Conflict of Interest Policy

Governance policy for transparency, recusal, and documentation

Effective Date: __________

Version: 1.1

Purpose

The purpose of this Conflict of Interest Policy is to protect the integrity of The Art of Drinking Water (“the Organization”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of a Director, Officer, or key contributor, or might otherwise result in a conflict of interest. This policy supports transparency, independent oversight, and responsible stewardship of charitable resources.

Who This Policy Applies To

All members of the Board of Directors (including officers and members-at-large)
Any individual performing compensated operational services for the Organization (in a non-board capacity)
Any individual engaged to provide services to the Organization (e.g., contractors/vendors), as applicable

Definitions

Interested Person: Any Director, Officer, or person with delegated powers who has a direct or indirect financial interest.
Financial Interest: A person has a financial interest if they (or a related party) have a compensation arrangement, ownership interest, or potential benefit from a proposed transaction or arrangement.
Related Party: Includes spouse, domestic partner, child, parent, sibling, in-laws, or any person sharing a household, and any entity in which the Interested Person has a material interest.

Important Governance Principle: Board service is voluntary and unpaid. Compensation is permitted only for operational services performed in a non-board capacity and only when approved by an independent vote, documented in minutes, with required disclosure and recusal.

Reasonable expense reimbursements may be provided with documentation and approval, consistent with policy.

Duty to Disclose

An Interested Person must disclose the existence of any actual, potential, or perceived conflict of interest to the Board prior to discussion or decision-making. Disclosure must occur as soon as the conflict is known.

Recusal & Decision Process

The Interested Person shall leave the meeting (or abstain) during discussion and voting on the matter.
The Board may request factual information from the Interested Person; however, the Interested Person may not attempt to influence the decision.
The remaining disinterested Board members shall determine whether a conflict exists and whether the arrangement is in the Organization’s best interest.
Approval requires an independent vote of disinterested Board members and must be documented in the minutes.

Compensation & Reasonableness

If compensation is proposed for operational services performed in a non-board capacity, the Board will review the arrangement for reasonableness, sustainability, and alignment with the Organization’s mission. The Interested Person must recuse themselves from all discussion and voting regarding their compensation.

Board Members Providing Paid Services Outside Board Duties

Board members may, from time to time, provide professional or programmatic services to the Organization outside of their governance role. Any such services must be:

Clearly separate from board duties
Disclosed in advance to the Board
Approved by an independent vote of disinterested board members
Documented in meeting minutes
Compensated at fair market value

Prior to payment, the Organization will obtain required tax documentation (e.g., a completed Form W-9 for contractor/vendor payments), as applicable. The board member providing services shall recuse themselves from all discussion and voting related to such services or compensation.

Documentation (Meeting Minutes)

The meeting minutes should reflect:

The name of the Interested Person and the nature of the conflict
That the Interested Person recused themselves from discussion and voting
Any alternatives considered and the basis for the Board’s decision
The vote outcome of disinterested Board members

Annual Disclosure & Acknowledgement

Each Director and Officer shall annually sign the disclosure statement below affirming that they have: (1) received a copy of this policy, (2) read and understand it, (3) agree to comply with it, and (4) understand the Organization is charitable and must act primarily in furtherance of its tax-exempt purposes.

Quick Reference (Nonprofit Language)

Term

Meaning

Recusal

Stepping out of discussion and not voting due to a conflict of interest.

Disinterested

Board members who do not have a financial or personal interest in the decision.

Reasonableness

Compensation reviewed against fair market value and the Organization’s sustainability.

The Art of Drinking Water

Annual Conflict of Interest Disclosure Statement

To be completed by each Director/Officer annually (prints as one page)

Acknowledgement

I acknowledge that I have received and reviewed the Organization’s Conflict of Interest Policy and agree to comply with it. I will disclose any actual, potential, or perceived conflicts of interest and will recuse myself from discussion and voting when required.

Name

Board Role / Title

Date

Signature

Disclosure

If you have a relationship, transaction, or arrangement that could be perceived as a conflict, describe it below. If none, write “None.”

Description of Potential Conflict (if any)

Recusal Required? (Yes / No)

Reviewed By (Board Chair / Treasurer)