Conflict of Interest Avoidance, Disclosure, & Documentation
Work With a Dallas Nonprofit Attorney Today
When creating or managing a nonprofit organization, it is vital that you
avoid any conflict of interest. When these matters do arise or have to
be dealt with, Perliski Law Group is ready to step in and provide the
legal counsel needed during this time. A conflict of interest occurs when
an officer or director of a nonprofit personally profits or has personal
interest in a transaction taking place. If this is the case, the transaction
will be "tainted", unless either full disclosure was made and
authorization or ratification is obtained or, the transaction appears
fair to the organization. Disclosure and approval can be gained from the
board of directors or members of the nonprofit, depending on the structure.
An example of a conflict of interest would be if an individual served as
a director for more than one non-profit organization and both organizations
engaged in a transaction. Since a director has indirect interest in a
transaction if they have material or financial interest in the other party involved.
Protecting Your Company with a Conflict of Interest Policy
A properly drafted conflict of interest policy can be an essential document
for new and old nonprofits alike. This policy can be used to shield and
protect the interests of your exempt organization when it enters into
conflicting transactions. It can also protect officers and directors from
personal liability, ensuring that every situation is handled in the best
When you have this policy in writing, it is valuable to have the board
members or other important figures review it at least once a year. It
may also be helpful to discuss situations that may result in a conflict
of interest in order to keep everyone aware of potential problems. Overall,
the policy should be clear and direct, laying out specific requirements
for how any conflict should be handled.
If you are unsure about the policy your nonprofit has in place or still
need to draft one, our Dallas nonprofit lawyer is here to help. Feel free to
call our firm at any time to schedule a free consultation.