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As the question of a "direct or indirect interest" (i.e. 'conflict of interest') does seem to come up a lot on the forum, I have a question: Should an organization create rules regarding how to deal with conflicts of interest? And if so, what types of restrictions should there be?

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As the question of a "direct or indirect interest" (i.e. 'conflict of interest') does seem to come up a lot on the forum, I have a question: Should an organization create rules regarding how to deal with conflicts of interest? And if so, what types of restrictions should there be?

I think this is a very organization-specific question.

In some cases (governing bodies of educational institutions come to mind), conflicts of interest are rare and the body in question is mostly supervisory. Those decisions it does come to have almost always been considered at length by committees and/or administrators and are rarely first brought to the governing body. Moreover, they are almost all of high significance, since the power to make low-significance decisions has been delegated (as an example, the Board of Governors of my university has delegated the power to approve any contract less than $2 million). In such a case, it makes sense to require members to abstain from participating in the decision on a question in which they have pecuniary interest.

By contrast, in a small organization, it may be the case that the member with the pecuniary interest may have the best knowledge of a field among members, and the organization doesn't really have the resources to pursue more detailed information. In that case, it is probably better to follow the member's recommendation, since the total amount of effort that the assembly would put in to get a better consideration of the issue is likely not worth the improvement of the decision that might result.

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As the question of a "direct or indirect interest" (i.e. 'conflict of interest') does seem to come up a lot on the forum, I have a question: Should an organization create rules regarding how to deal with conflicts of interest? And if so, what types of restrictions should there be?

My guess is that the standard rules embodied in RONR will work just fine for most non-public, deliberative assemblies. Public bodies will sometimes be bound to additional statutory provisions.

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To me most organizations should have some sort of specific rule relating to the specific organization.

But I have always thought that a member with a direct interest should refrain from voting. My rationale is that while most members would likely follow RONR's suggestion about not voting, some will not. And I also favour the member not being present during debate - unless the member has very specific information on the issue that would be of benefit to the organization.

At the very least, I do believe that any member with a direct or indirect interest should be forced to disclose this interest prior to debate commencing and at every meeting when the issue is before the group. This is to make sure that the other members are aware that this member might just be bias.

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...At the very least, I do believe that any member with a direct or indirect interest should be forced to disclose this interest prior to debate commencing and at every meeting when the issue is before the group. This is to make sure that the other members are aware that this member might just be bias.

How is this to be implemented?

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I concur with Rob. I do not support the views expounded by RevEd, and, as far as I know, I do not have a direct or indirect interest in this topic. ;)

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As the question of a "direct or indirect interest" (i.e. 'conflict of interest') does seem to come up a lot on the forum, I have a question: Should an organization create rules regarding how to deal with conflicts of interest?

Probably not.

... what types of restrictions should there be?

The ones in RONR already.

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How is this to be implemented?

Something like this in the By-laws under qualifications:

"a) A director or officer who has, directly or indirectly, an interest in a contract or transaction to which the organization is a party or a proposed contract or transaction to which the organization will be a party, shall disclose the nature and extent of the interest to the Board at the meeting and the Minutes shall reflect the disclosure.

B) A director or officer who has a direct or indirect conflict will not vote on the specific issue.

c) Unless unanimous consent is provided, the director or officer shall not be present during debate of any issue for which he or she has a direct or indirect conflict.

d) If a director or officer fails to disclose a conflict, the Board, when it is made aware of the conflict, shall call a special meeting of the general membership to discuss and vote on the removal of the director or officer and the director or officer may be removed by a majority of votes cast."

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Something like this in the By-laws under qualifications:

"a) A director or officer who has, directly or indirectly, an interest in a contract or transaction to which the organization is a party or a proposed contract or transaction to which the organization will be a party, shall disclose the nature and extent of the interest to the Board at the meeting and the Minutes shall reflect the disclosure.

B) A director or officer who has a direct or indirect conflict will not vote on the specific issue.

c) Unless unanimous consent is provided, the director or officer shall not be present during debate of any issue for which he or she has a direct or indirect conflict.

d) If a director or officer fails to disclose a conflict, the Board, when it is made aware of the conflict, shall call a special meeting of the general membership to discuss and vote on the removal of the director or officer and the director or officer may be removed by a majority of votes cast."

Here's an example of a vote cast when the method used is a roll call vote:

SECRETARY: Mr. Elsman.

MR. ELSMAN: No.

SECRETARY: Mr. Elsman, no.

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This presumes that a "conflict" can be easily and objectively identified, like "having brown eyes". In fact, the existence and nature of a conflict are bound to be matters of opinion, more like "having an air of mystery".

In my view, the proposed rules will inevitably prove to be unworkable.

Edited by Gary Novosielski

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This presumes that a "conflict" can be easily and objectively identified, like "having brown eyes". In fact, the existence and nature of a conflict are bound to be matters of opinion, more like "having an air of mystery".

In my view, the proposed rules will inevitably prove be unworkable.

It also reduces the status of the member with such an interest, though completely innocent of any wrongdoing, to that which would characterize a member who has been convicted of a serious offense.

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As much fun as it is to posture in favour of the RONR default provision, many real-world societies, including almost all publicly-funded boards and tribunals at the municipal level, have rules similar to the one proposed by Rev Ed, and they manage to get along just fine.

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As much fun as it is to posture in favour of the RONR default provision, many real-world societies, including almost all publicly-funded boards and tribunals at the municipal level, have rules similar to the one proposed by Rev Ed, and they manage to get along just fine.

I concur - with the possible exception of point D - the removal. This may not be included or may be included.

My concern is that I have known people who have "used" the default position of RONR to effectively gain financially while members of a Board. My point is a member should be reminded to keep the appearance of not using a position for personal gain above the rights provided for from that position.

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Here's an example of a vote cast when the method used is a roll call vote:

SECRETARY: Mr. Elsman.

MR. ELSMAN: No.

SECRETARY: Mr. Elsman, no.

I can't figure out what this response has to do with this topic.

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I can't figure out what this response has to do with this topic.

It has nothing to do with it. I believe it belongs at the following location:

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