Conflict of Interest Policy Draft

Article I — Purpose

The purpose of this Conflict of Interest Policy is to protect the interests of Access100 (the “Organization”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Organization or might result in a possible excess benefit transaction. This Policy is intended to supplement, but not replace, any applicable state and federal laws governing conflicts of interest applicable to nonprofit and charitable organizations. This Policy is also intended to identify situations that present potential conflicts of interest so that the Board of Directors (the “Board”) can establish procedures for addressing them.

Article II — Definitions

Section 2.1 — Interested Person

Any director, principal officer, or member of a committee with governing board-delegated powers who has a direct or indirect financial interest, as defined below, is an interested person.

Section 2.2 — Financial Interest

A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:

• An ownership or investment interest in any entity with which the Organization has a transaction or arrangement;
• A compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement; or
• A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement.

Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial. A financial interest is not necessarily a conflict of interest. Under Section 3.2, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.

Section 2.3 — Founder

“Founder” means any individual who participated in organizing Access100 and who is recognized as such in the Organization’s records. A Founder who serves as a director, officer, or employee occupies a position of heightened trust and is therefore subject to enhanced disclosure obligations under this Policy with respect to any transaction or arrangement that could benefit the Founder personally or financially.

Section 2.4 — Related-Party Employment

“Related-Party Employment” means any employment relationship, consulting arrangement, independent-contractor engagement, or other compensated service relationship between the Organization and (a) a Founder, (b) a current director or officer, or (c) a person who is a family member or household member of a Founder, director, or officer. Related-Party Employment requires advance disclosure and Board approval as set forth in Article III of this Policy.

Article III — Procedures

Section 3.1 — Duty to Disclose

In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board-delegated powers considering the proposed transaction or arrangement.

Section 3.2 — Determining Whether a Conflict of Interest Exists

After disclosure of the financial interest and all material facts, and after any discussion with the interested person, the interested person shall leave the governing 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.

Section 3.3 — Procedures for Addressing the Conflict of Interest

An interested person may make a presentation at the governing board or committee meeting, but after the presentation, the interested person shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.

1. The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
2. After exercising due diligence, the governing board or committee shall determine whether the Organization can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
3. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Organization’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination it shall make its decision as to whether to enter into the transaction or arrangement.
4. The interested person may not participate in the final deliberation or vote regarding the transaction or arrangement involving the possible conflict of interest. However, the interested person shall be available to answer questions from the governing board or committee regarding the transaction or arrangement.

Section 3.4 — Violations of the Conflict of Interest Policy

If the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.

1. If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
2. Disciplinary and corrective action may include, but is not limited to, removal from a committee or from the Board of Directors, and in the case of an employee, up to and including termination of employment.

Section 3.5 — Founder-to-Employee Transitions and Related-Party Employment

The following procedures apply whenever a Founder, a director, an officer, or a family or household member of any of the foregoing seeks or accepts compensated employment or a compensated service arrangement with the Organization.

1. Advance Written Disclosure. The individual must provide a written disclosure to the full Board at least thirty (30) days before any offer of employment is extended or any compensated arrangement is entered into. The disclosure must describe the nature of the proposed role, the proposed compensation, and the individual’s relationship to the Organization.
2. Recusal. Any Founder, director, or officer who is the subject of the proposed employment or who has a family or household relationship with the proposed employee must recuse themselves from all deliberation and voting on the matter.
3. Independent Review. The remaining disinterested directors shall determine whether the proposed compensation is reasonable and comparable to what similarly qualified individuals would receive in arm’s-length transactions, using reliable comparability data wherever available.
4. Supermajority Approval. Approval of Related-Party Employment requires an affirmative vote of two-thirds (2/3) of disinterested directors present at a duly constituted meeting at which a quorum of disinterested directors exists.
5. Written Record. The Board shall document in the meeting minutes: the nature of the relationship, the comparability data reviewed, the names of directors who recused themselves, and the outcome of the vote.
6. Annual Reaffirmation. Any ongoing Related-Party Employment arrangement must be reviewed and reaffirmed by the Board annually as part of the Organization’s annual conflict of interest review process.
7. No Retroactive Approval. Compensated arrangements entered into without following the procedures in this Section are voidable at the discretion of the disinterested directors and may subject the Organization and the interested parties to regulatory scrutiny.
8. Founder Transition Period. During the first three (3) years of the Organization’s existence, any transition of a Founder from an unpaid to a paid role requires notification to the Organization’s legal counsel and, where applicable, disclosure to relevant grant-making entities.

Article IV — Records of Proceedings

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

• The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing board’s or committee’s decision as to whether a conflict of interest in fact existed.
• 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

A voting member of the governing board who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.

1. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.
2. No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
3. Whenever the Organization contemplates paying compensation or entering into any other financial arrangement with any officer or director, the Board shall follow the procedures set forth in Section 3.3 of this Policy to determine that such compensation or arrangement is just and reasonable.
4. Whenever the Organization contemplates a compensated arrangement with a Founder or with any individual who is a family or household member of a Founder, director, or officer, the Organization must additionally follow the procedures set forth in Section 3.5 of this Policy, including the supermajority approval requirement and documentation requirements, regardless of whether the arrangement is characterized as employment, consulting, or any other form of compensated service.

Article VI — Annual Statements

Each director, principal officer, and member of a committee with governing board-delegated powers shall annually sign a statement which affirms that such person:

• Has received a copy of this Conflict of Interest Policy;
• Has read and understands the Policy;
• Has agreed to comply with the Policy; and
• Understands that Access100 is a charitable organization 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 the Organization operates in a manner consistent with its 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:

• Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm’s-length bargaining; and
• Whether partnerships, joint ventures, and arrangements with management organizations, if any, conform to the Organization’s written policies, are properly 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 Organization may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring that periodic reviews are conducted.