Corporate Records
Conflict of Interest
Adopted August 17, 2013
LIVING SYSTEMS INSTITUTE CONFLICT OF INTEREST POLICY
Article I: Purpose
This conflict of interest policy is designed to foster public confidence in the integrity of Living Systems Institute (the “Organization”) and to protect the Organization’s interest when it is contemplating entering a transaction (defined below) that might benefit the private interest of a director, a corporate officer, the top management or top financial official, or a key employee (defined below).
Article II: Definitions
The following are considered insiders for the purposes of this policy:
Each member of the Board of Directors.
The executive director and any other staff members employed by the Organization.
Interest means any commitment, investment, relationship, obligation, or involvement, financial or otherwise, direct or indirect, that may influence a person’s judgment, including receipt of compensation from the Organization, a sale, or exchange transaction with the Organization. Interest includes an interest held by a close family member of the insider, including a spouse, child or parent, or an interest held by an organization in which the insider is an officer or director or a holder of a financial interest.
A conflict of interest is present when, in the judgment of the Board of Directors, an insider’s stake in the transaction is such that it reduces the likelihood that an insider’s influence can be exercised impartially in the best interests of the Organization.
Transaction means any transaction, agreement, or arrangement between an insider and the Organization, or between the Organization and any third party where an insider has an interest in the transaction or any party to it.
Article III: Procedures
1. Duty to Disclose
Each board member and staff member shall disclose to the Board all material facts regarding his or her interest in the transaction, an interest of a close family member, or an interest of an organization in which they or a close family member have a significant financial interest promptly upon learning of the proposed transaction, for any such interest known to them.
2. Prohibited Transactions
No loan shall be made to any director or officer of the corporation.
3. Determining Whether a Conflict of Interest Exists
With regard to an insider, the Board shall determine if a conflict of interest exists. The insider(s) and any other interested person(s) involved with the transaction shall not be present during the Board’s discussion or determination of whether a conflict of interest exists, except as provided in Article IV below.
4. Procedures for Addressing a Conflict of Interest
The Board shall follow the procedures set forth in Article IV in order to decide what measures are needed to protect the Organization’s interests in light of the nature and seriousness of the conflict, to decide whether to enter into the transaction and, if so, to ensure that the terms of the transaction are appropriate.
Article IV: Review by the Board
The Board may ask questions of and receive presentation(s) from the insider(s) and any other interested person(s), but shall deliberate and vote on the transaction in their absence. The Board shall ascertain that all material facts regarding the transaction and the insider’s conflict of interest have been disclosed to the Board and shall compile appropriate data, such as comparability studies, to determine fair market value for the transaction.
Article V: Records of Proceedings
The minutes of any meeting of the Board pursuant to this policy shall contain the name of each insider who disclosed or was otherwise determined to have an interest in a transaction; the nature of the interest and whether it was determined to constitute a conflict of interest; any alternative transactions considered; the members of the Board who were present during the deliberations on the transaction, those who voted on it, and to what extent interested persons were excluded from the deliberations; any comparability data or other information obtained and relied upon by the Board and how the information was obtained; and the result of the vote, including, if applicable, the terms of the transaction that was approved and the date it was approved.
Article VI: Annual Disclosure and Compliance Statements
Each director, each corporate officer, the top management official, the top financial official, and each employee of the Organization, shall annually sign a statement on the form attached, that:
affirms that the person has received a copy of this conflict of interest policy, has read and understood the policy, and has agreed to comply with the policy; and
discloses the person’s financial interests and family relationships that could give rise to conflicts of interest.
Article VII: Violations
If the Board has reasonable cause to believe that an insider of the Organization has failed to disclose actual or possible conflicts of interest, including those arising from a transaction with a related interested person, it shall inform such insider of the basis for this belief and afford the insider an opportunity to explain the alleged failure to disclose. If, after hearing the insider’s response and making further investigation as warranted by the circumstances, the Board determines that the insider has failed to disclose an actual or possible conflict of interest, the Board shall take appropriate disciplinary and corrective action.
Article VIII: Annual Reviews
To ensure that the Organization operates in a manner consistent with its status as an organization exempt from federal income tax, the Board shall authorize and oversee an annual review of the administration of this conflict of interest policy. The review may be written or oral. The review shall consider the level of compliance with the policy, the continuing suitability of the policy, and whether the policy should be modified and improved.
LIVING SYSTEMS INSTITUTE CONFLICT OF INTEREST POLICY: ACKNOWLEDGMENT AND FINANCIAL INTEREST DISCLOSURE STATEMENT
Living Systems Institute (the “Organization”) follows a conflict of interest policy designed to foster public confidence in our integrity and to protect our interest when we are contemplating entering a transaction or arrangement that might benefit the private interest of a director, a corporate officer, our top management official and top financial official, or any of our key employees.
Part I. Acknowledgment of Receipt
I hereby acknowledge that I have received a copy of the conflict of interest policy of Living Systems Institute, have read and understood it, and agree to comply with its terms.
__________________________ _______________________
Signature Date
__________________________
Printed Name
Part II. Disclosure of Financial Interests
We are required annually to file Form 990 with the Internal Revenue Service, and the form we file is available to the public. To complete Form 990 fully and accurately, we need each officer, director and key employee to disclose the information requested in this Part II.
Part II Please check ONE of the following boxes:
My interests and relationships have not changed since my last disclosure of interests.
[Proceed to signature block below. Do not complete the tables.]
OR
I hereby disclose or update my interests and relationships that could give rise to a conflict of interest: [Complete the table below. Use additional pages as needed.]
Family Relationships
Names of those presenting a potential conflict of interest:
Include spouse/domestic partner, living ancestors, brothers and sisters (whether whole or half blood), children (whether natural or adopted), grandchildren, great grand-children, and spouses/ domestic partners of brothers, sisters, children, grandchildren, and great grandchildren
Type of interest
Description of interest that could lead to a conflict of interest:
Transactions or arrangements with the Organization
Transactions or affiliations with other nonprofit organizations
Substantial business or investment holdings
Transactions or affiliations with businesses not listed above