Policy: Conflict of Interest

CONFLICT OF INTEREST POLICY

 

Policy Title:  Conflict of Interest	Applies To:  BPIA decision making processes
Effective Date:  1/1/2022	Policy to be carried out by:  All BPIA directors and officers, and all non-Board members of committees
Date of update or amendment:	Oversight:  Board of Directors
Date of Board approval: 2022	Infraction remedies: Infractions of this policy will be addressed by the Board of Directors and may result in termination of position.

 

Policy Purpose

The purpose of this policy is to protect the interests of this tax-exempt corporation (the "BPIA”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of BPIA 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.

Policy Statement

Directors, officers, and non-Board committee members shall avoid situations in which they may be in a position of conflict of interest or perceived conflict of interest.  The BPIA bylaws contain provisions with respect to conflict of interest that must be strictly adhered to. In addition to the bylaws, the process set out in this policy shall be followed when a conflict or potential conflict arises.

Definitions

Officer: Board officers, including the president, a vice president, secretary or assistant secretary, treasurer or assistant treasurer, as well as others who perform functions for BPIA similar to those normally performed by such officers.

Interested Person:  Any director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.

Financial Interest: 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 BPIA has a transaction or arrangement,

b.   A compensation arrangement with BPIA or with any entity or individual with which BPIA has a transaction or arrangement, or

c.   A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which BPIA is negotiating a transaction or arrangement. Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.

A financial interest is not necessarily a conflict of interest. Under Article III, Section 2, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.

Description of Conflict of Interest

A conflict of interest arises in any situation where a Director's duty to act solely in the best interests of BPIA and to adhere to his or her fiduciary duties is compromised or impeded by any other interest, relationship or duty of the Director. A conflict of interest also includes circumstances where the Director's duties to BPIA are in conflict with other duties owed by the Director such that the Director is not able to fully discharge the fiduciary duties owed to BPIA.

The situations in which potential conflict of interest may arise cannot be exhaustively set out. Conflicts generally arise in the following situations:

1.      Transacting with BPIA: When a Director transacts with BPIA directly or indirectly, or when a Director has a material direct or indirect interest in a transaction or contract with BPIA.

2.      Interest of a Relative: When BPIA conducts business with suppliers of goods or services or any other party of which a relative or member of the household of a Director is a principal, officer or representative.

3.      Gifts: When a Director or a member of the Director’s household or any other person or entity designated by the Director, accepts gifts, payments, services or anything else of more than a token or nominal value from a party with whom BPIA may transact business (including a supplier of goods or services) for the purposes of (or that may be perceived to be for the purposes of) influencing an act or decision of the Board.

4.      Acting for an Improper Purpose: When Directors exercise their powers motivated by self‑interest or other improper purposes. Directors must act solely in the best interest of BPIA. Directors who are nominees of a particular group must act in the best interest of BPIA even if this conflicts with the interests of the nominating party.

5.      Appropriation of Corporate Opportunity: When a Director diverts to his or her own use, an opportunity or advantage that belongs to BPIA.

6.      Duty to Disclose Information of Value to BPIA: When Directors fail to disclose information that is relevant to a vital aspect of BPIA’s affairs.

Serving on Other Corporations: A Director may be in a position where there is a conflict of “interest and duty”. This may arise where the Director serves as a Director of two corporations that are competing or transacting with one another.  It may also arise where a Director has an association or relationship with another entity. For example, if two corporations are both seeking to take advantage of the same opportunity. A Director may be in possession of confidential information received in one Boardroom or related to the matter that is of importance to a decision being made in the other Boardroom.  The Director cannot discharge the duty to maintain such information in confidence while at the same time discharging the duty to make disclosure.  The Director cannot act to advance any interests other than those of BPIA.

 

Disclosure of Conflicts

A Director, officer or committee member who is in a position of conflict or potential conflict shall immediately disclose such conflict to the Board by notification to the president of the Board.  Where the president is involved in the conflict, notice shall be given to another officer of the Board. The disclosure shall be sufficient to disclose the nature and extent of the interest. Disclosure shall be made at the earliest possible time and, where possible, prior to any discussion and vote on the matter.

Where (i) a Director is not present at a meeting where a matter in which the Director has a conflict is first discussed and/or voted upon, or (ii) a conflict arises for a Director after a matter has been discussed but not yet voted upon by the Board, or (iii) a Director becomes conflicted after a matter has been approved, the Director shall make the declaration of the conflict as soon as possible and at the next meeting of the Board.

If an officer becomes interested in a contract or transaction after it is made or entered into, the disclosure shall be made as soon as possible after the officer becomes so interested. A Director or officer may make a general declaration of the Director's relationships and interests in entities or persons that give rise to conflicts. 

Process for Resolution of Conflicts of Interest

The following process shall be observed for informal and formal resolution of any conflict, whether potential, actual, or perceived.

 

1.      The conflict or potential conflict will be referred to the president of the Board.  Where the issue may involve the Board president, the conflict will be referred to another officer of the Board; similarly, in the event all officers of the Board may be involved, the issue will be referred to a non-officer member of the Board.  For purposes of this policy, the Board member to whom the conflict of interest has been referred will be known as the “chair” of the process of resolution.

2.      The chair may either (i) attempt to resolve the matter informally, or (ii) refer
the matter to either the Executive Committee or to an ad hoc sub‑committee of the Board established by the chair, which sub‑committee shall report to the Board.

 

3.      If the chair elects to attempt to resolve the matter informally and the matter cannot be  
 informally resolved to the satisfaction of the chair, the Director referring the matter and the Director involved then the chair shall refer the matter to the Executive Committee of the Board.

 

4.      An interested person may make a presentation at the committee 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 possible conflict of interest.

 

5.      The chair may, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.

 

6.      After exercising due diligence, the chair and committee, shall determine whether BPIA 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.

 

7.      If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the chair and committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in  BPIA'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.

 

8.      If the committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.

 

9.      If, after hearing the member's response and after making further investigation as warranted by the circumstances, the committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate corrective action.

 

A decision of the Board by majority resolution shall be determinative of the matter.

It is recognized that if a conflict, or other matter referred cannot be resolved to the satisfaction of the Board (by simple majority resolution) or if a breach of duty has occurred, a Director may be asked to resign or may be subject to removal pursuant to the bylaws and applicable legislation.

Perceived Conflicts

It is acknowledged that not all conflicts or potential conflicts may be satisfactorily resolved by strict compliance with the bylaws. There may be cases where the perception of a conflict of interest or breach of duty (even where no conflict exists or breach has occurred) may be harmful to BPIA notwithstanding that there has been compliance with the bylaws. In such circumstances, the process set out in this policy for addressing conflicts and breaches of duty shall be followed. It is further recognized that the perception of conflict or breach of duty may be harmful to BPIA even where no conflict exists or breach has occurred and it may be in the best interests of BPIA that the Director be asked to resign.

Records of Proceedings

The minutes of the meeting/s related to any conflict of interest contain:

 

1.      The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the committee's decision as to whether a conflict of interest in fact existed.

2.      The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.

 

 

Annual Statements

Each director, principal officer and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:

 

1.      Has received a copy of the conflicts of interest policy,

2.      Has read and understands the policy,

3.      Has agreed to comply with the policy, and

4.      Understands BPIA is charitable 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.

 

Periodic Reviews

To ensure BPIA operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted of this conflict of interest policy and its procedures. The periodic reviews shall, at a minimum, include the following subjects:

 

1.      Whether partnerships, joint ventures, and arrangements with management organizations conform to BPIA'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.

 

Use of Outside Experts

When conducting the periodic reviews, BPIA may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews of the policy and procedures for addressing conflicts of interest are conducted.