Governing Board Conflict of Interest and Recusal Policy

The following are the Conflict of Interest and Recusal Policy for the Digital Square Governing Board.

Purpose

Conflicts of interest of varying degrees of significance or nature—may arise in the conduct of Digital Square’s operations. A conflict of interest in and of itself is not wrong and may not be unethical, but those involved in decision-making processes on behalf of Digital Square must take appropriate action to ensure disclosure of any actual, perceived, or potential conflicts of interest. As a result, Digital Square will be able to properly manage conflicts of interest and thus mitigate the operational and reputational risks inherent in such conflicts.

The purpose of this Conflict of Interest and Recusal Policy (this “Policy”) is therefore to protect the integrity and reputation of Digital Square’s decision-making processes, particularly in regard to the allocation and disbursement of resources, by establishing procedures to identify, evaluate, and address any actual, perceived, or potential conflicts that may arise. As a basic principle, such conflicts must be resolved in favor of Digital Square. Those involved in decision-making processes on behalf of Digital Square will be expected to abide by the provisions of this Policy.

Definitions

Board Member(s)

Any member of the Board.

Family member(s)

A Board Member’s grandparents, parents/guardians, spouse/domestic partner, siblings, children/dependents, and/or grandchildren.

Conflict of interest

A situation where a Board Member has an actual, perceived, or potential organizational or financial/personal interest, as defined below, that may:

• Affect the conduct of his/her duties and responsibilities with respect to Digital Square.
• Create the perception that the Board Member is using his/her position in Digital Square for organizational or personal financial gain at the expense of Digital Square.

Organizational interest

An organizational interest arises when a Board Member is an officer, director, trustee, partner, or (negotiating to become) an employee of an entity that may benefit financially from a decision on which he/she would vote.

Financial/personal interest

A Board Member has a financial/personal interest when he/she or any family member may benefit financially or in any other significant way from a transaction or other financial arrangement between the initiative and an entity with which the Board Member has:

• An ownership or investment interest.
• A senior leadership or board member position (whether paid or unpaid).
• A direct or indirect compensation arrangement, including through a business, investment, or family member, or in the form of substantial gifts or favors.
• A potential in securing any of the above.

Conflict of interest established

Board Members will not use their position of influence to secure any financial gain for themselves, their family members, or the organizations with which they are affiliated. There are several possibilities for determining whether an actual, perceived, or potential conflict exists:

• A Board Member discloses that he/she has an actual, perceived, or potential conflict.
• The Chair determines an actual, perceived, or potential conflict exists.
• The Board determines an actual, perceived, or potential conflict exists.

Categories of interest

Interests can generally be categorized according to the following types:

• Direct: A direct interest in any Board decision, policy, or contract may be established when a Board Member directly benefits from such decision, policy, or contract through an organizational or personal/financial interest.
• Indirect: An indirect interest in any Board decision, policy, or contract may be established when a Board Member indirectly benefits from such decision, policy, or contract through an organizational or financial/personal interest.

Duty to disclose

1

A Board Member must disclose organizational and/or financial/personal interests and the nature of such interest when he/she becomes aware that a conflict exists, could be perceived to exist, or is likely to occur. Such risks should be disclosed in writing to the Chair and Director upon joining the Board (for preexisting conflicts), within one week of the Board Member being notified of the conflict of interest or before the next Board meeting, whichever comes first.

Recusal

1

Though Board Members bring their experience and affiliations to bear for the benefit of Digital Square, they should also recognize their fiduciary responsibility to put the interests of Digital Square before other interests when taking decisions on behalf of Digital Square. Concurrently, when discharging their duties, Board Members who represent organizations are not required to make decisions that conflict with the constitution, regulations, rules, and policies of the organization providing that Member to the Board. Therefore, participation in and disclosure of any actual, perceived, or potential conflict of interest relevant to a Board decision should be guided by the provisions of this Policy, with any such conflict identified and declared.

2

During the course of a Board meeting, a Board Member with an actual, perceived, or potential conflict of interest shall disclose the conflict to the Chair as soon as possible upon learning of the possible conflict of interest and in no event later than at the beginning of discussion of the pertinent agenda item.

3

It shall be the decision of the Chair, in consultation with the Director, to determine the scope and level of a conflicted Board Member’s participation in the discussion and the necessity of recusal from deliberation, motions, and voting given the type of interest disclosed. The minutes of the meeting shall reflect the conflicted Member’s disclosure and whether the conflicted Member participated in the discussion and/or abstained from voting.

Failure to disclose

1

Should any Board Member have reasonable cause to believe that another Board Member has failed to disclose an actual, perceived, or potential conflict of interest, he/she shall inform the Chair and the Director. The Board Member shall have an opportunity to explain the alleged failure to disclose. The reporting Board Member should have reasonable grounds for suspecting a violation and must do so in good faith. Knowingly reporting false or frivolous information is contrary to this Policy.

2

Failure to disclose or disputes over whether a conflict exists may be referred to the Board for resolution. Failure to disclose a personal interest by a Board Member who represents an organization shall be addressed in consultation with the organization providing that Member.

Contact

Lesley-Anne Long Director, Digital Square, PATH llong@path.org