Conflict of interest is one of the most important issues in most boards, particularly non-profit boards. A director is entrusted with the duty to act in the best interests of the organization, not in their own best interests. It is a matter of public trust for groups to believe that their board members are acting in the organizations best interests. To keep this public trust we have to identify potential conflicts – the earlier the better.
The agenda is one of the first tools. An agenda should be circulated days before each meeting, with enough detail that a director can determine if there is going to be any potential conflicts. When decisions are going to be made at the board room table where a conflict of interest has been declared then the appropriate steps can be taken. The board member who has declared a conflict will not be provided with any information in the board package about that decision and will recuse themselves from the meeting while this decision is being discussed. The step of sending the agenda early will help to avoid situations where the board is already discussing an issue when a director realizes that they should not be in the room!