Conflict of interest is a sneaky beast that rears its head in odd places.
We speak to many people about issues of conflict. When we teach board basics – it’s one of the topics that get the most questions and conversation. It’s tricky, confusing and can catch us by surprise.
What makes the concept of conflict of interest so difficult is that the definition in the non-profit world is very different than in the for-profit world. In the for-profit world, conflict is identified by money – who has it and who wants it. In the non-profit world, conflict is defined by allegiance.
One of the legal duties of a board member is the Duty of Loyalty: The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. A Board of Trustees is supposed to be an independent group of thinkers representing the community served who pledges allegiance to the mission of the organization.
By definition, in the presence of a conflict of interest, loyalty and allegiance are challenged.
As a volunteer, it would be nearly impossible to eliminate all challenges to your loyalty and allegiance to the mission of an organization. Without being melodramatic, rarely could a board member be so devoted to a cause. The intent, then, must be to manage these conflicts – share the load with your other board members, work as a team and to help offset a situation where your allegiance is divided.
This is why it is critical to ensure that conflicts of interest between board members and staff are eliminated. Having co-workers, family members or best friends sit on a board together jeopardizes a board’s ability to govern. When boards say they can overcome the appearance of nepotism, self-serving or self-dealing they then need to spend an enormous amount of energy in proving they are successful – energy that should be spent on governance of resources.
Conflict takes away independent thinking – and independent thinking is the test of due diligence.
Boards must be deliberate about preventing conflict of interest to ensure they can maintain their duty of loyalty.
For an in-depth conversation and training about Conflict of Interest, please join us for our upcoming workshop. Click HERE for details.
Website collaboration with Courtland Consulting | Sitemap | Staff Login