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Conflict Of
Interest Policy Agreement

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ARTICLE I
PURPOSES

 

1.1 It is important for ACDNAC’s directors, officers, staff and members of the Management Committee to be aware that both real and apparent conflicts of interest or dualities of interest sometimes occur in the course of conducting the affairs of ACDNAC and that the appearance of conflict can be troublesome even if there is in fact no conflict whatsoever. Conflicts occur because the many persons associated with the corporation should be expected to have, and do in fact generally have multiple interests and affiliations and various positions of responsibility within the community.

1.2 In these situations a person will sometimes owe identical duties of loyalty to a job or two or more corporations. The purpose of the conflict of interest policy is to protect ACDNAC’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of ACDNAC or might result in a possible excess benefit transaction. The policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit organizations. 

1.3 Conflicts are undesirable because they potentially or eventually place the interests of others ahead of ACDNAC’s mission and purpose. Conflicts are also undesirable because they often reflect adversely upon the person involved and upon the institutions with which they are affiliated, regardless of the actual facts or motivations of the parties. However, the long-range best interests of ACDNAC do not require the termination of all association with persons who may have real or apparent conflicts that are harmless to all individuals or entities involved. 

1.4 Each member of the Management Committee and the staff of ACDNAC has a duty of loyalty to ACDNAC. The duty of loyalty generally requires a director or staff member to prefer the interests of ACDNAC over the director’s/staff’s interest or the interests of others. In addition, directors, members of the Management Committee and staff of ACDNAC shall avoid acts of self-dealing which may adversely affect the status of ACDNAC or cause there to arise any sanction or penalty by a governmental authority. 

1.5 In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement.

ARTICLE II
DEFINITIONS
 

2.1 Interested Person - Any director, principal officer, or member of a committee, including the Management Committee with delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.

2.2 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 ACDNAC has a transaction or arrangement,

(b) A compensation arrangement with ACDNAC or with any entity or individual with which ACDNAC has a transaction or arrangement,

(c) A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which ACDNAC is negotiating a transaction or arrangement.

2.3 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 Management Committee and/or Directors decides that a conflict of interest exists.

ARTICLE III
PROCEDURES
 

3.1 Duty to Disclose -In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement

3.2 Determining Whether a Conflict of Interest Exists - After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the Management Committee meeting while the determination of a conflict of interest is discussed and voted upon. The directors or committee members shall decide if a conflict of interest exists.

3.3 Procedures for Addressing the Conflict of Interest - An interested person may make a presentation at a Director’s or Management 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. The Chair and/or Co-Chair of the Management Committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. 

3.4 After exercising due diligence, the Management Committee shall determine whether ACDNAC 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.

3.5 If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Management Committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in ACDNAC’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.

3.6 Violations of the Conflicts of Interest Policy

(a)  If the Management 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.

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

ARTICLE IV
RECORDS OF PROCEEDINGS
 

4.1 Minutes - The minutes of the Director’s and all Management Committee meetings with Directors and any other person that has delegated powers and/or authority relative to a conflict of interest shall contain:

(a) 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,

(b) The nature of the financial interest, any action taken to determine whether a conflict of interest was present,

(c) The Director's or Management Committee's decision as to whether a conflict of interest in fact existed

(d) The names of the persons who were present for discussions and votes relating to the transaction or arrangement,

(e) The content of the discussion, including any alternatives to the proposed transaction or arrangement, and

(f) A record of any votes taken in connection with the proceedings.

ARTICLE V
COMPENSATION
 

5.1 A voting member of the Management Committee who receives compensation, directly or indirectly, from ACDNAC for services is precluded from voting on matters pertaining to that member's compensation.

5.2 A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from ACDNAC for services is precluded from voting on matters pertaining to that member's compensation.

5.3 No voting member of the Management Committee or any other committee whose jurisdic-tion includes compensation matters and who receives compensation, directly or indirectly, from ACDNAC, either individually or collectively, is prohibited from providing information to any committee regarding compensation.

ARTICLE VI
ANNUAL STATEMENTS
 

6.1 Each director, principal officer and member of the Management Committee or any other committee, person(s) with delegated powers and/or authority shall annually sign a statement which affirms such person:

(a) Has received a copy of the conflicts of interest policy,

(b) Has read and understands the policy,

(c) Has agreed to comply with the policy, and

(d) Understands that ACDNAC is not a charity; is not a 501(c)(3) and must engage primarily in activities that will accomplish ACDNAC's mission statement.

ARTICLE VII
PERIODIC REVIEWS
 

7.1 To ensure ACDNAC operates in a manner consistent with its purpose and does not engage in activities that could jeopardize ACDNAC’s mission, periodic reviews shall be conducted.

7.2 The periodic reviews shall, at a minimum, include the following subjects:

(a) Whether compensation arrangements and benefits are reasonable, based on compe-tent survey information and the result of arm's length bargaining.

(b) Whether partnerships, joint ventures, and arrangements with management corporations conform to ACDNAC's written policies, are properly recorded, reflect reasonable invest-ment or payments for goods and services, and do not result in inurnment, impermissible private benefit or in an excess benefit transaction.

ARTICLE VIII
USE OF OUTSIDE EXPERTS
 

8.1 When conducting the periodic reviews as provided for in Article VII, ACDNAC may, but need not, use outside advisors.

 

8.2 If outside experts are used, their use shall not relieve the Directors and the Management Committee of their responsibility for ensuring periodic reviews are conducted.

 
By: George M. Sistrunk - 4/24/16

Last updated on

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