UMass Amherst Alumni Association

Transcription

1 UMass Amherst Alumni Association Policy/Procedure: Conflicts of Interest Policy Board Approval: June 6, 2009 Amended: February 7, 2015 Purpose The purpose of this policy is to protect the interests of the University of Massachusetts Amherst Alumni Association, Inc. (the Association ), a Massachusetts nonprofit corporation and tax exempt organization. This policy is intended to supplement, but not replace, any applicable state and/or federal laws governing conflicts of interest applicable to nonprofit and charitable organizations, including the Association s Volunteer Code of Conduct statement adopted by the Board of Directors on May 10, A. General It is the policy of the Association that all directors, principal officers and/or members of a committee with governing board delegated powers and those who have served in that capacity in the previous twelve (12) months (hereinafter referred to as the Interested Party or Interested Parties ) shall fully disclose to the Association any interest that could result in a potential conflict of interest. A conflict of interest shall exist in any instance where the actions or activities of an Interested Party (or the spouse or immediate family member of an Interested Party) also involve obtaining direct or indirect personal gain or advantage, or an adverse or potentially adverse effect on the interests of the Association. A conflict of interest transaction is one between the Association and an Interested Party, or between the Association and another association, business or organization for which an Interested Party is an officer or a director or involved in the management of such other association, business or organization, or in which an Interested Party has a material financial interest such that said interest could influence his or her action on the matter while acting on behalf of the Association. Conflicts of interest can also arise in other instances. Each Interested Party must promptly report situations, which might create a conflict of interest, to the President of the Association (the President ) 1 as he or she becomes aware of such situations, and shall be given the opportunity to disclose and discuss all material facts to the Board of Directors considering such conflict of interest or potential conflict of interest. In addition, each Interested Party must execute a Conflict of Interest Disclosure Statement at least annually as set forth in Section D of this Policy. B. Types of Conflicts of Interest Although it is impossible to list every circumstance giving rise to a potential conflict of interest, the following shall serve as a non-exclusive guide to the types of activities that might cause conflicts of interest and that should be fully reported to the President. In the event there is a question with respect to the existence of a conflict of interest, full disclosure of any situation in doubt shall be 1 In instances where the President has situations, which might create a conflict of interest, he or she shall report these situations directly to the Audit Committee. - 1

2 made to the Board of Directors or a committee thereof, as the case may be, so as to permit an impartial and objective determination by the Board of Directors. 1. Outside interests: The personal interests of an Interested Party may conflict with the interests of the Association if he or she, or any of his or her immediate family members, by blood or marriage, is a person: a. Who solicits, bids, contracts, or supplies goods or services to the Association (including, but not limited to, legal services, accounting services, insurance services and banking services); b. From whom or to whom the Association, either directly or indirectly, leases or licenses property or equipment; c. With whom the Association is dealing or is planning to deal in connection with the purchase or sale of real property, investment securities or other property; d. Who has an ownership interest, either directly or indirectly, or management position in other organizations or entities which compete with the Association; e. Who has a material financial interest through ownership, either directly or indirectly, of stock or other type of equity interest in a person, company or organization that is engaging in transactions with the Association of the type listed in (a) through (d) above; f. Who has a material financial interest, either directly or indirectly, as a creditor of a person, company or organization that is engaging in transactions with the Association of the type listed in (a) through (d) above; or g. Who is an officer, serves on the board of directors, participates in management, or is otherwise employed by a person, company or organization that is engaging in transactions with the Association of the type listed in (a) through (d) above. 2. Consultant Services: It may be a conflict of interest to have a relationship, financial or otherwise, with any person, company or organization, which furnishes consulting or professional services to the Association. 3. Gifts, Gratuities and Entertainment: It may be a conflict of interest to accept compensation, direct or indirect, gifts, excessive entertainment, unsecured loans, or other favors from the Association or any other entity or individual that does, or is seeking to do, business with, or is a competitor of the Association under circumstances from which it might be inferred that such action was intended to influence or possibly would influence the individual in the performance of his or her duties. This does not include the acceptance of items of nominal or minor value that are clearly tokens of respect or friendship and not related to any particular transaction or activity of the Association. 4. Inside Information: It is a conflict of interest to disclose or use information relating to the Association s business for personal profit or advantage of any individual or his/her immediate family. - 2

3 C. Other Areas of Conflicting Interest The areas which can create conflict of interest situations listed in Paragraph B above are examples only and are not intended to be an exhaustive list of situations in which an Interested Party may have a potential conflict of interest with the Association. Each Interested Party must recognize other analogous areas in which a conflict of interest may arise and must disclose these situations to the attention of the President, who shall disclose such matters to the Board of Directors when he or she becomes aware of the same. D. Procedure It shall be the policy of the Association that all actual and potential conflicts of interest situations involving Interested Parties be handled in the following manner: 1. An Interested Party must disclose the material facts of any matter which may result in a conflict of interest or potential conflict of interest on the part of the Interested Party to the President, who shall disclose such material facts to the Board of Directors, and such conflict of interest or potential conflict of interest must be made a matter of record, either through an annual Disclosure Statement or by the President s disclosure to the Board of Directors. Further, each Interested Party must be given the opportunity to disclose all material facts to the Board of Directors who will make a determination as to whether there exists a conflict of interest. The Board of Directors may pose questions to the disclosing party relating to the conflict of interest or potential conflict of interest and the disclosing party shall be given an opportunity to discuss such material facts with the Board of Directors. 2. In addition to the disclosure by the Interested Party and discussion of the same with the Interested Party and the Board of Directors, the following steps may be taken in connection with a determination of the existence of a conflict of interest. a. An Interested Party may make a presentation at a Board of Director s meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the potential conflict of interest. The minutes of the meeting shall reflect that a disclosure was made and that the disclosing party was excused during discussion and voting on the determination of the existence of a conflict of interest. b. The President, with the Audit Committee s approval, shall appoint, if appropriate, a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement that causes or may cause a conflict of interest. c. After exercising due diligence, the Board of Directors shall determine whether the Association can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest. d. If a more advantageous transaction or arrangement is not reasonably potential under circumstances not producing a conflict of interest, the Board of Directors shall determine by a majority vote of the disinterested directors, whether the transaction or arrangement is in the Association s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, it shall make its decision as to whether to enter into the transaction or arrangement. 3. After Disclosure of such conflict of interest or potential conflict of interest and the Board of Directors taking any of the steps set forth in Paragraph 2 above, the remaining members of the - 3

4 Board of Directors must discuss and vote on the determination of the existence of a conflict of interest. The Board of Directors must approve the transaction by a majority vote of the Directors present at the meeting after the excusal of the disclosing party. In reviewing such transactions between the Association and vendors or other contractors who are, or are affiliated with, Interested Parties, the Board of Directors shall act no more or less favorably than it would in reviewing transactions with unrelated third parties. 4. The minutes of the Board of Directors meeting during which the existence of a conflict of interest is determined shall contain the following: a. The names of the persons who disclosed or otherwise were found to have an actual or potential conflict of interest, the nature of the interest and any action taken to determine whether a conflict of interest was present and the Board s decision as to whether a conflict of interest existed; and b. The names of the persons who were present for discussions and/or votes relating to the transaction or arrangement and the potential conflict of interest, including any alternatives to the proposed transaction or arrangement causing the conflict of interest, and a record of any votes taken in connection with the same. The content of the discussion may, at the Board of Directors discretion and vote, be subject to Executive Session. 5. The Association shall not engage in any transaction with another entity which has one or more Directors (or managers of a limited liability company) in common with this Association, unless, after the common Director (or manager) discloses the material facts of the transactions and the details of his or her affiliation with the other entity, the Association s Board of Directors approves the transaction in good faith by a majority vote without counting the vote of the common Director(s). 6. The disclosure and approval requirements of this policy do not apply to any action by the Association s Board of Directors fixing the compensation for a Director of the Association, provided that such compensation does not relate to such Director s employment by the Association, which in such case, the Employee-Director may not participate in such proceeding in accordance with Paragraph 2 herein. 7. Annually, the President of the Association will send to all Interested Persons, except those who have ceased serving as a director, principal officer and/or member of a committee with governing board delegated powers in the previous twelve (12) months, a copy of this Statement of Policyand a Conflict of Interest Disclosure Statement to be completed and returned. Such Statement shall state that the person signing: a. Has received a copy of the conflict of interest policy b. Has read and understands the policy; c. Has agreed to comply with the policy; and d. Understands that the Association is a charitable organization and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. 8. The President of the Association, or his or her designee, shall review each completed Disclosure Statement, shall make such further investigation of potential conflicts of interest as he or she may deem appropriate, and shall then make an appropriate report to the Board of Directors concerning such review and investigation. - 4

5 9. If the President, or his or her designee, or the Board of Directors has reasonable cause to believe a member of the Board of Directors has failed to disclose an actual or potential conflict of interest, the President, his or her designee, as the case may be, shall inform such Director of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. If after hearing such Director s response and making further investigation in accordance with this Section D, the Board of Directors determines that such Director has failed to disclose an actual or potential conflict of interest, it shall take appropriate disciplinary and corrective actions, which actions may include removal of such Director from the Board of Directors in accordance with the Association s By-Laws. E. Compensation 1. A voting member of the Board of Directors who receives compensation, directly or indirectly, from the Association for services is precluded from voting on matters pertaining to that member s compensation. 2. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Association for services is precluded from voting on matters pertaining to that member s compensation. 3. No voting member of the Board of Directors whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Association, either individually or collectively, is prohibited from providing information to any committee regarding compensation. F. Periodic Reviews 1. To ensure the Association operates in a manner consisted with its charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted and at a minimum shall include the following: a. Whether compensation arrangements and benefits are reasonable, based on competent survey information and the result of arms length bargaining. b. Whether partnerships, joint ventures, and arrangements with management organizations, if any, conform to the Association s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement, impermissible private benefit or in an excess benefit transaction. 2. When conducting periodic reviews as described above, the Association may, but is not required to, use outside advisors. If outside advisors are used their use shall not relieve the Board of Directors of its responsibility for ensuring that periodic reviews are conducted. - 5