New Year, New Start: Revisiting Your Conflict-of-Interest Policy and Annual Board Disclosure Forms
The start of a new year is the perfect opportunity for your organization's board of directors to review its conflict-of-interest policy to ensure that the policy is comprehensive, effective, and up-to-date.
Although it is not required, the IRS considers having a conflict-of-interest policy a good governance practice that ensures the organization is complying with the rule against officers, directors and key employees improperly benefiting financially from the organization's activities. Therefore, the Board should periodically review the policy. This is also a good time for the organization's directors, officers and key employees to complete annual disclosure forms to highlight any new business or personal relationships that may give rise to a conflict of interest.
Form 990 also requires that every nonprofit describe how it regularly and consistently monitors and enforces compliance with the policy and whether officers, directors and key employees are required to disclose annually interests that could give rise to a conflict. Reviewing the policy and completing the disclosure forms now will help ensure that your organization has a good story to tell when it comes time to complete the Form 990.
Please check these resources for more information on conflict-of-interest policies, as well as a sample policy and disclosure form:
