A religious, non-profit school wants to conduct a market research project. A board member has the expertise, and offers a price to do the work. The board and staff are concerned about appearance of conflict-of-interest and decide that before the board can okay him/her to do the project, staff must get two bids from other suppliers. Given that the intent behind this exercise is to justify having the board member do the work, and not a competitive bidding process; that the suppliers will be wasting a lot of their time; shouldn't this be a concern? I happen to be aware of this as a result of being a consultant on the wider project of which this research project would be a part, and am wrestling with what, if anything, to say. Comments?

The board member has a conflict of interest, therefore will not be independent. To avoid even the appearance of a conflict of interest the staff should hire someone outside of the church to be totally independent and will receive a totally unbiased opinion.

Also a board member oversees the company or school and should not be hired to work for the school.

I see no reason to allow the board member to do the research project. His or her job is to review the resarch project when it is completed to render an opinion.

Think of it this way; should a board member be writing checks on behalf of the school, cleaning the school, or teaching at the school. No they are not employees of the school. The board is responsible for the big picture or the overall direction that the school is heading, not the day to day operations of the school.

For profit and not for profit companies do this all the time, whether getting bids or advertising internally and externally for staff. Governments do it with employee hiring. Is it ethical in any case? Unethical in any case? Less ethical for a religious institution?
I don't like it, and think the ethical thing to do would be to pay 2 other companies to appraise the job instead.
But it's so common that objecting will probably get nowhere.
Unless there's some fine print in the rules of the board about this conflict of interest, which there very well might be, that would not allow them to pay the board member for this. The attorney/law firm for the place might be a place to inquire. But is there some reason you don't feel that you can bring this out in the open?

This is a definite conflict of interest. No board member should ever be paid to provide a service to the organization. The board member should either (a) resign from the board and competitively bid for the work, or (b) donate his time and expertise for free, or (c) just bow out of the project.

**Edit - I like Pready's suggestion that the board member provide feedback and guidance to assist management in evaluating the proposals that come in from the other bidders. But again - the board member must not be awarded the work for pay.

Thanks for your thoughts. As to whether there is a reason I cannot bring it into the open: Well, others in my position would worry that their contract would be terminated! but I'm in a position where whether I'm paid not doesn't matter... always a stronger place to come from when challenging an organizational practice! I'm not so distressed by the idea of the board member doing the work, pready, because so often they are willing to offer "a break" on price... it isn't ideal, but I can live with that. The part that bothers me is that in asking other companies to reply to an RFP, they are participating in a rigged game, and the school is asking them to invest at least a couple thousand dollars in professionals' time to do so. The reason I hesitate, Joypulv, is as you say, it is so common. On the other hand, geez, this is a religious school that claims to be teaching kids values. I am thinking about the idea their being more transparent with some companies, to pursue an "appraisal" as you put it.

I volunteer with a n-f-p. Our policy is to put the project out for bids. If someone on the Board or in another capacity has the BEST bid (not necessarily the lowest - you need the expertise and manpower to back up your claim you can do the work) they get the work.

We back up all decisions with a paper trail. The argument is whether it's better to spend more and avoid the appearance of a conflict of interest or spend less and get a break (hopefully) from someone who has a connection to the Board.

I wouldn't give out any work to anyone without getting bids - n/f/p or not.

Now a question is, do you have an obligation to ethical behavior?
You can protest to the board, to the organization, to the press (since this sounds like a big org), even let this info leak to suppliers, or contact them directly.
I would guess that you want the board to act ethically on their own.
It can be argued that many suppliers know what goes on anyway, and of course they expect to lose a certain number of bids anyway. They could possibly even sue for their bid costs if they find out that this violates board rules.
Then as stated there's the argument that getting a good price from a board member is good for the organization.
I would first try to get a copy of the board rules.
If you aren't hurting other contractors I would go then go before the board, but if not that, then send an anonymous note to the other bidders.
Not exactly taking a direct stand for what is right, but it could bring about a change nevertheless.