Common use of Managing Conflicts of Interest Clause in Contracts

Managing Conflicts of Interest. Acknowledgement and open discussion of conflicts of interest is important because people have complex lives, play many roles in their work and society, and have a stake in other organizations or corporations — some of which may intersect with the interests of the Co-op. Sorting through those intersections can seem complicated, but at the heart of a conflict of interest is a simple concept: if there is any action before the Board or Management that could personally benefit you directly or indirectly, you just need to acknowledge it for discussion and management before decisions are made. Director conflicts of interest are now easier to manage than they used to be. There was a time when co-op boards were actively involved in operational decisions, such as awarding contracts or determining the product mix on the shelves. Just the fact that Directors had their own personal desires as co-op shoppers needed to be acknowledged and understood, much less any personal connections to the co-op’s business partners. Now, with Policy Governance, the Board focuses on larger issues, the General Manager makes all operational decisions, and most conflicts of interest for Directors can be mitigated or prevented by good management practices. Regardless, conflicts of interest still merit special attention. Let’s consider a couple examples: ● Conflict: You own or work for a company that does snow plowing in the winter, and Co-op management has contracted with that company for some time now. You would have acknowledged that fact in your candidate materials, but after you are elected it should be discussed if that conflict of interest requires some attention, now that it is real. ● Conflict: You are already on the Board and have decided to grow local produce; you are planning to participate in local farmers markets and want to include the Co-op in your retail network. Before you proceed, you should request a Board discussion as to how to understand and manage this potential new conflict of interest.