the names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Each Trustee, officer, and member of a committee with Board-delegated powers shall annually make an affirmation that such person:
- has received a copy of the Conflict of Interest Policy;
- has read and understands the policy; and
- agrees to comply with the policy.
To ensure that the College operates in a manner consistent with educational purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:
- whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm’s length bargaining
- whether partnerships, joint ventures, and arrangements with management organizations conform to the College’s policies, are properly recorded, reflect reasonable investment or payments for goods and services, further educational purposes, and do not result in inurement, impermissible private benefit, or an excess benefit transaction.
USE OF OUTSIDE EXPERTS
When conducting the periodic reviews as provided for in this policy, the College may, but need not, use outside advisors. If outside advisors are used, their use shall not relieve the Board of its responsibility for ensuring that periodic reviews are conducted.