Policy #5

 

Conflict of Interest Policy

(Adopted by the Council 7/20/12)

 

This Conflict of Interest Policy (the “Policy”) governs the activities of the Minnesota State Bar Association (“MSBA”), pursuant to Section 9.5 of the MSBA Bylaws. Questions about the Policy should be directed to the MSBA Executive Director. It is the duty of all board members, officers, and other employees to be aware of this Policy; to identify conflicts of interest and situations that may result in the appearance of a conflict; and to disclose those (1) situations, (2) conflicts, (3) potential conflicts, and (4) appearance of conflicts (collectively, “Conflict” or “Conflicts”) to the MSBA Secretary or to the MSBA Executive Director, as appropriate. This Policy provides guidelines for identifying, disclosing, and managing Conflicts. Attorneys are reminded that, beyond this Policy, attorneys are bound by ethical rules that this Policy does not attempt to modify.

 

1.  Persons Affected. This Policy shall apply to members of the MSBA Council, MSBA officers, and MSBA employees (collectively, “Interested Persons”). In some cases, a major donor could also be presented with a potential Conflict, making that donor an Interested Person. The MSBA takes a broad view of Conflicts, and all Interested Persons are urged to think of how a situation or transaction would appear to outside parties.

 

2.  Definition of Conflict. A Conflict arises when, in the scope of an Interested Person’s duties, the Interested Person (1) has a personal interest that conflicts with the interests of the MSBA or (2) has divided loyalties (also known as a “duality of interest”). A Conflict can result in situations that result in inappropriate financial gain to persons in authority at the MSBA, which can lead to financial penalties and violations of IRS regulations. Similarly, situations or transactions arising out of a Conflict can result in either inappropriate financial gain or the appearance of a lack of integrity in the MSBA’s decision-making process. Both results are damaging to the MSBA and are to be avoided.

 

Example #1: A Conflict or potential Conflict arises where an Interested Person may be affected by a transaction between the Organization and the Interested Person. Similarly, a Conflict or potential Conflict also arises where an MSBA transaction may financially benefit an Interested Person’s family members, businesses, or other persons or businesses of persons with whom the Interested Person is closely associated.

 

Example #2: A Conflict or potential Conflict could be a direct or indirect financial interest such as those described above, or it could involve another personal interest. An example of such a Conflict or potential Conflict is a situation where the Interested Person is also a board member of another nonprofit or for-profit entity with which the MSBA collaborates or conducts business.

 

3.  Disclosure of Conflicts. Interested Persons shall annually disclose Conflicts and potential Conflicts by completing and submitting an Annual Conflict Disclosure Questionnaire to the MSBA Executive Director or the Executive Director’s designee. Interested Persons shall disclose all interests that could give rise to a Conflict, including but not limited to the following information: all relevant family members, all relevant substantial business holdings or investment holdings; all relevant businesses or nonprofit organizations; all relevant businesses or nonprofit organizations related to family members; and all relevant transactions or affiliations with those entities. Further, Interested Persons shall also promptly provide the Executive Director with updates to their prior disclosures.

 

Interested Persons are urged to disclose Conflicts as they arise, and they shall also disclose evolving situations that may result in a Conflict or potential Conflict. Interested Persons shall make that disclosure immediately after that person becomes aware of the existence of a Conflict, potential Conflict, or appearance of a Conflict. Advance disclosure should occur so that the Conflict may be managed. If an Interested Person is unable to provide advance disclosure, or if the Conflict or potential Conflict is only discovered in the course of MSBA proceedings, then the Interested Person shall promptly disclose the Conflict or potential Conflict to the Chair of the relevant MSBA division (e.g., section, committee, subcommittee, etc.).

 

4.  Management of Conflicts. For each Conflict disclosed through the Annual Conflict Disclosure Questionnaire, the MSBA Executive Director shall notify the MSBA Secretary. After that notification, the MSBA Secretary — or if the Conflict involves the MSBA Secretary, the MSBA Executive Director — will immediately take action by bringing the matter before the MSBA Council. For each Conflict disclosed in the course of MSBA proceedings, as provided in Section 3, the nature of the Conflict or potential conflict — and its disposition — shall be noted in the minutes of those proceedings.

 

The MSBA Council — or in the case of conflicts disclosed during MSBA proceedings, the Chair of those proceedings — shall, as soon as practicable, determine whether the organization will:

i)       take no action;

ii)      disclose the situation to the MSBA  Council, which will discuss and resolve the issue; or

iii)    refrain from taking action and otherwise avoid the Conflict.

 

In most cases, the action should include broadest disclosure possible, so decision-makers can make informed decisions that are in the MSBA’s best interests.

When an Interested Party is a decision-maker, (i) that Interested Party must fully disclose the Conflict to all other decision-makers; and (ii) that Interested Party may not be involved in the decision of what action to take (e.g., may not participate in a vote) but may serve as a resource to provide other decision-makers with needed information.

 

In some cases, the Interested Party may be asked to be absent from discussions regarding the Conflict, to prevent any undue influence.

 

In all cases, decisions involving Conflicts will be made only by disinterested persons.

 

Documentation of the management and outcome of all Conflicts shall be reflected in the minutes of the applicable MSBA division (e.g., section, committee, subcommittee, Council, or Assembly).

 

The MSBA Executive Director shall monitor the MSBA’s proposed or ongoing transactions (e.g., contracts with vendors and collaborations with third parties) for Conflicts. The Executive Director shall notify the Council of all such Conflicts or potential Conflicts, whether they are discovered before or after the transaction has occurred.

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