Conflict of Interest & Transparency

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Through the Looking GlassThe post on Conflict of Interest earlier this week has led to some of the most interesting discussion about organizational leadership issues I’ve seen in a while. To all who participated, thank you! (And to all who missed it, read through the comments here.)

Of the many issues that arose in that discussion, some have led to new thinking and new questions. Here are a few of the salient points raised in those comments:

  1. First, it is important to note that conflicts of interest are not illegal. Conflicts must be disclosed, and interested parties must recuse themselves from decisions about which they have a conflict. But it is not illegal for board members to have conflicts of interest.
  2. Conflict of Interest discussions are rooted in distrust. Yes, they’re rooted in the law, but face it – the law is rooted in distrust.
  3. If Creating the Future is a place for exploring structures that will create the most impact in communities, AND if we know that The Pollyanna Principles are the key to creating that impact, AND if distrust goes directly counter to those principles – then we must find approaches that are aligned with both the law and our core values, which are rooted in those principles!
  4. To accomplish Creating the Future’s mission, the board must be a place for diversity of thought, brilliant exploration, and honest reflection about the assumptions that guide both the organization’s work and the sector’s work overall.

There is one other thing that stands out boldly in this discussion, that I don’t recall ever hearing in similar discussions over my years as a governance consultant. And that is the question of whether conflicts arising from passionate involvement in the mission might actually be a good thing.

Yes, such conflicts must be disclosed – that’s a given. But it is fascinating the extent to which we take for granted that conflict of interest = bad.

And it is even more fascinating, when those assumptions are laid bare, that it opens the door to even considering the notion that a board might intentionally seek out as leaders those people who care enough about the mission to have such involvement!

The Next Question
As Dimitri and I discussed all this yesterday (ironically on our way to my giving a talk about open, transparent engagement), Dimitri wondered aloud whether the “perception” part of the discussion goes away if decisions are made transparently and openly, as we have been doing.

He pointed out that conflicts of interest are dangerous when decisions are private, because that is when there is opportunity for all the things we might distrust to happen. When decisions are made with just the board and the ED present – the way most board meetings happen – and when minutes reflect only cursory discussion and a final decision, that is a recipe for trouble, conflict of interest or not!

But if all decisions are made out in the open for all to see, as we have been doing here…

Might the bogeyman “perception” aspect of Conflict of Interest become a moot point?

If such transparency of decision-making is built into the bylaws and the culture of the organization, how much of the “perception” aspect of the Conflict of Interest issue might simply disappear?

Photo Credit: Self Portrait Through the Looking Glass by Dimitri

2 thoughts on “Conflict of Interest & Transparency”

  1. Well, yes and.

    I have found that good decisions at a Board table:

    – are predicated on clear awareness of and attention to organizational values
    – are underpinned by independence of thought and action by Board members
    – happen when people really take time to listen deeply to each other, seeking to go “beyond rightdoing and wrongdoing”, as Rumi wrote about 800 years ago

    And good decisions demonstrate awareness of power, how it plays itself out in organizations & at Board tables and what needs to be done to mitigate against it.

    Wrapped up in power are all manner of virtues and sins. In any organization, relationships between all the various players can result in people “flexing their muscle” in all sorts of ways – economic, intellectual, social, race, class … there’s a whole host of ways. Some intended and some unintentional. Any of these can breed conflicts of interest, even when an organization believes it is operating transparently.

    I have witnessed situations where, for example, staff attend Board meetings on a regular basis as an organizational attempt to demonstrate transparency, accountability and collegiality. When the criteria I listed above are ignored, the presence of staff can be oppressive to a Boards’ legal duty for independent thought and action. I’m sure there are a host of other examples, which you and other contributors could name with your eyes closed.

    The key point is this: Conscious efforts at equalizing power are another part of the work of ensuring that conflicts of interest are addressed by a Board. Using the question, “in what ways is this approach encouraging the diversity of thought needed to make the best decision?” can be of help.

    Lastly, it has been my experience that assuring “convergence of interest” (kudos Carlo!) is ongoing work. It doesn’t disappear on its own, as is proposed. New Board members come along, new issues/programs/ relationships with stakeholders come up – and we attend to the organization and its best interest over and over and over and over again.

    My good friend and mentor Jassy has always maintained that in community building, there is no magic. There is good heart, good will and a whole lot of sweat.

    And that’s a good thing!

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  2. Yes, that level of transparency would certainly help, especially with those who’ve seen it consistently throughout this organization’s history

    I still consider passion the key attribute for board members. Skills can be taught. And skills brought to a board will only be used over time if there is passion. You need people inspired by the vision and ready to make a difference in their own communities.

    I’ve seen organizations manage conflicts or perceived conflicts without losing those most passionate and/or skilled by making sure the board doesn’t make certain kinds of decisions. Choice of faculty, and faculty compensation, for example, could be the role of a separate group, appointed by the Board for set terms and with final authority. And if there will be a broad membership base, the bylaws could specify certain types of decisions as requiring member approval.

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