GLOSSARY
"conflict of interests"
Mayor, 2006 - Present
City of LEXINGTON, IL As Mayor of Lexington John has a Duty of Loyalty to Public Interests. . PUBLIC INTERESTS . . . |
JOHN MOHR
. . . versus . . .
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Board Member, 2010 - 2013
ECONOMIC DEVELOPMENT COUNCIL As a former Board Member of the EDC John has a Duty of Loyalty to Private Interests. . . . . PRIVATE INTERESTS |
CONFLICT OF INTERESTS
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As taken from the 2008 IEDC HANDBOOK:
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IEDC Board Member Conflict of Interest Policy
An IEDC Board member pledges a personal and professional allegiance to the IEDC and acknowledges that the best interests of the organization and its members must prevail over any individual interest of his/her own or those of any other party. This requires each director to pay particular attention to how this duty overlaps with a similar duty owed to their business, employer or another association. In service to the IEDC, the director in particular is a designee of all the members.
A conflict may exist when an individual participates in the deliberation or resolution of an issue important to the IEDC, while at the same time having other responsibilities that could predispose the individual. Conflicts should always be disclosed and may require ‘recusal’ – stepping back from participation in a matter – or even withdrawal from a post.
Most conflicts can be managed short of withdrawal. However, it is important and legally necessary that all conflicts be managed in a prudent and conservative fashion. Each director will be required to complete a disclosure form when they accept a position with IEDC, and annually thereafter.
An IEDC Board member pledges a personal and professional allegiance to the IEDC and acknowledges that the best interests of the organization and its members must prevail over any individual interest of his/her own or those of any other party. This requires each director to pay particular attention to how this duty overlaps with a similar duty owed to their business, employer or another association. In service to the IEDC, the director in particular is a designee of all the members.
A conflict may exist when an individual participates in the deliberation or resolution of an issue important to the IEDC, while at the same time having other responsibilities that could predispose the individual. Conflicts should always be disclosed and may require ‘recusal’ – stepping back from participation in a matter – or even withdrawal from a post.
Most conflicts can be managed short of withdrawal. However, it is important and legally necessary that all conflicts be managed in a prudent and conservative fashion. Each director will be required to complete a disclosure form when they accept a position with IEDC, and annually thereafter.
IEDC also expects each volunteer to:
• abide by the terms of this policy and the disclosure form;
• inform the President & CEO or an IEDC officer if a potential conflict arises during the course of IEDC business, whether or not the conflict was previously
disclosed;
• Accept the judgment of IEDC with respect to how best to manage any conflict or appearance of a conflict situation.
• IEDC also requires that its employees report to the President & CEO any conflict, potential conflict, or appearance of conflict that comes to their attention
regarding a Board member. The President & CEO will use his/her discretion in discussing this information with the affected Board member and the IEDC
Governance Committee.
• IEDC exists for its members, and cannot exist without the dedicated involvement of its volunteers. IEDC will work to resolve recognized conflicts in the least intrusive way consistent with sound risk management, tempered by judgment and experience. It recognizes that situations will arise in which a Board member may have potentially conflicting loyalties but can readily resolve those conflicts to perform his or her job fairly and effectively. For true, serious conflicts, the individual will be asked to withdraw voluntarily from the volunteer’s position with the IEDC – or be involuntarily withdrawn. For true but less serious conflicts, disclosure and recusal from debate and/or decision making (such as voting) will typically be sufficient. With minor or potential conflicts, the act of disclosure alone is typically sufficient.
Apparent Authority and Board Member Activity
It is commonly understood that when someone has received a delegation of authority on behalf of an organization, whether as an officer or an agent, that person has in fact been authorized to act with binding effect. Any act taken by the individual within the scope of this authority is considered to be the act of the organization for purposes of creating binding legal obligations (e.g., a contract) or imposing legal liability (e.g., for tortious conduct).
It is less commonly understood that an individual connected with an organization can create equally binding obligations or liability for harmful conduct – even if the individual has no actual authority – if the individual appears to outsiders to have such authority. This concept is known as apparent authority. It is a particular source of risk for associations and their directors because they operate in an arena where lines of authority (or, if you prefer, the chain of command) may be unclear and because association volunteers – by definition – are beholden to an employer or job separate from their duties for the association.
To help minimize the risk to IEDC and its members from liability for acts taken with apparent authority, we follow some basic precautions. These include ensuring that all volunteers receive our conflict of interest policy, and making sure that checks and balances are in place to minimize the potential that one or a few individuals can act, write or speak in the name of IEDC without prior review and approval. As officers and directors, your understanding of, and cooperation with, these policies and practices is important. Please see the “Conflict of Interest Disclosure Form in Appendix 4.
• abide by the terms of this policy and the disclosure form;
• inform the President & CEO or an IEDC officer if a potential conflict arises during the course of IEDC business, whether or not the conflict was previously
disclosed;
• Accept the judgment of IEDC with respect to how best to manage any conflict or appearance of a conflict situation.
• IEDC also requires that its employees report to the President & CEO any conflict, potential conflict, or appearance of conflict that comes to their attention
regarding a Board member. The President & CEO will use his/her discretion in discussing this information with the affected Board member and the IEDC
Governance Committee.
• IEDC exists for its members, and cannot exist without the dedicated involvement of its volunteers. IEDC will work to resolve recognized conflicts in the least intrusive way consistent with sound risk management, tempered by judgment and experience. It recognizes that situations will arise in which a Board member may have potentially conflicting loyalties but can readily resolve those conflicts to perform his or her job fairly and effectively. For true, serious conflicts, the individual will be asked to withdraw voluntarily from the volunteer’s position with the IEDC – or be involuntarily withdrawn. For true but less serious conflicts, disclosure and recusal from debate and/or decision making (such as voting) will typically be sufficient. With minor or potential conflicts, the act of disclosure alone is typically sufficient.
Apparent Authority and Board Member Activity
It is commonly understood that when someone has received a delegation of authority on behalf of an organization, whether as an officer or an agent, that person has in fact been authorized to act with binding effect. Any act taken by the individual within the scope of this authority is considered to be the act of the organization for purposes of creating binding legal obligations (e.g., a contract) or imposing legal liability (e.g., for tortious conduct).
It is less commonly understood that an individual connected with an organization can create equally binding obligations or liability for harmful conduct – even if the individual has no actual authority – if the individual appears to outsiders to have such authority. This concept is known as apparent authority. It is a particular source of risk for associations and their directors because they operate in an arena where lines of authority (or, if you prefer, the chain of command) may be unclear and because association volunteers – by definition – are beholden to an employer or job separate from their duties for the association.
To help minimize the risk to IEDC and its members from liability for acts taken with apparent authority, we follow some basic precautions. These include ensuring that all volunteers receive our conflict of interest policy, and making sure that checks and balances are in place to minimize the potential that one or a few individuals can act, write or speak in the name of IEDC without prior review and approval. As officers and directors, your understanding of, and cooperation with, these policies and practices is important. Please see the “Conflict of Interest Disclosure Form in Appendix 4.