Conflict of Interest

A Conflict of Interest arises when a person in a position of authority over an organization, such as an officer, director, or manager, can benefit financially from a decision he or she could make in such capacity, including indirect benefits such as to family members or businesses with which the person is closely associated.

Conflicts of Interest exist, but should not necessarily prohibit an individual with the Conflict of Interest from participation in an organization, as long as the organization has a written Conflict of Interest policy.

In general, the majority of an organization's voting Board members should not be related by family or a business relationship. The individual serving as the Chief Staff Executive should not serve on the Board of the organization as a VOTING member, but may serve on the Board as a non-voting member.

A Conflict of Interest Policy defines conflict of interest, identifies the classes of individuals within the organization covered by the policy, facilitates disclosure of information that can help identify conflicts of interest, and specifies procedures to be followed in managing conflicts of interest.

Examples of Conflict of Interest

Compensated Voting Board Members
The Executive Director is a voting Board member and is compensated by the organization.
The Board Chairman is a voting Board member and is compensated by the organization.
The Board Treasurer is a voting Board member and is compensated by the organization.
A Board member serves as a compensated instructor for the organization.

Family Relationships
The Board Chairman is the husband of the Executive Director who is compensated by the organization.
The Executive Director is married to a Board Member.
Two Board members are related to each other; one member is the mother of the other Board member.
The Executive Director and an instructor are mother and daughter.
The Board Chairman and the Board Treasurer are husband and wife.
The organization employs two staff members who are sisters.
The Board Chair is the father of a staff member.
The parent of a client serves on the Board as a voting member.
The Executive Director serves on the Board as a non-voting member but is the wife of a voting Board member.
The Board Chairman and the Executive Director are husband and wife, and their daughter is an instructor.
A Board member is the parent of an instructor employed by the organization.
The President of the organization is the son of a Board member.

Business Relationships
The Executive Director owns the property at which the organization conducts its programs.
The Treasurer provides insurance services to the organization.
The organization's veterinarian serves on the Board as a voting member.
The organization's farrier serves on the Board as a voting member.
The organization's lawyer serves on the Board as a voting member.
A Board member works for the bank at which the organization has its account.
A Board member works for the company that sells horse tack and accessories to the organization.
A Board member is an employee of the facility at which the organization leases to conduct its programs.
The Executive Director is the farrier for the organization and is compensated for farrier services.
The Executive Director is the veterinarian for the organization and is compensated for veterinarian services.

Family and Business Relationship
The Board Chairman and Treasurer are husband and wife, serve as voting members of the Board and lease the facility to the organization where the organization conducts its programs.
The Board Chairman and Executive Director are husband and wife and own the facility at which the organization conducts its programs.