Since the November 8, the news media has been prolific in analyzing every angle of Donald Trump’s election to President of the United States. The day after the election, Bloomberg captured a question I had not previously considered: what happens when “Donald Trump, the businessman, is about to run headlong into Donald Trump, the president”? The second sentence goes on to say that “Trump now confronts more potential conflicts of interest than any other president in U.S. history.” Certainly, there has been lots of discussion from the media on this issue. How should President-Elect Trump handle this conflict of interest? I don’t know.
I do know that—with conflict of interest at the forefront and many nonprofits holding their annual meetings—this is a great time to think about conflict of interest in your nonprofit. Conflict of interest is a boring topic to explore until the whistle is blown and then things get really exciting in a really bad way. Handled poorly it can threaten the very existence of your agency and the impact it makes. The “Three Cups of Tea” scandal involving the Central Asia Institute is a prime example of the damage that can happen. The best way to avoid that “excitement” is to manage potential conflicts before they become a problem.
Here are three practical steps to manage conflict in your agency:
- Establish a Policy – A clear policy, effectively enforced can prevent 98% of your problems. A good policy should define what conflict of interest is, who is covered under the policy, and how real and perceived conflicts should be handled. The National Council of Nonprofits and Board Source have some great resources for getting your policy in order.
- Affirm it Annually – Every year, often at the annual meeting of the board, distribute the policy to board members and covered staff members and require their receipt of the policy. They should also disclose any conflicts, real or perceived, that may exist.
- Document Diligently – You should not only encourage members to disclose potential conflicts in writing but document how the board or a designated committee determines to manage that conflict. Note in minutes any plans in managing a conflict as well as when leaders recuse themselves from decision making when a conflict of interest is present.
While you may not be able to avoid every conflict, you can make steps to effectively manage it in a spirit of transparency. Doing so takes a little effort but prevents big problems down the road.
