What is a Conflict of Interest Policy?
A conflict of interest policy documents the procedures a board director must take when there is a conflict between their own personal interests and the best interests of the organization they serve. Such a policy requires a board director with a conflict (as well as those who believe they have a conflict) to disclose said conflict.
A conflict of interest policy includes many elements, including:
- An explanation of what constitutes a conflict of interest
- How to disclose a conflict of interest
- The process taken to review any potential conflicts of interest that have been reported
- Disciplinary action taken for not abiding by the conflict of interest policy
An undisclosed conflict of interest
can have serious consequences for an organization. Establishing a conflict of interest policy is a key step to take to reduce the risk of a conflict of interest on a board of directors.
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