Non-financial Conflicts of Interest

by Sarai Rice

arrows from Flickr via Wylio
© 2013 Dean Hochman, Flickr | CC-BY | via Wylio

At first glance, this is a topic only a governance geek could love. But before you dismiss what follows as inevitably boring, let’s consider this topic in the form of difficult situations your congregation may have already faced. For instance,

  • An interim who hopes to become permanent and so won’t do anything that might cause conflict.
  • A board member who tries to block a board or congregational vote on the full participation of the LGBTQ community because he deeply believes that this would be wrong.
  • A minister whose child hurts other children but who blocks all attempts by the board to do something about it

Governance may seem dry, but basic governance principles can actually help congregations address these kinds of situations more effectively.

For example, many of you have served on non-profit boards. If so, you will have learned that all board members, including ministers who are are voting members of their congregations’ boards, share common fiduciary duties—the duties of care, obedience, and loyalty. With thanks to Dan Hotchkiss’ Governance and Ministry for putting these in a church context,

  • The duty of care requires a board member to commit enough time, energy, and attention to the mission and affairs of a congregation that he or she is able to act responsibly in making decisions.
  • The duty of obedience requires board members to comply with all applicable laws and with a congregation’s foundational documents such as charters, bylaws, and denominational rules.
  • The duty of loyalty requires that a board member’s primary consideration be the congregation’s mission, not his or her own personal interests.

Most often this last duty, the duty of loyalty, is interpreted as referring to financial interests. That is, a member of a board needs to consider carefully the duty of loyalty if he or she might stand to benefit financially from a decision of a board. This kind of financial conflict of interest arises frequently in the life of congregations when boards are making decisions about vendors—businesses from whom to purchase insurance or printing or plumbing services. Congregations, and consequently their boards, often have members who are providers of such services, so board members have to keep in mind their primary obligation to the interests of the congregation, not their own bottom line, when their firm is being considered.

However, not all conflicts of interest are financial. If a conflict of interest can be understood as a set of conditions in which judgment concerning a primary interest can by unduly influenced by a secondary interest, then strongly-held beliefs, personal relationships, or desire for career advancement can all present conflicts of interest, albeit non-financial.

The medical research community has paid particular attention to non-financial conflicts of interest in recent years. Researchers have recognized, for example, that an individual who is asked to participate in writing guidelines for stem cell research may have a conflict of interest if his or her deeply held religious beliefs prohibit this kind of research. Similarly, someone asked to participate in the peer review of a research project may have a problem being objective if a mentor from his or her university days is one of the researchers, or someone conducting research in a new and exciting field may have a conflict of interest if particular findings would garner more media attention, and hence more job offers, than others.

If you think about these examples, you will see that such personal interests are not bad. Making a profit from a business, for example, is generally considered a good thing, as are important personal relationships, deeply-held beliefs, and the desire for career advancement. The problem is not that we have these kinds of interests, but that we are not always able to separate them from the interests of the organization we serve, whether as ministers or board members.

In the case of our three opening scenarios, for example,

  • The interim minister is not separating his deep desire for career advancement from the congregation’s need for him to deal with conflict-causing, sticky personnel issues.
  • The board member is not separating his deep belief about how God views LGBTQ individuals from the board or congregation’s need to reach a shared decision.
  • The minister with a difficult child is not separating her deep desire to protect her child from the congregation’s need to protect its other children as well.

One path to resolution in all these situations is, of course, good governance.

First, every congregation should have a conflict of interest policy signed by each board member annually that covers both financial and non-financial conflicts of interest. Ministers who are not board members as well as any others who act for the church should sign this policy as well.  Such a policy might say, for example, “No member of the board shall derive any personal profit or advantage, financial or non-financial, directly or indirectly, by reason of his or her participation with the organization. Each individual shall disclose any personal interest which he or she may have in any matter pending before the board and shall refrain from participation in any decision on such matter.”

Next, all board members should be expected to comply with the policy by disclosing any interests that are at stake within any setting and by not participating in any decisions for which they have conflicting interests. In most cases, this means refraining from participation in both discussions and votes. Non-participation in discussions is usually managed best if the person with conflicting interests leaves the room, especially if this person is an authority figure such as a minister.

Finally, a review process should be created so that, in difficult cases, a neutral external authority may assist in sorting out whether the existence of conflicting interests has already tainted or has the potential to taint a decision-making process. In some cases, boards may need assistance in dealing with a minister who is not able to perceive that the congregation’s primary interest – its mission—is in conflict with his or her personal interests, and that when this happens, he or she needs to leave the room.

[box]Sarai Rice consults with congregations on a variety of issues including planning, program development, and governance, and offers coaching for clergy and lay leaders. She has a passion for work across the lines of faith traditions, especially in areas involving community ministry and social justice, as well as a deep commitment to the notion that human institutions should work well for the people they serve.[/box]