In the course of business, situations may arise in which a DMS member has a conflict of interest, or in which the process of making a decision may create a potential, real or an appearance of a conflict of interest. Conflicts of interest create a special risk to nonprofits as the organization may lose its tax exempt status for any real or apparent conflicts of interests.
All directors, employees, members, and volunteers have an obligation to:
All members owe a duty of loyalty to DMS. This duty necessitates that in serving the nonprofit, they act solely in the interests of DMS, not in their personal interests or in the interests of others.
The persons covered under this policy shall hereinafter be referred to as “interested persons.” Interested persons include all members (individually, and as members of committees and the Board of Directors), volunteers, employees, as well as persons with the following relationships to directors or employees:
Conflicts of interest arise when the interests of an interested party may be seen as competing with those of DMS. Conflicts of interest may be financial (where an interested party benefits financially directly or indirectly) or nonfinancial (e.g. seeking preferential treatment, using confidential information).
Examples of conflicts of interest include, but are not limited to, situations in which a member, volunteer, or employee:
A member, volunteer, or employee who believes that he/she may be perceived as having a conflict of interest in a discussion or decision must disclose that conflict to the finance committee. Most concerns about conflicts of interest may be resolved and appropriately addressed through prompt and complete disclosure.
Therefore, DMS requires the following:
In the event a potential conflict of interest is discovered concerning the Board or Officers of the corporation, all uninterested board members will come together in a meeting and will decide whether a conflict of interest exists and determine the appropriate response and actions to take based on the specific facts and circumstances. The response and actions to be taken must be approved by a majority of a quorum of uninterested board members. However, there must be at least three (3) uninterested board members to form a quorum to render this decision. Where no quorum can be formed as stated here, a conflict of interest is automatically presumed requiring an immediate end to the agreement between Dallas Makerspace and the disclosing person (e.g. resigning from the board, ending contractual arrangements, or relinquishing a management or supervisory position). Minutes will reflect any potential, real, or apparent conflict of interest. All individuals who have potential interests must recuse themselves from discussions or influencing decisions. Actual or apparent conflicts of interest not involving the Board or Officers of the corporation will be reviewed and resolved by the treasurer, who will inform the Board as soon as is practicable of the actions taken and the Board shall have the opportunity to review.
Failure to comply with the standards contained in this policy will result in disciplinary action that may include membership termination, referral for criminal prosecution, and reimbursement to the DMS or to the government, for any loss or damage resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any individual charged with a violation of this policy will be afforded an opportunity to explain her/his actions before disciplinary action is taken.
A board member, officer or committee member who violates this policy will be removed from oversight responsibility.