Understanding conflict of interest disclosures
What is a conflict of interest disclosure?
A conflict of interest disclosure is an annual statement through which a Board member or key person of an organization discloses any business interests they have with the organization or other members of the Board that may conflict with business decisions made by the Board. Conflicts of interests are not necessarily illegal, but conflicted Board members are expected to abstain from deliberation and voting on matters affected by their conflicts of interest.
When are disclosure forms collected?
ArtsPool Member Liaisons collect conflict of interest (COI) disclosure forms from a member's Board members and “key persons” annually at the beginning of the audit, accountant’s review, or tax filing process. This usually takes place in the two to three months following the close of the member’s fiscal year
Who has to complete a disclosure form?
All Board members who served on the Board during the fiscal year in question must complete a disclosure form. This includes people who joined the Board and those who left the Board during the year.
As of 2017, it is also mandatory to collect disclosures from key persons in New York State. NY State defines a key person as:
"someone who is not an officer or director and who, whether or not employed by the corporation, has responsibilities or powers similar to those of officers and directors, manages the corporation of a substantial part of its activities, assets or finances, or has a role in controlling a substantial part of its capital expenditures or budget."
If you are not sure whether anyone other than the Executive Director should be considered a key person, consult the auditor for guidance.
More information: New York Charities Bureau Guidance on Conflict of Interest Policies