Just would like confirmation of what I think.

I have reviewed some documents regarding a proposal brought by the President of a non profit(honorary position) to use the organisation he heads to obtain a grant to set up a new organisation of which he would become the CEO (paid position). This new organisation would then contract marketing services for the non-profit and receive services from a third organisation of which he is currently a paid executive (2IC) seliing these services to the non profit.

As far as I'm aware this person has not formally declared his vested interest to the non profit board although they would be generally aware of it.

Board members has been expected to endorse the course of action without reviewing the proposal in detail under the threat that there is a time limit on acceptance

I see that this as a misuse of his relationship by seeking material gain while an officer of the non profit, this is precluded in the rules. It is also unclear specifically what would be done with the grant money which is about $500,000 as the non profit becomes the vehicle for receiving and disbursing it and the function of the new organisation is not its core business

















































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This smells. It is imperative that the full board be aware of the conflict of interest here. And it is illegal for a board member - especially an officer - to steer business from the non-profit to his own outside company.

It's unclear to me what your role is here - please elaborate. Are you reviewing this grant request on behalf of another non-profit (a foundation perhaps) that is being solicited for funds? If so, you could require that the non-profit soliciting these funds provide minutes of a board meeting where the board voted to support the grant request and acknowledges the apparent conflict of interest of having one of its own board members being paid to provide a service. Finally, the board should affirm that any dealings with outside for-profit companies by the non-profit or its subsidiary be done at arms-length (i.e. with a proper bid process).

This smells. It is imperative that the full board be aware of the conflict of interest here. And it is illegal for a board member - especially an officer - to steer business from the non-profit to his own outside company.

It's unclear to me what your role is here - please elaborate. Are you reviewing this grant request on behalf of another non-profit (a foundation perhaps) that is being solicited for funds? If so, you could require that the non-profit soliciting these funds provide minutes of a board meeting where the board voted to support the grant request and acknowledges the apparent conflict of interest of having one of its own board members being paid to provide a service. Finally, the board should affirm that any dealings with outside for-profit companies by the non-profit or its subsidiary be done at arms-length (i.e. with a proper bid process).

I am a former president and a member has made me aware of this

The board member should talk with the board chair (you say the President is an honorary position, so I assume there is a chair who is NOT the president, correct?), and let him/her know of the member's concern, and that it needs to be brought up at the next board meeting. But I wonder: if this is an honorary position is it non-voting? Some boards honor retired board members with designations such as "lifetime trustee" or "trustee emeritus" who are not voting members - is that what this person is?

As an aside, good governance practice for non-profits includes making sure the by-laws have specific rules about handling of conflicts of interest for board members. There should also be a standing Governance Committee whose role is to regularly review the board's bylaws and policies for ways to strengthen the organization. Really strong non-profits have written policies in this area, and require that the board review the policy annually.

The position is both Chairman and President as per the Constitution. The President has been confronted by the member who is not a Board member and has ducked for cover. There are not only policies with the organisation regarding declaration of interest, the state department administering associations also has strong rules which are being contravened but they won't act until the proposal is acted upon. The only way to resolve this is by calling a special meeting of members