FCI - Conflict of Interest Policy
The purpose of this policy is to avoid conflicts between the interest of Five Colleges, Incorporated and its affiliate Five College Net LLC (collectively, the “Organization”) and the personal or professional interests of its directors, officers and staff members. This policy applies to any director, officer, member of a committee with governing board delegated powers, or key employee. For purposes of this policy a “key employee” means an employee of the Organization (other than an officer or director) who has substantial authority to negotiate contracts or services on behalf of FCI and/or managing authority over one or more FCI financial accounts. The list of key employees shall be prepared by the Executive Director and reviewed by the Board of Directors annually. Every director, officer, delegated-power committee member and key employee shall be referred to herein as a “Person.”
Definition: A conflict of interest arises when a Person or that Person’s member institution may benefit from a decision said person could make on behalf of the Organization. The conflict of interest policy consists of a set of procedures to follow to avoid the possibility that Persons and their institutions may receive an inappropriate benefit.
A Person has a potentially conflictual interest if the person has, directly or indirectly, through business, investment, or immediate family[1] relationship:
- An ownership or investment interest in, or a governance or management role with, any entity with which the Organization has a transaction or arrangement.
- A compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement, or
- A potential ownership or investment interest, governance or management role, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
An interest as described above is not necessarily a conflict of interest. A Person who has such an interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exits.
Policy: Persons are expressly prohibited from using their governance or employment position to gain favorable or preferential access to vendors, investment advisors, or organizations for their own benefit. Any Person in a position to influence an Organizational business decision for which he/she may materially benefit must disclose the nature of the conflict to the Board or committee as appropriate or his/her immediate supervisor. No Person shall participate in the appointment, employment, promotion, supervision or evaluation of members of his/her immediate family or a person to whom they have a personal or legal obligation.
Disclosure: Each Person shall annually sign a statement which affirms such Person:
- Has received a copy of the conflicts of interest policy,
- Has read and understands the policy,
- Has agreed to comply with the policy, and
- Understands the Organization is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
The Disclosure Statements shall be filed with the Clerk of the Board of Directors annually. The Clerk will accumulate all disclosure statements and furnish them to the Board of Directors and Audit Committee. The Clerk will be responsible for ensuring compliance by the full population covered by this policy and report to the Board of Directors those individuals failing to furnish an annual statement.
In the period between the filing of the annual statements, any Person who believes that they may have a conflict of interest with respect to this policy or any particular transaction shall promptly and fully disclose the potential conflict to the Clerk and shall refrain from participating in any transactions or decisions of the Organization that may be impaired by the potential conflict until its review and conclusion by the Board of Directors.
The Organization does not prohibit the employment of individuals with significant relationships with the Organization. Significant relationships may include personal or family. It does, however, prohibit the supervision of an employee by an individual with whom that individual has a significant relationship who has or may have the ability to influence salary, promotion, work assignments, or other working conditions.
Conflict Resolution: In all instances where a conflict of interest does exist, such conflicts and their remedy, shall be disclosed to the Board of Directors at their next meeting. In general, when Persons are deemed to be in a conflict of interest situation with respect to any matter before the Board or administration, that individual shall refrain from participating in the consideration of any proposed transaction which may be impaired by the potential conflict, unless specifically requested to provide information regarding the transaction in question. Such a Person shall not vote on or take any position for or against the proposed transaction. When deemed appropriate, a notification shall be made in the minutes of the meeting that the Person involved neither participated in the consideration of the proposed transaction nor voted on the matter.
Approved by the Five College Board of Directors, 12 May 2009; Reaffirmed by Board, 1 September 2009; Revised by Board 22 April 2020