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Conflict of Interest


Guest Sam S.

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The President of a 501©3, appoints himself as the insurance agent of the organization. He refuses to ask house counsel if this is, or appears to be, a conflict.

The only person who can appoint the insurance broker, according to the bylaws, is the President. He claims he receives no remuneration and waives his fees for his services. This decision is then ratified by the Board of Directors.

When he is asked by a member to check with house counsel, he refuses. The President states that the Board of Directors agree with him, that there is no conflict. And if the member tries to go directly to the house counsel (whom he appoints also), the member is threatened with possible charges up to and including expulsion from the club.

There is nothing in the bylaws prohibiting a member from asking a question from house counsel.

Does there appear to be a potential conflict here?

Sam S.

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The only way that RONR addresses a "conflict" is that a member who has an interest not in common with the other members shouldn't vote on the question involving the interest but can't be prevented from voting. Whether what you describe constitutes a conflict is for you all to determine. If you all think that there is a conflict or that the President is throwing his weight around too much you all could amend the bylaws to address the situation. Other options would be to not re-elect the President or remove him from office and then the new President can appoint someone else.

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The President of a 501©3, appoints himself as the insurance agent of the organization. He refuses to ask house counsel if this is, or appears to be, a conflict.

The only person who can appoint the insurance broker, according to the bylaws, is the President. He claims he receives no remuneration and waives his fees for his services. This decision is then ratified by the Board of Directors.

When he is asked by a member to check with house counsel, he refuses. The President states that the Board of Directors agree with him, that there is no conflict. And if the member tries to go directly to the house counsel (whom he appoints also), the member is threatened with possible charges up to and including expulsion from the club.

There is nothing in the bylaws prohibiting a member from asking a question from house counsel.

Does there appear to be a potential conflict here?

Sam S.

It seems to me that the threats to the member asking the questions are the obvious misdeed in this story, and this may be something the general membership wants to take up with the president (independent of the president-as-insurance-agent issue).

As for the possible 'conflict of interest', RONR has relatively little to say on the topic (as Chris H. described in his post).

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I have received the following response from the President of my club, as to my inquiry from club counsel as to whether or not there exists a conflict of interest, as to having the President appoint himself as insurance agent for the club:

"You are asked to appear in front of the ... board this Friday at 6:30 pm. Your comments will be dealt with then. Confirm that you can attend.

If you are unable to attend another meeting will not be scheduled and the March 2012 ruling from the board will stand."

There appears no reason to attend because of having stated my position in writing, and having copied all of the board members. To deal with my comments then, appears to be a threat, and is not dealing with the question at hand; does house counsel agree or not with me?

My next question is to what agency should I send my query to if the house counsel is unable or refuses to respong???

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I have received the following response from the President of my club, as to my inquiry from club counsel as to whether or not there exists a conflict of interest, as to having the President appoint himself as insurance agent for the club:

"You are asked to appear in front of the ... board this Friday at 6:30 pm. Your comments will be dealt with then. Confirm that you can attend.

If you are unable to attend another meeting will not be scheduled and the March 2012 ruling from the board will stand."

There appears no reason to attend because of having stated my position in writing, and having copied all of the board members. To deal with my comments then, appears to be a threat, and is not dealing with the question at hand; does house counsel agree or not with me?

My next question is to what agency should I send my query to if the house counsel is unable or refuses to respong???

As Mr Novosielski noted, this is not a question about parliamentary procedure, so RONR will not have an answer.

I'm curious -- is this Friday's meeting a regularly scheduled board meeting, or is it a special meeting? How often does the general membership of this organization meet? You have said you are a 'member' -- are you a member of the board or a member of the organization? The answers to these questions may help us figure out if there are any nits to pick from a parliamentary procedure p.o.v.

Also, what type of organization is this ? (certainly none of the small groups I belong to have a 'house counsel') -- the answer to that question may help you figure out what 'agency' you may need to turn to next, or what other legal route to take.

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Does there appear to be a potential conflict here?

RONR does not use the term "conflict of interest." It does say that a member who has a personal or pecuniary issue not in common with other members should not vote (but may not be compelled to abstain). This does not appear to be directly applicable to your situation.

Since your Bylaws have a conflict of interest policy, this may be a question of interpreting your Bylaws (see RONR, 11th ed., pgs. 588-591 for some Principles of Interpretation). It may also be a legal issue, in which case you should consult a lawyer (perhaps the house counsel, if that is what is sounds like). In either event, the question is beyond the scope of RONR and this forum.

And if the member tries to go directly to the house counsel (whom he appoints also), the member is threatened with possible charges up to and including expulsion from the club.

Do these threats have any teeth behind them? What do your Bylaws say about expulsion? By default, the power to expel a member rests with the general membership.

There appears no reason to attend because of having stated my position in writing, and having copied all of the board members. To deal with my comments then, appears to be a threat, and is not dealing with the question at hand; does house counsel agree or not with me?

Well, you know them better than I do. I think you would have a better chance of analyzing their statements and determining whether it is a threat or a legitimate request for you to state your case to the board in person. In any event, this appears to be a question of psychology, not of parliamentary procedure.

My next question is to what agency should I send my query to if the house counsel is unable or refuses to respong???

I haven't the slightest idea. There is scant mention of "agencies" or outside organizations of any nature in RONR, so I suspect this question is of a legal nature rather than a parliamentary one.

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