How Can You Avoid Conflict-Of-Interest Allegations Upon Appointment To A Board Position?
If you've recently accepted an appointment to a board of directors, you may be excited about the prospect of using your influence to lead a company, planning board, or other organization in a positive direction. However, these types of positions can often carry with them some ethical guidelines in addition to more general advice to "be honest" or "negotiate in good faith." What should you know about financial and personal entanglements that could cause you problems going forward? Read on to learn more about some of the most common conflicts of interest so that you can begin structuring your own activities to avoid these types of serious and potentially damaging allegations.
Financial Conflicts of Interest
On the financial front, you'll be generally discouraged from using your position on the board of directors (BOD) to enrich yourself or your family financially--for example, exerting your influence as a BOD member to secure opera tickets, upgrade your airline seats, or bid for a lucrative contract for your non-BOD-related business. Doing so could be seen as an abuse of power not befitting someone in a public position.
You'll also want to avoid having any existing financial entanglements interfere with your BOD work. For example, if your BOD is investigating the purchase of a piece of property in an adjoining county, pushing for this acquisition without disclosing that this property is owned by your spouse's employer could lead to a damning newspaper headline. You'll similarly be prohibited from soliciting BOD approval or funding for your own business venture.
Personal Conflicts of Interest
Conflicts of interest can also exist outside the financial world, involving the promotion of personal relationships above one's BOD responsibilities. This could include attempts to interfere in a BOD-related investigation of a family member (for example, serving on the BOD of a college where your child or family member attends), using your BOD influence to get your child his or her first job, or using your BOD membership to settle the score with an old enemy.
In general, the best rule of thumb if you suspect you may have a conflict of interest is to disclose quickly. In many cases, a conflict of interest may be deemed minor enough to allow you to continue voting on or otherwise handling the conflicted matter; however, failing to disclose this information to your fellow board members until the media or others get wind of a conflict could lead to allegations of a cover up or collusion.
Whether the College of Dupage Board of Trustees elect a new member or you're looking at some other board, these tips will help you.