The information and discussions in all board and committee meetings are for the exclusive use and benefit of the Certified Lease & Finance Professional (CLFP) Foundation. They are not to be shared with any outside individual or organization.
Conflict of Interest
Under the law, all volunteers of trade and professional foundations, such as members of foundation boards, committees, or other governing bodies, owe a duty of care and a duty of loyalty to their foundations. Even though they serve as unpaid volunteers, individuals who hold positions in these bodies can be held legally liable to the foundation – and the foundation can likewise be held legally liable to others – if these duties of care or loyalty are violated and damages result. Avoidance of conflicts of interest is also an obligation of foundation employees.
Volunteers and employees must always act reasonably and in the foundation’s best interest. They must avoid negligence and fraud in performing their activities on behalf of the foundation and avoid conflicts of interest between their duties to the foundation, their responsibilities to other organizations, and their personal interests.
Volunteers and employees owe the foundation their undivided allegiance. A conflict of interest exists when an individual participates in the deliberation and resolution of an issue important to the foundation while, at the same time, the individual has other professional, business, or volunteer responsibilities outside the foundation that could predispose or bias the individual to a particular view or goal.
There are three ways to avoid legal liability for volunteers and employees, as well as the foundation arising from conflicts of interest. For serious and actual conflicts, the individual must voluntarily withdraw from the foundation position or be withdrawn involuntarily if necessary. For less serious conflicts, there must be disclosure to the foundation and avoidance of participating in debate and voting on the issue for which there is a conflict (known as recusal). Finally, there must be full disclosure to the foundation for only minor or potential conflicts.
Only judgment and experience can determine which kind of conflict exists and, therefore, which resolution of the conflict is appropriate. Ultimately, the foundation’s prerogative, not that of the individual, determines disputes.
Conflicts will be judged in any legal challenge by disinterested outsiders, so it is prudent to err on the conservative side and avoid even the appearance of conflicts of interest.
Each year, volunteer members of foundation/association boards and committees, other foundation governing bodies, and foundation employees should disclose any situations or areas of actual or potential conflicts of interest to the foundation.
