Conflict of Interest Policy

Organization: [ORG]
Adopted by the Board of Directors: [DATE]
Last reviewed: [REVIEW_DATE]
Policy owner: [GOVERNANCE_COMMITTEE / BOARD SECRETARY]
Applies to: Directors, officers, committee members with board-delegated authority, and [KEY_EMPLOYEES]

Template notice. This is a starting template for [ORG]. Have counsel tailor definitions, quorum rules, and approval standards to your jurisdiction, entity type (nonprofit / for-profit / cooperative), and governing documents. Replace all bracketed placeholders before adoption.

1. Purpose

[ORG] expects every Covered Person to put the organization’s interests ahead of personal gain when acting in an official capacity. This Conflict of Interest Policy (the “Policy”) operationalizes the duty of loyalty by:

Defining conflicts of interest (actual, potential, and apparent);
Requiring timely disclosure;
Prescribing recusal and disinterested approval;
Requiring documentation in minutes and the board portal; and
Establishing an annual review and questionnaire cycle.

The Policy is preventive infrastructure, not an accusation process. Disclosure is a fiduciary duty, not an admission of wrongdoing.

2. Covered Persons

“Covered Persons” include:

All members of the Board of Directors of [ORG];
Officers of [ORG] (including the Chief Executive Officer / Executive Director and [OTHER_OFFICERS]);
Members of board committees that exercise board-delegated authority;
[KEY_EMPLOYEES / SENIOR STAFF AS DESIGNATED BY THE BOARD]; and
Any other person the Board designates in writing.

Family members and related entities of Covered Persons are relevant to conflict analysis as described below, even when those persons are not themselves Covered Persons.

3. Definitions

Conflict of interest. A situation in which a Covered Person has a personal, financial, or other interest — directly or through a Related Party — that could reasonably be expected to influence, or appear to influence, that person’s judgment on a matter before [ORG].

Financial interest. Ownership (beneficial or of record) of more than [OWNERSHIP_THRESHOLD, e.g., 5%] of an entity; compensation, consulting fees, royalties, or contingent payments; loans; or other material economic benefit from a counterparty to a proposed or existing transaction with [ORG].

Related Party. A Covered Person’s spouse or domestic partner; parents, children, siblings (including in-laws and step-relations); anyone sharing the Covered Person’s household; and any entity controlled by, or employing, such persons in a decision-making role regarding the transaction.

Interested Person. A Covered Person who has a conflict (or whose Related Party has a conflict) with respect to a particular matter.

Appearance of conflict. Circumstances that a reasonable third party could perceive as compromising independence, even if the Covered Person believes judgment is unaffected.

4. Duty to Disclose

4.1 Annual disclosure

Each Covered Person shall complete [ORG]’s Conflict of Interest Questionnaire within [30] days of joining and annually by [ANNUAL_DUE_DATE]. Questionnaires are collected by [BOARD_SECRETARY / GOVERNANCE_OFFICER], retained per the Document Retention Policy, and summarized for the [GOVERNANCE / AUDIT] Committee.

4.2 Transaction-specific disclosure

Before discussion of any matter in which a conflict may exist, the Interested Person shall disclose the nature of the interest to the Board or committee, with enough detail for disinterested members to evaluate fairness. Disclosure may be oral for urgent items but must be confirmed in writing within [5] business days.

4.3 Ongoing duty

Covered Persons must update disclosures promptly when facts change (new vendor relationships, new outside board seats, family employment changes, gifts above threshold, etc.).

5. Recusal and Process

When a conflict is disclosed or identified:

The Interested Person leaves the room (or virtual meeting) for deliberation and voting, unless the disinterested majority invites them solely to answer factual questions.
The Interested Person does not vote and is not counted toward quorum for that item if [BYLAWS / APPLICABLE LAW] so provide.
Disinterested directors determine whether the transaction or arrangement is fair, reasonable, and in [ORG]’s best interest, after considering alternatives where practical.
Minutes record: the disclosure; who recused; that the Interested Person was absent for deliberation/vote; the alternatives considered; and the basis for approval or rejection.
Materials related to the conflict are tagged in the board portal and available to disinterested directors.

If a majority of the Board is interested in a matter, the Board shall consult counsel on special approval procedures (e.g., independent committee, fairness opinion, member/shareholder approval as applicable).

6. Approval Standards

Disinterested directors shall approve a conflicted transaction only if they reasonably conclude that:

The terms are at least as favorable to [ORG] as arms-length alternatives reasonably available;
The transaction advances [ORG]’s mission or legitimate business purposes; and
Any compensation or benefit is reasonable given comparability data where relevant.

For nonprofits subject to intermediate sanctions or analogous rules, the Board shall follow counsel’s process for rebuttable presumption of reasonableness where available (comparability data, contemporaneous documentation, disinterested approval).

7. Compensation of Interested Persons

Compensation of the CEO / Executive Director and other [KEY_EMPLOYEES] shall be reviewed by the [COMPENSATION / GOVERNANCE] Committee composed of disinterested directors, using comparability data as appropriate, with full Board ratification as required by [BYLAWS]. No Interested Person shall participate in setting their own compensation.

8. Gifts, Hospitality, and Favors

Covered Persons shall not accept gifts, entertainment, or favors from vendors, donors, customers, or other counterparties of [ORG] that could influence, or appear to influence, official action. Modest items of [GIFT_THRESHOLD, e.g., $75] or less in aggregate per source per year are generally permitted if disclosed when material to a pending decision. Cash and cash equivalents are prohibited. Travel paid by counterparties requires prior approval by [CHAIR / CEO] and disclosure to the Board when related to a board-level matter.

9. Dual Service and Outside Affiliations

Covered Persons shall disclose other board seats, officer roles, and material consulting arrangements. Dual service with a competitor, major vendor, or grant recipient is not automatically prohibited but requires heightened disclosure and, where appropriate, standing recusal protocols agreed with the Chair.

10. Records and Portal Hygiene

[ORG] shall maintain in its board portal (or equivalent secure repository):

This Policy and adoption/review dates;
Annual questionnaires and summaries;
Minutes reflecting conflict handling; and
Any standing recusal lists.

Access to sensitive conflict files may be limited to the Chair, committee chairs, counsel, and Board Secretary as needed.

11. Violations

Failure to disclose a known conflict, or knowing participation in a prohibited transaction, may result in censure, removal from committees, recommendation for removal from the Board consistent with [BYLAWS], employment discipline for staff, and other remedies. Good-faith reporters of Policy violations are protected under [ORG]’s Whistleblower Policy.

12. Annual Review

The [GOVERNANCE] Committee shall review this Policy at least annually, recommend updates, and report questionnaire completion rates to the Board. Material amendments require Board approval. Next scheduled review: [NEXT_REVIEW_DATE].

Appendix A — Annual Questionnaire (starter)

List entities in which you or a Related Party hold ownership above [OWNERSHIP_THRESHOLD] or serve as director/officer.
Describe any transactions with [ORG] in the past 12 months involving you or a Related Party.
List other boards and note any competitive or vendor overlap with [ORG].
Disclose gifts or hospitality from [ORG] counterparties above [GIFT_THRESHOLD].
Disclose family members employed by [ORG] or seeking employment.
Certify that you have read this Policy and will disclose conflicts promptly.

Signature / Date: _______________________ / [DATE]

Appendix B — Meeting script (Chair)

“Before we take up [AGENDA ITEM], please disclose any personal or financial interest you or a related party may have in this matter. [Pause.] [Name] has disclosed [brief description] and will recuse. We will deliberate and vote without the interested director present. The Secretary will record the disclosure, recusal, and our rationale.”