People’s Self-Help Housing, Inc.
Conflict of Interest Policy
Conflict of Interest Policy
This Conflict of Interest Policy governs the procurement and non-procurement activities of the Board and staff of People’s Self-Help Housing, Inc. (PSHH). Questions about the policy should be directed to the Executive Director (ED). It is the duty of all Board Members and staff to be aware of this policy, and to identify conflicts of interest and situations that may result in the appearance of a conflict and to disclose those situations, conflicts, or potential conflicts to (a) the employee’s supervisor (b) the ED, or (c) the Board Chair, as appropriate. This policy provides guidelines for identifying conflicts, disclosing conflicts, and procedures to be followed to assist PSHH in managing conflicts of interest, and situations that may result in the appearance of a conflict.
1. What is a conflict of interest? A conflict of interest arises when a Board Member or staff member has a personal interest that conflicts with the interests of PSHH or in situations where a Board/staff member has divided loyalties (also known as a “duality of interest”). The former can result in situations that result in inappropriate financial gain to persons in authority at PSHH which can lead to financial penalties and violations of the regulations of the Internal Revenue Service, the Department of Housing & Urban Development, Kentucky Housing Corporation, etc. For example, a person in a position of authority over the Organization may benefit financially from a transaction between the Organization and the Board/staff member; or others closely associated with the Board/staff member may be affected financially. Family members, or their businesses, or other persons or the businesses of persons with whom the Board/staff member is closely associated, could benefit from similar transactions. Similarly, situations or transactions arising out of a conflict of interest can result in either inappropriate financial gain or the appearance of a lack of integrity in PSHH’s decision-making process. Both results are damaging to PSHH and are to be avoided.
2. Who might be affected by this policy? Typically, persons who are affected by a conflict of interest policy are the Organization’s Board Members, officers, and senior staff. PSHH takes a broad view of conflicts and the Board/staff are urged to think of how a situation/transaction would appear to outside parties when identifying conflicts or possible conflicts of interest.
3. Disclosure of Conflicts. Board/staff members will annually disclose and promptly update any disclosures previously made to the Board Chair on an Annual Conflict Disclosure Questionnaire form provided by the Organization that requests them to identify their interests that could give rise to conflicts of interest, such as a list of family members, substantial business or investment holdings, and other transactions or affiliations with businesses and other organizations or those of family members as well as other nonprofit organizations. Family members include the spouse, parent, child, brother, sister, grandparent, includes steps and in-laws, and any person cohabitating with a covered person, as well as any immediate family member related by blood, marriage, or adoption, but not distant relations such as cousins, aunts, uncles, who do not reside with the covered person.
Board and staff members are also urged to disclose conflicts as they arise as well as to disclose those situations that are evolving that may result in a conflict of interest. Advance disclosure must occur so that a determination may be made as to the appropriate plan of action to manage the conflict. Staff and Board members should disclose to the ED any conflict/potential conflict or appearance of a conflict as soon as that person becomes aware that a conflict/potential conflict exists.
4. Procedures to manage conflicts. For each conflict disclosed, the ED, the full Board, or whoever is appropriate, will determine: (a) the conflict has been properly disclosed and resolved and no further action is needed (b) disclose the situation more broadly and invite discussion/resolution by related parties on what action needs to be taken, or (c) refrain from proceeding and therefore avoid the conflict. In most cases the broadest disclosure possible is advisable so that the ED or Board can make informed decisions that are in the best interests of the organization.
1. What is a conflict of interest? A conflict of interest arises when a Board Member or staff member has a personal interest that conflicts with the interests of PSHH or in situations where a Board/staff member has divided loyalties (also known as a “duality of interest”). The former can result in situations that result in inappropriate financial gain to persons in authority at PSHH which can lead to financial penalties and violations of the regulations of the Internal Revenue Service, the Department of Housing & Urban Development, Kentucky Housing Corporation, etc. For example, a person in a position of authority over the Organization may benefit financially from a transaction between the Organization and the Board/staff member; or others closely associated with the Board/staff member may be affected financially. Family members, or their businesses, or other persons or the businesses of persons with whom the Board/staff member is closely associated, could benefit from similar transactions. Similarly, situations or transactions arising out of a conflict of interest can result in either inappropriate financial gain or the appearance of a lack of integrity in PSHH’s decision-making process. Both results are damaging to PSHH and are to be avoided.
2. Who might be affected by this policy? Typically, persons who are affected by a conflict of interest policy are the Organization’s Board Members, officers, and senior staff. PSHH takes a broad view of conflicts and the Board/staff are urged to think of how a situation/transaction would appear to outside parties when identifying conflicts or possible conflicts of interest.
3. Disclosure of Conflicts. Board/staff members will annually disclose and promptly update any disclosures previously made to the Board Chair on an Annual Conflict Disclosure Questionnaire form provided by the Organization that requests them to identify their interests that could give rise to conflicts of interest, such as a list of family members, substantial business or investment holdings, and other transactions or affiliations with businesses and other organizations or those of family members as well as other nonprofit organizations. Family members include the spouse, parent, child, brother, sister, grandparent, includes steps and in-laws, and any person cohabitating with a covered person, as well as any immediate family member related by blood, marriage, or adoption, but not distant relations such as cousins, aunts, uncles, who do not reside with the covered person.
Board and staff members are also urged to disclose conflicts as they arise as well as to disclose those situations that are evolving that may result in a conflict of interest. Advance disclosure must occur so that a determination may be made as to the appropriate plan of action to manage the conflict. Staff and Board members should disclose to the ED any conflict/potential conflict or appearance of a conflict as soon as that person becomes aware that a conflict/potential conflict exists.
4. Procedures to manage conflicts. For each conflict disclosed, the ED, the full Board, or whoever is appropriate, will determine: (a) the conflict has been properly disclosed and resolved and no further action is needed (b) disclose the situation more broadly and invite discussion/resolution by related parties on what action needs to be taken, or (c) refrain from proceeding and therefore avoid the conflict. In most cases the broadest disclosure possible is advisable so that the ED or Board can make informed decisions that are in the best interests of the organization.
- The person with the conflict (“interested party”): (a) must fully disclose the conflict to the ED who will take the disclosure to the Board or further if needed; (b) may not be involved in the decision of what action to take (e.g., may not participate in a vote) but may serve as a resource to provide Board Members with additional information.
- In some cases, the person with the conflict may be asked to recuse him/herself from sensitive discussions so as not to unduly influence the discussion of the conflict.
- In all cases, decisions involving a conflict will be made only by disinterested persons.
- The fact that a conflict was raised, addressed and resolved will be documented in the Board meeting minutes.
- The ED and the Board Chair will monitor proposed or ongoing transactions of the organization (e.g., contracts with vendors and collaborations with third parties) for conflicts of interest and disclose them to the Board and staff, as appropriate, whether discovered before or after the transaction has occurred.
