COMMITTEE TO PROTECT OUR LENOX HILL NEIGHBORHOOD, INC. Conflict of Interest Policy
STATEMENT OF ETHICAL PRINCIPLES
Between any organization and its board members, officers and staff, there exists a fiduciary duty that carries with it a broad duty of loyalty. Board members, officers and staff have the responsibility to administer the affairs of the organization honestly and prudently and to exercise their best care, skill and judgment for the sole benefit of the organization. It is improper for these individuals to use their position in the organization, information they have about the organization, or property belonging to the organization so as to secure a pecuniary benefit for (a) themselves, (b) members of their family, or (c) any other organizations with which such individuals are affiliated.
The purpose of the conflict of interest policy statement is to protect the interests of Committee To Protect Our Lenox Hill Neighborhood, Inc. (the “Organization”) when it is has entered or is contemplating entering into a transaction, relationship or compensation arrangement that might benefit the private interests of a director, officer or employee, or might result in a possible excess benefit transaction, self-dealing or private inurement. This policy is intended to supplement, but not to replace, any state or federal laws governing conflicts of interest applicable to charitable organizations.
Section 1. “Interested Person”. Any director, officer or employee of the organization with a Conflict of Interest.
Section 2. “Conflict of Interest”. A director, officer or employee of the Organization has a Conflict of Interest if he or she has, directly or indirectly (such as through any entity or familial relationship), (a) an ownership or beneficial interest of greater than 5% in any entity with which the Organization has entered into or contemplates entering into a transaction or relationship, (b) a compensation arrangement (which includes any gifts or favors that are not insubstantial) with the Organization, or with any entity or individual with which or whom the Organization has entered into or contemplates entering into a transaction or relationship.
Section 1. An Interested Person must disclose to the Board of Directors, or an authorized committee of the Board, in good faith, the existence of the Conflict of Interest and all material facts and circumstances pertaining such interest.
Section 2. After the disclosure of the Conflict of Interest and all material facts and circumstances, the Board of Directors, or an authorized committee of the Board, other than the Interested Person, shall consider all reasonable alternatives and, after due diligence, the Board of Directors, or such committee (other than the Interested Person and outside the Interested Person’s presence), shall determine by no less than majority vote of the directors or committee members present at the meeting whether the transaction, relationship or compensation arrangement is nonetheless fair, reasonable and in the Organization’s best interests; provided, however, that such transaction, relationship or compensation arrangement does not otherwise give rise to an excess benefit transaction, self-dealing or private inurement that would jeopardize the Organization’s tax-exempt status or subject it to excise tax under Chapter 42 of the Internal Revenue Code of 1986, as amended.
Section 3. Violations of this conflict of interest policy shall be grounds for removal as a director or officer, or grounds for termination of the employee, as applicable.
Section 4. No Interested Person shall attend or participate in any meeting at which regarding his or her Conflict of Interest is deliberated or voted on, or shall improperly influence the deliberation or voting on the transaction, relationship or compensation arrangement giving rise to such Conflict of Interest.
The Board of Directors, or authorized committee of the Board, shall contemporaneously document in the minutes of its meeting deliberating the transaction, relationship or compensation arrangement giving rise to a Conflict of Interest, including the basis for the Board of Directors’ or such committee’s approval of the related transaction, relationship or compensation arrangement, and its consideration of the alternatives.
Section 1. Each director, officer and employee shall receive a copy of this conflict of interest policy statement and shall agree to abide by its terms as a condition of his or her appointment or employment.
Section 2. Prior to the initial election of a director, the nominated director, and annually thereafter, each director, shall submit to the Secretary of the organization a written
statement identifying, to the best of the director’s knowledge, any entity of which the director is an officer, director, trustee, member, owner or employee and with which the organization has a relationship, and any transaction or compensation arrangement which may give rise to a Conflict of Interest.
Section 3. The organization shall conduct a periodic review of all director, officer and employee compensation arrangements, as well as of any other transactions or relationships, for the purpose of determining that such transactions, relationships or compensation arrangements are consistent with the charitable purposes of the organization and do not result in private inurement or an excess benefit transaction.
Section 4. The organization may engage outside experts and advisers to conduct its periodic reviews, but that shall not relieve the Board of Directors of responsibility for seeing to it that such reviews are conducted.