Conflict of Interest Policy
The purpose of this Conflict of Interest Policy (this "Policy") is to (1) protect the interests of Hope College (the "College") when it is contemplating entering into a transaction or arrangement that might benefit the private interest of a College Officer or other key College employee; and (2) provide a procedure for dealing with Conflict of Interest situations. This Policy is intended to supplement, but not replace, state and federal laws governing conflicts of interest applicable to not-for-profit, educational and charitable organizations in the State of Michigan. This Policy applies to all Officers of the College and such other key College employees as may be identified from time to time by the President of the College (the "President") (collectively, "Covered Persons").
"Affiliate" means an entity controlled by, in control of, or under common control
with the College.
"Board" means the College’s Board of Trustees.
"Compensation" means direct or indirect remuneration, as well as gifts or favors that are valued in excess of $100.
"Conflict of Interest" means any situation, circumstance or state of affairs relating to a Covered Person which: (1) involves personal interests or Financial Interests of the individual that may be inconsistent with, or divergent from, the interests of the College; or (2) could ultimately harm or benefit financially: (a) the individual; (b) any member of his or her Immediate Family; or (c) any entity in which any individual described in clause (a) or (b) of this definition has a five percent or greater ownership or beneficial interest, with respect to which any such individual serves as a director or officer, or over whose activities or decisions any such individual has the ability to exercise control. Without limiting the foregoing, any interest in a Related Party Transaction shall constitute a Conflict of Interest.
"Financial Interest" means any instance in which a Covered Person has, directly, or indirectly, through business, investment or Immediate Family: (1) an actual or potential ownership or beneficial interest in any entity with which the College has, or may reasonably be expected to have, a transaction or arrangement; or (2) an actual or potential Compensation arrangement with any entity or individual with which the College has, or may reasonably be expected to have, a transaction or arrangement.
"Immediate Family" Immediate Family includes an individual’s spouse, ancestors, brothers and sisters (whether whole or half-blood), children (whether natural or adopted), grandchildren, great grandchildren and spouses of brothers, sisters, children, grandchildren, and great-grandchildren.
"Related Party" A Related Party includes: (1) any Covered Person; (2) Immediate Family of any Covered Person; or (3) any entity in which any individual described in clause (1) or (2) of this definition has a direct or indirect ownership interest in excess of five percent (5%).
"Related Party Transaction" A Related Party Transaction includes any transaction, agreement or any other arrangement in which a Related Party has a Financial Interest and in which the College or an Affiliate is a participant.
"Administrative Council" means the President's executive team as he or she may determine from time to time.
Disclosure of Conflicts of Interest
Written disclosure of all potential Conflicts of Interest is required by all Covered Persons prior to commencement of employment and annually thereafter. The "Annual Statements" procedure, below, governs the annual update of potential Conflicts of Interest. However, Conflicts of Interest may arise between annual updates and, accordingly, a Covered Person shall disclose a potential Conflict of Interest: (a) prior to discharging his or her duties with respect to any matter involving the potential Conflict of Interest which comes before the Covered Person in the course of his or her employment; (b) prior to entering into any contract, transaction or relationship involving the College; and (c) as soon as possible after the Covered Person shall learn of a Conflict of Interest in any other context. Disclosure of the material facts surrounding the Covered Person’s Conflict of Interest shall be made to the President who shall report the conflict to the Administrative Council. The Covered Person shall thereafter refrain from participating in deliberations and decisions relating to the matter, though he or she may be asked for information about the Conflict of Interest. An interested Covered Person shall follow the direction of the President as to how decisions and actions that are the subject of the Conflict of Interest will be assessed and determined; provided that if the interested Covered Person is the President, then the President shall follow the direction of the Board as to how the decisions and actions that are the subject of the Conflict of Interest will be assessed and determined.
Without limiting the general and continuing disclosure obligations set forth in the preceding section, the President's Office shall distribute annually to all Covered Persons a form soliciting the disclosure of all potential Conflicts of Interest, including specific information concerning the terms of any contract, transaction or relationships with the College and whether the applicable processes set forth in this Policy were used. Each Covered Person shall also annually sign a statement included with the form distributed by the President's Office which affirms such person:
- Has received a copy of this Policy,
- Has read and understands this Policy,
- Has agreed to comply with this Policy, and
- Understands the College is a charitable organization and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Written disclosures shall be submitted to and reviewed by the President. As provided herein, all potential Conflicts of Interest disclosed in an annual statement shall be forwarded to the President and the Administrative Council.
Approval of Conflicts of Interest
Following receipt of information concerning a contract, transaction or relationship
involving a potential Conflict of Interest, the Administrative Council shall consider
the material facts concerning the proposed contract, transaction or relationship including
the process by which the decision was made to recommend entering into the contract,
transaction or relationship on the terms proposed. The Administrative Council may
issue a recommendation as to the approval and/or management of the proposed contract,
transaction or relationship, and shall only recommend that the College enter those
contracts, transactions or relationships that are fair, reasonable and consistent
with the best interests of the College; provided that if the potential Conflict of
Interest is related to a Related Party Transaction, then the contract, transaction
or relationship must be approved in accordance with the procedures set forth below
in the Section of this Policy entitled "Related Party Transactions." For purposes
of this Policy, fairness includes, but is not limited to, the concepts that the College
should pay no more than fair market value for any goods or services which the College
receives and that the College should receive fair market value consideration for any
goods or services that it furnishes others. The Administrative Council shall memorialize
the rationale for its decision with respect to approval and/or management of contracts,
transactions or relationships involving Conflicts of Interest in a contemporaneous
Under no circumstances may a Covered Person with respect to whom a Conflict of Interest exists be present at or participate in deliberations and/or decisions relating to the matter, or attempt to improperly influence any deliberations or voting regarding the matter. The existence and resolution (as applicable) of any reported Conflict of Interest shall be documented in the appropriate College records, including in the minutes of any meeting at which the Conflict of Interest was discussed and voted upon.
Related Party Transactions
Any Covered Person with any interest in a Related Party Transaction shall make a good
faith disclosure of all material facts related to such interest to the President who
shall report the disclosure to the Administrative Council. The Administrative Council
shall review all the material facts related to the proposed Related Party Transaction
and request any additional information that it deems necessary to complete such review.
Additionally, the Administrative Council shall consider alternative transactions to
the proposed Related Party Transaction to the extent any alternative transactions
are available. Following its review of the proposed Related Party Transaction and
any available alternative transactions, if a majority of disinterested members of
the Administrative Council determine that the proposed Related Party Transaction is
fair, reasonable and in the best interests of the College, then it may recommend to
the President that the College should enter into such Related Party Transaction. The
Administrative Council shall document the rationale for its determination that the
proposed Related Party Transaction is fair, reasonable and in the best interests of
Upon receiving the recommendation of the Administrative Council, the President may authorize the proposed Related Party Transaction if the President determines that it is fair, reasonable and in the best interests of the College. The College shall not enter into a Related Party Transaction unless it is approved in accordance with this Policy.
At the time of any deliberation or decision by the Administrative Council concerning the authorization of a proposed Related Party Transaction, the interested Covered Person shall not be present at the meeting, and such Covered Person shall not attempt to improperly influence any deliberations or voting regarding the Related Party Transaction; provided that the President, or Administrative Council, may request the interested Covered Person to provide information regarding the Related Party Transaction prior to the commencement of deliberations or voting thereon. Any Related Party Transaction that is approved without complying with the procedure set forth in this section shall be void.
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