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Conflicting Obligations

I was recently preparing a presentation on conflicts of interest for a conference called "Representing and Managing Tax-Exempt Organizations" at Georgetown Law School. I studied up on the different approaches non-profits take to ensure their board members and employees are fully aware of the activities they are permitted to engage in and, more importantly, the activities they may not. I reviewed the influence of SOX on the non-profit sector and noted that many charities have adapted how they handle conflicts of interest and protect whistleblowing employees, board members and vendors.

I boned up on different mechanisms organizations use to keep tabs on executive pay, perks and reimbursement of mission-related expenses. Some charities rely on their executive committees. Others let the audit committee take the reins, with appropriate reporting to the full board.

This got me thinking. But for some other news stories about egregious conduct at the Smithsonian that led to Congressional oversight, this situation might never have come to light. Clearly, no amount of legal training at a conflicts of interest seminar is going to prevent such situations if nobody in charge has any judgement or knows right from wrong. I can't teach that in 90 minutes.

Bruce Collins is the corporate vice president and general counsel of ?? 1/2


Bruce D. Collins

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