Conflict of Interest — Boy's and Girl's Club Syracuse

Conflict of Interest Policy

Article I – Purpose

The purpose of this Conflict of Interest Policy (this “Policy”) is to ensure that the activities of the Boys & Girls Club of Syracuse (the “Club”), a tax-exempt organization, are free from the possible influence of conflicts of interest. This Policy applies to Directors, Officers, and Senior Staff Members of the Club. This Policy provides a procedure for dealing with conflicts of interest situations and applies whenever the Club is contemplating entering into a transaction or arrangement that might benefit the private interest of a Director, Officer, or Senior Staff Member. This Policy is intended to supplement, but not replace, any applicable state and federal laws governing conflicts of interest applicable to not-for-profit, educational, and charitable organizations in New York State.

Article II – Definitions

1. Affiliate

An Affiliate is any entity controlled by, in control of, or under common control with the Club.

2. Board

The Club’s Board of Directors shall be the “Board” under this Policy

3. Covered Personnel

The Directors, Officers, and Senior Staff Members shall be “Covered Personnel” under this Policy.

4. Conflict of Interest

A Conflict of Interest may exist whenever an individual owes a duty to more than one (1) person or organization, or when an individual’s personal interests or concerns are potentially inconsistent with, or divergent from, the interests of the Club.

5. Family

Family of a person includes his or her spouse or domestic partner (as defined in New York Public Health Law Section 2994-a), ancestors, siblings (including half- and step-siblings, children (natural, adopted, and step-children), grandchildren, great-grandchildren, and spouses or domestic partners of such siblings, children, grandchildren, and great-grandchildren.

Article III – Procedures

1. Duty to Disclose

In connection with any actual or possible Conflict of Interest or any potential Related Party Transaction, an Interested Person must disclose the existence of the Financial Interest, or other personal interest, that may give rise to a Conflict of Interest, and be given the opportunity to disclose all material facts to the Directors and members of committees with Board delegated powers considering the proposed transaction or arrangement. The disclosure shall be made to the Board.

2. Determining Whether a Conflict of Interest Exists

After disclosure of the Financial Interest or other personal interest and all material facts, and after any discussion with the Interested Person, he/she shall leave the Board or committee meeting while the determination of a Conflict of Interest is discussed and voted upon. The remaining Board or committee members shall decide if a Conflict of Interest exists.

3. Procedures for Addressing the Conflict of Interest

a. An Interested Person may make a presentation regarding the arrangement or transaction involving the possible Conflict of Interest at the Board or committee meeting, but after the presentation, the Interested Person shall leave the meeting during the discussion of, and the vote on, any such transaction or arrangement.

b. An Interested Person is prohibited from attempting to improperly influence any Board or committee deliberation or voting related to the transaction or arrangement involving the possible Conflict of Interest.

c. After exercising due diligence, the Board or committee shall determine by a majority vote of the disinterested members thereof whether a Conflict of Interest exists and whether the transaction or arrangement involving a possible Conflict of Interest is in the Club’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination of the Board or committee it shall make its decision as to whether to enter into the transaction or arrangement; provided that if the transaction or arrangement involving a possible Conflict of Interest constitutes a Related Party Transaction, then it must be approved in accordance with the procedures set forth in the Section of this Policy entitled “Related Party Transactions”.

4. Related Party Transactions

a. Any Covered Personnel with any interest in a Related Party Transaction shall make a good faith disclosure of all material facts related to such interest to the Board. The Board shall review all the material facts related to the proposed Related Party Transaction and request any additional information that it deems necessary to complete such review.

b. The Board shall first review the Proposed Related Party Transaction to determine whether the Related Party’s Financial Interest in the transaction or arrangement is substantial (which shall be determined in accordance with any guidance issued by the Office of the New York State Attorney General). If the Board determines that the Related Party’s Financial Interest in the proposed Related Party Transaction is not substantial, then it may approve the proposed Related Party Transaction if it determines that the transaction is fair, reasonable, and in the best interests of the Club. If the Board determines that the Related Party’s Financial Interest in the proposed Related Party Transaction is substantial, then it shall undertake the review set forth in Article III Section 4.c. of this Policy.

c. For any proposed Related Party Transaction in which a Related Party’s Financial Interest is substantial, the Board shall consider alternative transactions to the proposed Related Party Transaction to the extent that any alternative transactions are available. Following its review of the proposed Related Party Transaction and any available alternative transactions, if a majority of disinterested members of the Board determines that the proposed Related Party Transaction is fair, reasonable, and in the best interests of the Club, then it may authorize the proposed Related Party Transaction. The Board shall document, in the minutes of the meeting at which such determination is made, the basis for its determination that the proposed Related Party Transaction is fair, reasonable, and in the best interests of the Club and any alternative transactions that were considered when making this determination. The Club shall not enter into a Related Party Transaction unless it is approved in accordance with this Policy

d. At the time of any deliberation or decision by the Board concerning the authorization of a proposed Related Party Transaction, the Interested Person shall not be present at the meeting, and such Interested Person shall not attempt to improperly influence any deliberations or voting regarding the Related Party Transaction; provided that the Board may request the Interested Person to provide information regarding the Related Party Transaction prior to the commencement of deliberations or voting thereon. Any Related Party Transaction that is approved without complying with the procedure set forth in this Section 4.d shall be void.

5. Avoidance of the Appearance of Conflict of Interest

Because the Club relies upon Directors who are actively engaged in the community, it is not unusual for its Directors to be on the volunteer governing boards of not for profit organizations with which the Club may undertake transactions. In such cases, the Director must disclose the relationship, and may present any relevant information, but must leave the room for discussion and voting upon that particular transaction.

6. Violations of the Conflicts of Interest Policy

a. If the Board or a committee has reasonable cause to believe that a member has failed to disclose actual or possible Conflicts of Interest, then it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.

b. If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the Board or committee determines that the member has failed to disclose an actual or possible Conflict of Interest, then it shall take appropriate disciplinary and corrective action.

Article IV – Records of Proceedings

The minutes of the Board and all committees with Board-delegated powers shall contain:

a. The names of the persons who disclosed or otherwise were found to have a Financial Interest or other personal interest in connection with an actual or possible Conflict of Interest; the nature of the Financial Interest or personal interest, any action taken to determine whether a Conflict of Interest was present; and the Board’s or committee’s decision as to whether a Conflict of Interest in fact existed; and

b. The names of the persons who were present for discussions and votes relating to the transaction or arrangement; the content of the discussion, including any alternatives to the proposed transaction or arrangement; and a record of any votes taken in connection with the proceedings.

Article V – Compensation

With respect to any member of the Board or any committee who receives compensation, directly or indirectly, from the Club for services (a) such person shall not participate in any deliberations or voting related to such person’s compensation; and (b) notwithstanding the foregoing, such person shall not be prohibited from participating in any Board or committee activities regarding the compensation of other individuals.

Article VI – Annual Statements

Prior to his or her initial election to the Board of Directors, and annually thereafter during such person’s term, each Director shall sign a statement: (1) whereby such person identifies, to the best of such person’s knowledge, any entity of which such person is an officer, director, trustee, member, owner, or employee and with which the Club has a relationship, and any transaction in which the Club is a participant and in which the person might have a conflicting interest; and (2) which affirms that such person:

a. Has received a copy of the Conflicts of Interest Policy,

b. Has read and understands the Policy,

c. Has agreed to comply with the Policy, and

d. Understands that the Club is charitable and that in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.

Article VII – Periodic Reviews

To ensure that the Club operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:

a. Whether compensation arrangements and benefits are reasonable, based upon competent survey information, and the result of arm’s-length bargaining.

b. Whether partnerships, joint ventures, and arrangements with management organizations conform to the Club’s written policies, are property recorded; reflect reasonable investment or payments for goods and services; further charitable purposes; and do not result in inurement, impermissible private benefit, or in an excess benefit transaction.

Article VIII – Use of Outside Experts

When conducting the periodic reviews as provided for in Article VII, the Club may, but need not, use outside advisors or experts. If outside advisors or experts are used, their use shall not relieve the Board of its responsibility for ensuring that periodic reviews are conducted.

(Reviewed and Approved October 23, 2014)
(Reviewed and Updated June 23, 2016)

The Club reserves the right to interpret, apply, update, amend, modify,
and/or replace this policy at any time in its discretion.