When the majority of us hear the words “conflict of interest” in relation to a not for profit board of directors, we generally think there is trouble ahead. That is certainly possible, but it is not necessarily so.
Let’s start with the law. Florida Statutes 617.0832 very clearly tells us how to handle a conflict of interest on a not for profit board. Since the law tells us how to handle a conflict of interest, we should feel pretty comfortable believing that having a conflict of interest is not always taboo.
When we invite individuals to join our boards, we do so because they bring something of value to the organization. Sometimes it is their wisdom, but often it is their connections to resources, including products, services and people. Should we avoid doing business with a board member who has our best interests at heart and will give us the best price and the best service?
It depends. It has to be handled properly. Consider the public perception. Think about the potential consequences if the product or service has troubles down the road. Then, follow all best practices (as stated in the law) regarding documentation of the conflict of interest, documentation of other bids, abstention of the conflicted party from any vote, and having a majority vote of the board. Taking all of the right steps will insure that the conflict of interest is handled properly and that the best interests of the organization are well served.