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Conflict-of-Interest and Disclosure Policy


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Introduction

A general rule of thumb is that any time a board member or association officer, family member, or business associate stands to gain financially (either directly or indirectly) from a specific transaction involving the association, it is a potential conflict and should be treated as such by the affected individual(s)-and the board itself.  Transactions that involve money or other tangible assets are the most serious but tend to be the easiest to resolve (or should be).

Conflict of Interest Defined

A potential conflict of interest is a situation that involves a personal, familial, or business relationship between a board member or association officer and the institution that can cause the association to be legally (or otherwise) vulnerable to criticism, embarrassment, or litigation in the opinion of responsible stakeholders.  Real and perceived conflicts of interest involve ethical or moral values, but they are distinguishable and much more visible because of two factors, one or both of which may be present.

  1. They usually involve money or profit or otherwise bear on the fiduciary responsibility of the board to ensure no board members or association officers use (or are perceived to use) their institutional affiliations for personal financial gain, except as association policy may explicitly allow.
  2. They usually involve one or more aspects of the association's programs, real property, personnel, or auxiliary enterprises.
Scope

The following statement of policy applies to each member of the board and to all officers of the National Association of Independent Colleges and Universities (NAICU).  It is intended to serve as guidance for all persons employed by the association in positions of significant responsibility and authority and all members serving on the board of directors.

Fiduciary Responsibilities

Board members, officers, and employees of NAICU serve the public trust and have a clear obligation to fulfill their responsibilities in a manner consistent with this fact.  All decisions of the board and officers of the association are to be made solely on the basis of a desire to advance the best interests of the association and the public good.  The integrity of NAICU must be protected at all times.

Effective boards will include individuals who have relationships and affiliations that may raise questions about perceived conflicts of interest.  Although many such potential conflicts are and will be deemed inconsequential, every individual board member and officer of the association has the responsibility to ensure the entire board is made aware of situations that involve personal, familial, or business relationships that could be troublesome.  Thus, the board requires each board member and association officer annually (a) to be familiar with the terms of this policy; (b) to disclose to the board chair any possible personal, familial, or business relationships that reasonably might give rise to a conflict involving the association; and (c) to acknowledge by his or her signature that he or she is in accordance with the letter and spirit of this policy.

Disclosure

All board members and officers are requested to list on this form only those substantive relationships (a) they or members of their family maintain with organizations that do business with the association, or (b) that potentially could be construed to affect their independent, unbiased judgment in light of their decision-making authority and responsibility.

If a board member or officer is uncertain whether to list a particular relationship, the board chair and association legal counsel should be consulted.  They may elect to seek the judgment of the executive committee before informing and consulting with the entire board with an executive session.  Information shared or gathered as a result of such consultations (including information provided on this form) shall be confidential except when the association's best interests would be served by disclosure.  Such disclosure will be made only after informing those concerned.

The following definitions are provided to help board members and officers decide whether a relationship should be listed on the disclosure:

  • Business Relationship:  One in which a board member, officer, or a member of his or her family as defined below serves as an officer, director, employee, partner, trustee, or controlling stockholder of an organization that does substantial business with NAICU.
  • Family Member:  A spouse, parent, sibling, child, or any other relative if the latter resides in the same household as the board member or officer.
  • Substantial Benefit:  When a board member or a member of the board member's family (a) is the actual or beneficial owner of more than 5 percent of the voting stock or controlling interest of an organization that does substantial business with the association or (b) has other direct or indirect dealings with such an organization from which the board member or a member of the board member's family benefits directly, indirectly, or potentially from cash or property receipts totaling $10,000 or more annually.
  • Gifts or Entertainment:  Acceptance of gifts or entertainment by a Board member, officer or employee of NAICU from persons and/or organizations seeking or doing business with NAICU shall be deemed significant if such gift or entertainment is intended to influence performance of association duties.


Restraint on Participation:  Board members or officers who have declared a conflict of interest, or who have been found to have a conflict of interest, shall refrain from participating in consideration of proposed transactions unless the board or association requests information or interpretation for special reasons.  Should a conflict of interest matter require an executive committee or board vote to resolve, those concerned shall not be present at the time of the vote.

Approved by:   NAICU Board of Directors
Date:   February 7, 2006