Resources Page - Conflicts of Interests v2


SAMPLE written conflicts of interest policy that should be incorporated within the company employee manual.

Avoiding Conflicts of Interest

We all must avoid conflicts of interest and we should be sensitive to even the appearance of a conflict. A conflict of interest occurs when outside activities or personal interests interfere, or appear to interfere, with our ability to objectively perform our job or act in the best interests of ("Company Name"). This means that all financial, business and other activities both inside and outside your job must be lawful and free of conflicts or even the suggestion of a conflict with your responsibilities to the Company.

Examples of conflicts of interest include:

Having a financial interest in a customer's private company or business

Serving as a board member of a college or university and deciding whether to purchase ("Company Name") products for that institution

Supervising a relative and determining his or her promotions or pay raises

Hiring a supplier managed by a close friend or relative

Receiving discounts or personal gifts from actual or potential suppliers or customers with a value in excess of $100
If you are confronted with a conflict of interest or even if you think there is a possibility that a conflict may exist or appear to exist, you should disclose the situation to your supervisor or manager. Many potential conflicts can be either prevented or remedied by making a full disclosure of the situation.

Conflict of interest situations often arise in our work with outside suppliers or with customers. We select products and services from our suppliers on the basis of quality, price and reliability. In turn, we expect our customers to purchase ("Company Name") products and services on the same basis. Our decisions in dealing with our suppliers and customers cannot be influenced by gifts, personal relationships, hospitality or anything else of value. If you are involved in purchasing products or services for ("Company Name"), or if you influence the purchasing decision, you must be especially careful to avoid the appearance of special treatment.

In general, employees who are not involved in government contracting may occasionally accept or offer a gift valued at less than $100 in connection with a business relationship. When offering a gift to a customer, however, you should confirm with the intended recipient that the offer does not violate the rules and standards of his or her own company.

Gifts in excess of $100 may be acceptable in certain circumstances. An example is a group event attended by you and other Company representatives where the item is provided to all attendees, or a special event or milestone that involves a business relationship. In either of these cases, or in any case where the value of the gift exceeds $100, you must have prior approval from the appropriate level of management before accepting it.

Gifts must never be offered to officials and employees of governments. A gift that is considered reasonable and appropriate under commercial business circumstances may be considered a gratuity or bribe if it is offered to a government employee or a kickback if it is offered to a prime contractor or higher-tier-subcontractor or one of its employees. In addition, the Foreign Corrupt Practices Act (FCPA) makes it a crime to give anything of value to a public official in order to gain favorable treatment for the Company. For additional details on gifts and gratuities related to government contracts, refer to the sections on Government Customers and the Foreign Corrupt Practices Act in this booklet.

Meals, Entertainment and Travel
Infrequently, you may offer and accept meals and entertainment in connection with a business relationship, provided that your activities are consistent with accepted business practices, not lavish or extravagant and do not create a sense of obligation. If you expect meals and entertainment to be outside the norm in terms of frequency and cost, you must obtain approval in advance by an appropriate level of management.

Generally, you may not accept offers of expense-paid travel by a supplier or a customer unless the trip involves a legitimate business purpose or is part of a group hosted by the supplier or customer. Additionally the travel must be approved in advance by an appropriate level of management.

The following gifts are not permitted and may not be given or accepted by ("Company Name") employees under any circumstances:

Gifts in cash or cash equivalents such as coupons or certificates redeemable for cash

Gifts of securities such as stocks, bonds or other negotiable instruments

Gifts of any kind, regardless of value, to government employees, public officials, government contractors or subcontractors

Any other business courtesy given in an attempt to motivate you to do anything that is prohibited by law, regulation or Company policy

Inappropriate Hospitality
As an ("Company Name") employee, you are expected to use good judgment and ensure that travel and entertainment expenditures on behalf of the Company are reasonable and in accordance with Company policy. We do not condone, and we will not reimburse, expenses incurred at any venue or establishment that would reflect negatively on the Company. An example is any entertainment that is sexually oriented, or that exploits anyone with respect to ethnic identity, race or religion. These venues and others like them are not appropriate and should not be used for business entertainment or meetings with customers, suppliers or other business associates.

Insider Trading and Stock Tips
Our success as a public company requires the trust of our shareholders and the investment community at large. In order to maintain that trust, we must not buy or sell stock or any other security on the basis of material non-public information.

You may have access to material non-public information about ("Company Name") or other companies that is not available to people outside the company. Material non-public information, also called "inside information," is unannounced information about ("Company Name") or other companies that can influence an investor to buy, hold or sell a stock. Some examples of material non-public information include unannounced information like marketing plans, plans for mergers and acquisitions, marketing strategy, financial results, new product development, dividend policies, price changes, vendor contracts, procurement and manufacturing plans, labor disputes, changes in top management or sales of significant assets.

Information is considered to be nonpublic unless it has been announced and the financial markets have had time to digest the information. ("Company Name") policy allows employees to trade stock on the third business day following an announcement.

You should be careful not to knowingly or unintentionally pass on material non-public information to anyone, including family or friends, who could then innocently disclose the information to others. Passing this information to others can be considered stock "tipping" if another person buys or sells securities based on the information you provide. In that case, both you and the other person could be guilty of insider trading. This is true even if you did not trade the stock or gain any benefit from the sale of the stock by the other person.

Insider trading and stock tipping is a violation of ("Company Name") policy and Federal and state securities laws. Employees who engage in either are subject to dismissal as well as severe penalties under the law. If you need assistance in determining how the insider trading rules apply to specific situations, you should contact the ("Company Name") Legal Department.

Corporate Opportunities
Each of us owes a duty to the Company to advance its legitimate interests when the opportunity to do so arises. You must not use your position with the Company, or any Company property or information, to compete with ("Company Name") or personally gain or benefit from opportunities or ideas developed in the course of your work for the Company. These opportunities and ideas are the property of ("Company Name") and a conflict of interest may exist if you use them for personal benefit without prior written consent from the Company. In addition, you may not use your position with ("Company Name"), or any ("Company Name") property or information, for the benefit of any other person or organization even if you do not personally benefit.

Outside Employment
You must be careful to avoid a potential conflict of interest if you pursue another position outside the Company. If you do, your position must not interfere with your ability to objectively perform your duties at ("Company Name") or act in our best interest. While working for ("Company Name"), you must not work for or benefit a competitor of ("Company Name") and your work must not reflect negatively on the Company. In addition, you may not use Company equipment in any outside employment.

If you are considering an outside position, you should check with your supervisor or manager before accepting it. Depending on the nature of the position, you may be required to get approval from ("Company Name") management.

Financial Interests In Other Companies
We respect your right to invest in other companies as long as your financial interest does not conflict with your responsibilities as an ("Company Name") employee or jeopardize the Company's reputation.

Company policy prohibits you or a family member from having a significant financial interest in a company which does or seeks to do business with ("Company Name"), unless the interest has been fully disclosed in writing to the Company and it has been determined that it does not represent a conflict of interest. Family members include close relatives (by blood or marriage) and also any person living in your household.

("Company Name") considers any financial interest to be "significant" if it might influence your judgment or your actions on behalf of our Company. However, an investment of less than 1% of the market value of a publicly traded company may be disregarded.

Memberships on Boards and Committees
Employees are encouraged to participate in professional organizations and community activities. However, if you receive an invitation to serve as a board member of an outside company, advisory board, committee or agency, you must obtain approval from the ("Company Name") Ethics Officer. Approval is not required for membership on the boards of charitable or community organizations as long as your activities do not conflict with your job responsibilities or reflect negatively on the Company.

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