Conflict of Interest Statement
WESTMONT COLLEGE CONFLICT OF INTEREST STATEMENT
I. Reason for Statement
Westmont College is a non-profit corporation, whose continued existence depends on charitable contributions from the public and other support from the government. Maintenance of the tax exempt status of the College is essential both for its continued financial stability and for the receipt of contributions and support. For these and other reasons, the operations of the College are in the nature of a public trust, subject to scrutiny by the government, tax authorities, and members of the public.
As between the trustees, officers, management employees, and the corporation, there exists a fiduciary duty which carries with it a broad and unbending duty of loyalty. The trustees, officers, and management employees have the responsibility of administering the affairs of the corporation honestly and economically and of exercising their best care, skill, and judgment for the sole benefit of the corporation. Those persons shall exercise the utmost good faith in all transactions involved in their duties, and they shall not use their positions or knowledge gained therefrom for their personal benefit. The interests of the College must have the first priority, and all purchases of goods and services must be effected on a basis securing for them full competitive advantages as to product, service, and price.
In their dealings with the College, all trustees, officers, and management employees must be ever mindful of potential conflicts of interest. Before entering into transactions presenting such problems, they shall be expected to disclose to the Board the interest which may produce the conflict. The Board shall determine whether the contemplated transaction so disclosed is just, fair, and reasonable as to the College, and, after so determining affirmatively, the trustees may authorize the transaction in the best interests of the College.
Distribution of this statement does not imply a lack of confidence in the recipients. Rather, the statement is to serve as a reminder of the high fiduciary standards which must guide all those related to the operations of the College and of their duty to reveal any conflict problems in advance.
II. Persons Concerned
This statement is directed not only to trustees, and officers, but to all employees who can influence the actions of or commit the College or Board; all, for example who make purchasing decisions, all other persons who might be described as “management personnel,” and to all who have confidential information concerning the College.
III. Areas in Which Conflicts May Arise
Conflicts of interest may arise in the relations of trustees, officers, and management employees with:
A. Persons and firms supplying goods and services to the College.
B. Persons and firms from whom the College leases property and equipment.
C. Persons and firms with whom the College is dealing or planning to deal in connection with the gift, purchase or sale of real estate, securities, or other property.
D. Other colleges and educational facilities.
E. Donors and others giving support to the College.
G. Third party payors of student assistance.
H. Agencies, organizations, and associations which affect the operations of the College.
IV. Nature of Conflicting Interest
In a trustee’s, officer’s, or management employee’s relations with the persons and firms mentioned in Section III, a material conflicting interest may be defined as an interest, direct or indirect, which might affect, or might reasonably be thought by others to affect his/her judgment or conduct as a trustee, officer, or management employee. Such an interest might arise through:
A. Owning of stock or other proprietary interests.
B. Holding debt or debt securities.
C. Holding office, serving on the Board, participating in management, or being otherwise employed (or formerly employed).
D. Receiving remuneration for services with respect to individual transactions.
E. Receiving of personal gifts or unsecured loans. (Receipt of any gift is disapproved except gifts of nominal value which could not be refused without discourtesy. No personal gift of money should ever be accepted).
F. Obtaining an interest in real estate, securities or other property which the College is considering buying or leasing.
G. Expending time during normal business hours for personal affairs or for the organizations, civic or otherwise, to the detriment of work performance.
V. Indirect Interests
As noted above, conflicting interests may be indirect. A trustee, officer, or management employee will be considered to have an indirect interest in a firm or transaction if any of the following have an interest:
A. The trustee’s, officer’s, or management employee’s family (defined for these purposes as all persons related by blood or marriage).
B. An estate or trust of which the trustee, officer, or management employee or member of his/her family is a beneficiary, personal representative, or trustee.
C. A company of which a member of the family of the trustee, officer, or management employee is an officer, director, or employee, or in which he/she has a stock interest or other proprietary interest.
VI. How Statement of Policy Should Be Interpreted
The areas of conflicting interest listed in Section III, and the relations in those areas which may give rise to conflict, as listed in Section IV, are not offered as an exhaustive exposition. Conceivably, conflicts might arise in other areas or through other relations. It is assumed that the trustees, officers, and management employees will recognize such areas and relations by analogy.
The fact that one of the interests described in Section IV exists does not mean necessarily that a conflict exists, or that the conflict, if it exists, is material enough to be of practical importance. However, it is the policy of the Board that the existence of any one or more of the interests described in Section IV shall be disclosed before any transaction is consummated. It shall be the continuing responsibility of trustees, officers, and management employees to scrutinize their transactions for potential conflicts and to make such disclosures.
Disclosure shall be made to the President or Chair of the Board, who shall bring these matters to the attention of the Board through their Executive Committee. The Board shall then determine whether a conflict exists or, in the presence of an existing conflict, whether the contemplated transaction may be authorized as just, fair, and reasonable as to the College. The decisions of the Board on these matters will rest in their sole discretion, and their first concern must be the welfare of the College.