Template: Conflict of Interest Policy

Purpose

This conflict of interest policy protects the interests of [CHAPTER NAME] when considering transactions that might benefit the private interest of a Director, Officer, or Key Employee.

When This Applies

A conflict of interest exists when someone in leadership has a financial interest in a transaction the organization is considering. This isn't automatically prohibited — but it must be handled properly.

Examples of Potential Conflicts

• Hiring a board member's company for services
• Renting space from someone connected to leadership
• Paying a board member for work
• Contracting with a family member of leadership

Required Disclosure

All leaders must disclose any financial interest when:

• They acquire a financial interest during their term
• Any matter comes before the board in which they have an interest

Disclosure must be:

• In writing
• To the full board
• Including all material facts

Failure to disclose a known conflict may be grounds for removal.

Review Process

1. Disclosure

The person with the conflict shares all material facts with the board.

2. Non-Participation

The conflicted person leaves the room during deliberation and voting.

3. Determination

The remaining board members determine if the transaction is:

• Fair and reasonable
• In the best interests of the organization
• Comparable to what could be obtained elsewhere

4. Documentation

Meeting minutes must record:

• Who had the conflict and what it was
• Who was present for discussion
• What alternatives were considered
• The final decision

Compensation Decisions

Anyone receiving compensation from the organization cannot vote on matters related to their own compensation.

Annual Requirements

Each Director, Officer, and Key Employee must annually:

1. Disclose any entities where they or relatives have ownership or employment that does business with the chapter
2. Sign a statement confirming they've read and will follow this policy

Definitions

Financial Interest: Would receive economic benefit from a transaction with the organization

Related Party: Directors, officers, key employees, their relatives, or entities they control

Independent Director: Someone without financial ties to the organization (hasn't been an employee in 3 years, relatives aren't key employees, doesn't receive more than $10,000 in compensation, etc.)

Adoption

[Space for chapter adoption date and secretary signature]