YALE CHINA ASSOCIATION, INC. Conflict of Interest Policy
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1 YALE CHINA ASSOCIATION, INC. Conflict of Interest Policy The Yale China Association, Inc. (the Association ) has adopted this Conflict of Interest Policy to protect the interests of the Association when it is contemplating entering into a transaction or arrangement that might benefit the private interests of a member of the Board of Trustees of the Association (the Board ), an officer of the Association, or an employee of the Association, 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 conflict of interest applicable to nonprofit and charitable organizations. Definitions A Conflict of Interest occurs when the Financial Interest or Personal Interest of a Responsible Person interferes, or appears to interfere, in any way with the interests of the Association. An Interested Transaction is a transaction (i) between the Association and a Responsible Person in which the Responsible Person has a Financial Interest or Personal Interest or (ii) that might result in an Excess Benefit Transaction. An Interested Transaction is not necessarily a Conflict of Interest. A Responsible Person will be presumed to have a Conflict of Interest if the Board decides that a Conflict of Interest exists with respect to such Interested Transaction. A person has a Financial Interest if the person has, directly or indirectly, through business, investment, or family: (a) an ownership or investment interest in any entity with which the Association has a transaction or arrangement, (b) a Compensation arrangement with the Association or with any entity or individual with which the Association has a transaction or arrangement, or (c) a potential ownership or investment interest in, or Compensation arrangement with, any entity or individual with which the Association is negotiating a transaction or arrangement. A Responsible Person is any Association trustee, officer, staff member or volunteer or immediate family member of the same. A person has a Personal Interest if the person may, directly or indirectly, through a personal, familial, or business relationship, benefit in a way that is not insubstantial from a transaction or may be influenced by such transaction in such person s work for the Association. An Excess Benefit Transaction as such term is used by the Internal Revenue Service means a transaction in which an economic benefit is provided by an applicable tax exempt organization, directly or indirectly, to or for the use of a disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration received by the organization. Trustee Manual - Governance 11
2 Compensation includes direct and indirect remuneration as well as non monetary items, including, but not limited to, gifts or favors that are not insubstantial. Conflict of Interest Questionnaire Each Association trustee, officer, staff member or volunteer shall sign annually the Conflict of Interest Questionnaire substantially in the form attached hereto as Exhibit A. Duty to Disclose In connection with any actual or possible Conflict of Interest, a Responsible Person must disclose the existence of an Interested Transaction and be given the opportunity to disclose all material facts to the Board. Such Responsible Person shall not otherwise seek to participate in or influence the decision by the Board as to whether to proceed with the Interested Transaction. Procedure for Addressing a Conflict of Interest After exercising due diligence, including consideration of any alternate transaction or arrangement that would not give rise to a Conflict of Interest, the Board shall make its decision as to whether to enter into an Interested Transaction that contains a Conflict of Interest. Records of Proceedings Regarding an Interested Transaction or Conflict of Interest Following a determination by the Board regarding an Interested Transaction, the minutes of the Board and all committees with board delegated powers shall contain but not be limited to: (i) the names of the Responsible Persons who disclosed or otherwise were found to have an actual or potential Interested Transaction; (ii) a summary of facts for such actual or potential disclosed Interested Transaction; (iii) the names of the Trustees who were present for discussions of the Interested Transaction; (iv) a summary of the content of the discussion; and (v) the votes of such person(s) relating to the Interested Transaction, and a record of any votes taken in connection with the proceedings. Compensation A voting member of the Board who receives Compensation, directly or indirectly, from the Association for services is precluded from voting on matters pertaining to that member's Compensation. A voting member of any committee of the Board 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. Violations of the Conflicts of Interest Policy Responsible Persons who do not comply with this Conflict of Interest Policy may be subject to disciplinary action. Periodic Reviews To ensure that the Association operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax exempt status, periodic reviews shall Trustee Manual - Governance 12
3 be conducted. The periodic reviews shall, at a minimum, include the following subjects: (a) whether Compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm's length bargaining; and (b) whether partnerships, joint ventures, and arrangements with management organizations 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 an Excess Benefit Transaction. Use of Outside Advisors When conducting periodic reviews, the Association 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. Adopted by the Board of Trustees of the Association on January 21, Trustee Manual - Governance 13
4 EXHIBIT A YALE CHINA ASSOCIATION, INC. (The Association ) CONFLICT OF INTEREST QUESTIONNAIRE 1. Please list all corporations, partnerships, associations, or other organizations of which you are a director, trustee, partner, or member Please list all corporations, partnerships, associations, or other organizations of which you are an officer or employee. 3. Please list all corporations, partnerships, associations, or other organizations in which you have a material financial interest. 2 1 For questions 1 5, responses may be limited to situations in which an actual or potential Conflict of Interest exists. 2 The determination of what constitutes a material financial interest involves the exercise of personal judgment but, at a minimum, it includes entities in which you and all individuals or entities having significant relationships with you own, in the aggregate, more than (a) 1 percent of any class of the outstanding securities of a firm or corporation; (b) 10 percent interest in a partnership or association; or (c) 5 percent of the total direct and beneficial assets or income of the person. Trustees may disclose additional detailed information about their financial interests, if they wish. Trustee Manual - Governance 14
5 4. Please list all business dealings that you, your family members, 3 and/or entities listed in paragraphs 1 3 above have had with the Association in the past year. 5. Please list any business dealings contemplated, considered, or proposed between the Association, and you, your family members, and/or entities listed in paragraphs 1 3 above. 6. Please list any relationships or business dealings that you have had with any trustee or staff member of the Association in the past year. By: Name: Title: Date: 3 Family members include spouse or domestic partner, parents, siblings, children, stepchildren, grandparents, grandchildren, and in laws. Trustee Manual - Governance 15
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