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Arizona Grantmakers Forum Steering Clear of Trouble: What Every Grantmaker Should Know about Conflicts of Interest, Digital Documentation and Liability . April 3, 2014. Kendis Key Muscheid, Esq. Fennemore Craig, P.C. firstname.lastname@example.org Steve Davis, President WGM Associates, LLC
Arizona Grantmakers ForumSteering Clear of Trouble: What Every Grantmaker Should Know about Conflicts of Interest, Digital Documentation and Liability.April 3, 2014
Kendis Key Muscheid, Esq.
Fennemore Craig, P.C.
Steve Davis, President
Fiduciary Duties of Officers and Directors
Conflicts of Interest – What They Are, A Policy to Deal with Them, Examples
Electronic Documentation, Document Retention, Grantee/Donor Privacy
Introduction of D&O Insurance, General Liability Insurance, Cyber Coverage
A director’s and officer’s duties
are to be discharged:
Honesty of purpose and honesty in fact.
Be faithful to the organization’s mission and do not act in a way inconsistent with its goals.
With the care an
ordinarily prudent person
under similar circumstances.
In a manner the director/officer
to be in
the best interests
A “conflicting interest" is:
The interest an interested person
affiliated with the nonprofit
has respecting a transaction effected or proposed to be effected by the nonprofit,
if at the time of the transaction or decision to enter into the transaction, the person has some financial interest
or is related to someone with a financial interest.
- Spouses - Grandchildren - Siblings
- Ancestors - Great Grandchildren
- Children - Spouses of the foregoing
- Siblings - 35% controlled entity
(Control is defined as owning more than 35% of the voting power of a corporation, more than 35% of the profits interest in a partnership, or more than 35% of the beneficial interest in a trust).
Board of Directors Conflict of Interest Policy and Disclosure FormIn their capacity as directors, the members of the Board of Directors (the “Board”) of the ABC Charity (“ABC”) must act at all times in the best interests of ABC. The purpose of this policy is to help inform the Board about what constitutes a conflict of interest, assist the Board in identifying and disclosing actual and potential conflicts, and help ensure the avoidance of conflicts of interest where necessary. This policy may be enforced against individual Board members as described below.
I have read the ABC Board Conflict of Interest Policy set forth above and agree to comply fully with its terms and conditions at all times during my service as a ABC Board member. If at any time following the submission of this form I become aware of any actual or potential conflicts of interest, or if the information provided below becomes inaccurate or incomplete, I will promptly notify the ABC President & CEO in writing. Disclosure of Actual or Potential Conflicts of Interest:______________________________________________________________________________ ______________________________________________________________________________ Board Member Signature: ________________________________________________________ Board Member Printed Name: _____________________________________________________ Date: _________________________________________________________________________
Make the “required disclosure”of material facts of the conflict of interest/EBT.
Disinterested or “qualified”directors, committee members or ACF personnel should evaluate the transaction. (Do we have sufficient facts? Is there a conflict or EBT? If so, do not permit the transaction.)
"Required disclosure" means disclosure by the DQP who has a conflicting interest of both:
The existence and natureof the conflicting interest.
All facts known to the DQP
respecting the transaction that an ordinarily prudent person
to be material to a judgmentabout whether or not to proceed with the transaction.
“Qualified Director" means any director who does not have either:
A conflicting interest.
A familial, financial, professional or employment relationship with a second director who has a conflicting interest respecting the transaction,
which relationship would, in the circumstances,
“reasonably be expected to exert an influence on the first director's judgment when voting on the transaction.”
Decision should be made by the “qualified” directors –
without influence of the interested director.
Basis for the transaction should be adequately documented.
CONFLICT FOR DONNY? WHAT SHOULD HE DO? WHAT SHOULD GRANTS R US DO?
President – WGM Associates LLC
April 3, 2014
Who Requires You to Retain Records
Consolidating records into a single location
Facilitating legal holds
Consistentlyimplementing retention periods
Providing Business Continuity (BCDR)
Some General Examples
Some Records You May NotHave Considered
Challenges to Consistent Implementation
Sample Screen Shots
Search Web Part
Documents Web Part
Calendar Web Part
Contacts Web Part
Pictures Web Part
Forms Web Part
(Searches in Document and Metadata)