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Resources Page - Conflicts of Interests v3

 

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

Conflicts of Interest

Company policy prohibits conflicts between the interests of its Directors or employees and the Company. A complete definition of what constitutes a conflict of interest is difficult. There are some situations, however, that will always be considered a prohibited conflict of interest. These situations occur when a Director or employee or any person having a close personal relationship with the Director or employee:

• Obtains a significant financial or other beneficial interest in one of the Company's suppliers, customers or competitors without first notifying the Company and obtaining written approval from the Chief Executive Officer or his or her designee;
• Engages in a significant personal business transaction involving the Company for profit or gain, unless such transaction has first been approved in writing by the Chief Executive officer or his or her designee;
• Accepts money, gifts of other than nominal value, excessive hospitality, loans, guarantees of obligations or other special treatment from any supplier, customer or competitor of the Company (loans from lending institutions at prevailing interest rates are excluded);
• Participates in any sale, loan or gift of Company property without obtaining written approval from the Chief Executive Committee or his or her designee;
• Learns of a business opportunity through association with the Company and discloses it to a third party or invests in or takes the opportunity personally without first offering it to the Company.
• Uses corporate property, information, or position for personal gain; or
• Competes with the Company.


A conflict of interest may arise because of outside directorships, personal use of Company property or obtaining Company services for personal benefit.

"Person having a close personal relationship with the Director or employee" refers to the Director's or employee's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, any person living in the same house with the Director or employee or any business associate of the Director or employee.

Periodically the Company requires certain employees to certify to the Company that they have complied with all requirements of the Code of Business Conduct. Disclosure of a particular situation that may be a conflict of interest does not mean that the Company will consider it to be substantial enough to be prohibited. Each situation will be considered on an individual basis.



Code of Business Conduct:
Conflicts of Interest

"Company Name"
CORPORATE POLICY

Date: XX, XX, XXXX

PURPOSE
This Policy establishes guidelines and procedures regarding timely and proper disclosure of possible conflicts of interests which an Employee or Director may have in connection with job duties and responsibilities in order that management may review and approve each situation as necessary to protect the best interests of the Company and its responsibilities as a public company.

POLICY
1. The Company prohibits conflicts of interest unless specifically approved by the Chief Executive Officer or his or her designee as provided below since Directors and Employees have a duty to the Company to advance the Company's legitimate interests when the opportunity to do so arises.


2. The Company has always been concerned with outside business interests of its Directors and Employees that might possibly conflict with the interests of the Company. An adequate definition of what constitutes a conflict of interest is most difficult. However, the Company expects and requires Directors and Employees to be honest and ethical in the handling of actual or apparent conflicts of interest between personal and business relationships. The minimum standard is that required by law.

There are certain situations which the Company will always consider to be conflicts of interest. These occur if the Director or Employee, or any other person having a close personal relationship with the Director or Employee:

a. obtains a significant financial or other beneficial interest in one of the Company's suppliers, customers or competitors without first notifying the Company and obtaining written approval from the Chief Executive Officer or his or her designee;


b. engages in a significant personal business transaction involving the Company for profit or gain, unless such transaction has first been approved in writing by the Chief Executive Officer or his or her designee;


c. accepts money, gifts of other than nominal value, excessive hospitality, loans, guarantees of obligations or other special treatment from any supplier, customer or competitor of the Company (loans from lending institutions at prevailing interest rates are excluded);


d. participates in any sale, loan or gift of Company property without obtaining written approval from the Chief Executive Officer or his or her designee;


e. learns of a business opportunity through association with the Company and discloses it to a third party or invests in or takes the opportunity personally without first offering it to the Company.


f. uses corporate property, information, or position for personal gain; or


g. competes with the Company.

"Person having a close personal relationship with the Director or Employee" refers to the Director's or Employee's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, any person living in the same home with the Director or Employee or any business associate of the Director or Employee.

Outside directorships may create a conflict of interest situation. The Company's policy concerning outside directorships is stated separately in the employee manual.

The use of Company property or obtaining of Company services for personal benefit may create a conflict of interest situation. The Company's policy on these matters is stated separately in the employee manual.

3. As an enhanced conflict of interest provision, the Company prohibits personal loans or extensions of credit by the Company to Directors and executive officers of the Company to the extent such loans are not directly related to and in the ordinary course of the Company's business.


4. If any Director or the Chief Executive Officer of the Company has a possible conflict of interest, the situation should be promptly and fully disclosed to the Audit Committee of the Company. If any other Employee has a possible conflict of interest, the situation should be promptly and fully disclosed to his or her manager or supervisor. It is the responsibility of the manager or supervisor to obtain the approval of the Chief Executive Officer or his or her designee as required by this Policy.


5. The Company shall have on file a statement of compliance from each key Employee who can direct or influence the use or disposition of any significant amount of funds or other assets of the Company. The disclosure of a financial or other beneficial interest does not mean that the Company will deem it significant or substantial enough to be prohibited. Each case will be decided on an individual basis.


6. The Director - Audit Services of the Company will ensure that all Employees subject to this requirement submit annually a completed copy of a statement of compliance. The Director - Audit Services will also be responsible for notifying the Chief Executive Officer and the Audit Committee of the Board of Directors that such statements are on file as well as for notifying the Chief Executive Officer and the Committee when significant exceptions are reported.

PROCEDURE
1. A completed statement of compliance will be obtained annually from all key Employees subject to this requirement. In any instance where the number of key Employees makes this requirement burdensome, statements may be obtained from key Employees during the months which include their employment anniversary dates or on such other schedule as may be approved in writing by the Chief Executive Officer.


2. The completed statements will, subject to the Company's policy on document retention, be retained on file in hard copy, electronic format, microfilm or other media as directed by the Director - Audit Services and a written report setting forth any exceptions included in such reports will be furnished to the Chief Executive Officer no later than January 31 of each year.


3. Statements of compliance will be completed by all Employees. Supplemental reports for such Employees will be obtained annually or as the policies are changed.

4. The statement of compliance selection and reporting process will be reviewed annually by the Director - Audit Services for adequacy and compliance with this Policy.


5. Results of the reporting process and the nature of significant exceptions, if any, will be communicated annually to the Chief Executive Officer and to the Audit Committee of the Board of Directors by the Director - Audit Services.

 


Approved as revised: Board of Directors
("Date Approved")

 

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