Conflict of Interest & Conflict Resolution Policy

Conflict of Interest &
Conflict Resolution Policy

Subject: Understanding, monitoring and managing conflicts of interest

Approving Authority: Board of Directors, Fibromyalgia Association Canada (FAC)

Responsible Officers: Conflict Resolution Officers (CRO)

Responsible Committee: Legal and CRO Committee

Related Procedures: ByLaws of Fibromyalgia Association Canada

Effective Date: 05 January 2022

Supercedes: (New)



SECTION 1 – GENERAL

1.1 PURPOSE & SCOPE

This policy applies to the Board of Directors of Fibromyalgia Association of Canada (the “Association”), Committee Members and General members, staff/students, and volunteers.

All Board Members/Members have a duty to ensure that the integrity of the decision-making processes of the Board is maintained by ensuring that they and other members of the Board are free from conflict or potential conflict in their decision-making. It is inherent in a Board Members/Members fiduciary duty that conflicts of interest be avoided. It is important that all Board Members/Members understand their obligations when a conflict of interest or potential conflict of interest arises.

The Board is committed to deal with conflict resolution and complaints in a constructive, efficient, fair and respectful manner. Every effort will be made to accommodate our members’ diverse needs.

This policy, in addition to the Bylaws, sets out principles, guidelines and procedures for identifying, monitoring and managing actual and potential conflicts of interest.

The Board of Directors, Committee Members, Professional Advisory Committee, General Members, staff/student placements, and volunteers shall avoid situations in which they may be in a position of conflict of interest or perceived conflict of interest. The bylaws contain provisions with respect to conflict of interest that must be strictly adhered to.

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1.2 DEFINITIONS

In this Conflict of Interest and Conflict Resolution Policy, the following definitions shall apply:

    a. “Benefit” any payment or material benefit (including property, loans, goods and services), other than reasonable out of pocket expenses.
    b. “Board Member/Member” means a person who is a member of the Board or one of its committees, including General members, staff/student members and Volunteer members.
    c. “Complaint” is an expression of dissatisfaction, made to the association, related to the association’s activities, operations, policies, employees, volunteers or the complaints handling and dispute resolution process itself, where a response or resolution is explicitly or implicitly expected.
    d. “Complainant” is a party that makes a complaint or files a formal charge, for example, a member of the public, association members, employees, volunteers, suppliers and contractors.
    e. “Conflicts or conflicts of interest” include actual, potential and perceived conflicts of interest and/or duty.
    f. “Conflict of interest” applies to any situation where a Board Member’s/Member’s duty to act solely in the best interests of the association and to adhere to the Board Member’s/Member’s fiduciary duties is compromised or impeded by any other interest, relationship or duty of the member.
    g. “Designated support person” is an individual to accompany the Board Members/Members in the conflict resolution process; they may not hold a past or existing conflict of interest or be in a process of conflict resolution with the association.
    h. “Disclosure” is when a Board Member/Member makes a general declaration of the Board Member’s/Member’s relationships and interests in entities or persons that give rise to conflicts.
    i. “Dispute” means an unresolved complaint. In other words, it is a matter that has been dealt with as a complaint under this Policy, but where the complainant is still not satisfied with the outcome.
    j. “Mediation” is a voluntary process of negotiation between two disputing Board Members/Members, or a Board Member/Member and the association, assisted by a neutral party.
    k. “Persons who are connected” with a Board Member/Member include anyone with whom the Board Member/Member has a personal or business relationship. This includes but is not limited to familial relations, partner, spouse, close personal friends, or business or personal associates.
    l. “Resolution Body” shall consist of the conflict resolution officer(s), a member(s), designated support persons.
    m. “Resolution Committee” shall be established with both Conflict Resolution Officers and two Board Members/Members from amongst the Board of Directors.
    n. “Transact(s)” is to do, carry on, or conduct business, negotiations, or activities etc.

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SECTION 2 – POLICY

2.1 INTRODUCTION

A conflict of interest arises in any situation where a Board Members/Member’s duty to act solely in the best interests of the association and to adhere to the Board Members/Members’s fiduciary duties is compromised or impeded by any other interest, relationship or duty of the Board Member/Member. A conflict of interest also includes circumstances where the Board Member’s/Members’s duties to the association are in conflict with other duties owed by the Board Member/Member such that the Board Member/Member is not able to fully discharge the fiduciary duties owed to the association.

Conflicts of interest can inhibit open discussions and may result in Board Members/Members taking irrelevant considerations into account or making decisions that are not in the Association’s best interests. They can also damage the reputation of the Association whether or not there is an actual conflict, if it appears that the Board Members/Members may be influenced by personal interests or loyalties. All Board Members/Members must therefore be alert to the possibility that they, or their colleagues, could be affected by a conflict of interests.

It is acknowledged that not all conflicts or potential conflicts may be satisfactorily resolved by strict compliance with the bylaws. There may be cases where the perception of a conflict of interest or breach of duty (even where no conflict exists or breach has occurred) may be harmful to the association notwithstanding that there has been compliance with the bylaws. In such circumstances, the process set out in this policy for addressing conflicts and breaches of duty shall be followed.

It is recognized that the perception of conflict or breach of duty may be harmful to the association even where no conflict exists or breach has occurred and it may be in the best interests of the association that the member be asked to resign.

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2.2 TYPES OF CONFLICTS OF INTEREST

    a. A real conflict of interest involves a conflict between the public duty and private interests of a Board Member/Member, in which the private interests could influence the performance of their duties, or in which a Board Member/Member uses their office for personal gain.
    b. A perceived conflict of interest can be said to exist where a Board Member/Member’s private interests would appear to a reasonable person to conflict with their board duties even though there may not be an actual conflict.
    c. A potential conflict of interest arises where a Board Member/Member has private interests such that, while no conflict has yet arisen, a conflict would arise were the Board Member/Member to become involved in discharging responsibilities in the future that could be influenced by the private interest.

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2.3 IDENTIFYING CONFLICTS OF INTEREST

A conflict of interest is any situation in which a Board Member’s/Members’s direct or indirect interests could, or could be seen to, prevent them from making a decision only in the best interests of the Association.

Conflicts of interest may arise:

    a. where a Board Member/Member (or a person connected to them) stands to obtain a benefit from the Association; or
    b. where a Board Member/Member has a duty of loyalty to a third party that conflicts with their duty to the Association.
    c. the situations in which potential conflict of interest may arise cannot be exhaustively set out.

When considering whether they have a conflict of interest, a Board Member/Member must be aware of the following principles:

    a. a conflict of interest exists if there is a possibility that the Board Members/Members’ personal interest could influence their decision-making, even if the Board Member’s/Member’s decision-making is not in fact adversely affected by the conflict. A reasonable perception that a conflict of interest exists can be enough for a Board Member/Member to be in breach of their duties; and
    b. the interest that gives rise to a conflict may be direct or indirect; a conflict may relate to the interests of someone who is connected to a Board Member/Member as well as to their own personal interests.

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2.4 DECLARING CONFLICTS OF INTERESTS

Each Board Member/Member has a personal responsibility to declare any interest that might reasonably be regarded as potentially giving rise to a conflict: upon appointment, on an annual basis, and as situations arise.

Where (i) a member is not present at a meeting where a matter in which the member has a conflict is first discussed and/or voted upon, or (ii) a conflict arises for a member after a matter has been discussed but not yet voted upon by the Board, or (iii) a member becomes conflicted after a matter has been approved, the member shall make the declaration of the conflict to the Board as soon as possible and at the next meeting of the Board.

The information provided by Board Member/Member must be recorded in a register of Board Member/Member interests which shall be maintained by the Administration Committee and be available for public inspection.

Before a prospective Board Member/Member is appointed, they must be asked to declare any direct or indirect interests that might give rise to a conflict of interests. If the Board Member/Member considers it likely that the prospective Board Member/Member will be subject to serious or frequent conflicts of interest, the Board Member/Member should consider whether it is appropriate to proceed with the appointment.

If a Board Member/Member considers that they have an actual or potential conflict, they must inform the Board as soon as possible and always before any discussion of the relevant matter. The declaration must specify the nature and extent of any direct or indirect interest that gives rise to the conflict.

If a Board Member/Member is aware that another Board Member/Member has an actual or potential conflict that has not been declared, they must notify the Board.

If a Board Member/Member is uncertain whether or not they are conflicted, they must err on the side of openness and declare the interest.

The Secretary must note all conflicts declared in the minutes of the meeting in which they were declared or, if not declared in a meeting, in the minutes of the next meeting.

The member who has declared a conflict shall not be present during the discussion or vote in respect of the matter in which the member has a conflict and shall not attempt in any way to influence the voting.

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2.5 EXAMPLES OF CONFLICTS OF INTEREST

The situations in which potential conflict of interest may arise cannot be exhaustively set out. Conflicts generally arise in the following situations:

    a. Transacting with the Association
      When a Member transacts with the association directly or indirectly. When a Member has a material, direct or indirect, interest in a transaction or contract with the association.
    b. Interest of a Relative
      When the association conducts business with suppliers of goods or services or any other party of which a relative or member of the household of a Member is a principal, officer or representative.
    c. Gifts
      When a Board Member/Member or a member of their household or any other person or entity designated by the Board/Committee, accepts gifts, payments, services from a party with whom the association may transact business (including a supplier of goods or services) for the purposes of (or that may be perceived to be for the purposes of) influencing an act or decision of the Board.
    d. Acting for an Improper Purpose
      When Board Member/Member exercise their powers motivated by self-interest or other improper purposes. Members must act solely in the best interest of the association. Board Member/Member who are nominees of a particular group must act in the best interest of the association even if this conflicts with the interests of the nominating party.
    e. Appropriation of Association Opportunity
      When a Board Member/Member diverts to the member’s own use, an opportunity or advantage that belongs to the association.
    f. Duty to Disclose Information of Value to the Association
      When Board Member/Member fail to disclose information that is relevant to a vital aspect of the association’s affairs.
    g. Serving on the Board of Other Associations
      A Board Member/Member may be in a position where there is a conflict of “duty and duty”. This may arise where the Board Member/Member serves as a Board Member/Member of two associations that are competing or transacting with one another. It may also arise where a Board Member/Member has an association or relationship with another entity. For example, if two associations are both seeking to take advantage of the same opportunity. A Board Member/Member may be in possession of confidential information received in one boardroom or related to the matter that is of importance to a decision being made in the other boardroom. The Board Member/Member cannot discharge the duty to maintain such information in confidence while at the same time discharging the duty to make disclosure. The Board Member/Member cannot act to advance any interests other than those of the Association.

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SECTION 3 – PROCESS FOR RESOLUTION OF CONFLICTS AND ADDRESSING BREACHES OF DUTY

All Board Members/Members shall comply with the requirements of the bylaws.

A Board Member/Member may be referred to the process outlined below in any of the following circumstances:

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3.1 CIRCUMSTANCES FOR REFERRAL

Where any member believes that a member:

    a. Has breached the member’s duties to the association;
    b. Is in a position where there is a potential breach of duty to the association;
    c. Is in a situation of actual or potential conflict of interest; or
    d. Has behaved or is likely to behave in a manner that is not consistent with the highest standards of:
      i.) Trust
      ii.) Integrity
      iii.) (the) Code of Conduct

Whereas, such behaviour may have an adverse impact on the association.

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3.2 PROCESS FOR RESOLUTION

The matter shall be referred to the following process:

    a. refer matter to Chair/Vice-Chair and Conflict Resolution Officer(s):
      The Chair/Vice-Chair and Conflict Resolution Officer(s) may either:
        (i) Attempt to resolve the matter informally (mediation), or formerly;
        (ii) If the Chair/Vice-Chair and Conflict Resolution Officer(s) elect to attempt to resolve the matter informally through mediation and the matter cannot be informally resolved to the satisfaction of the Chair/Vice-Chair, Conflict Resolution Officer(s), the member referring the matter and the Board Member/Member involved then the mediation shall proceed formally (2)(ii) above;
        (iii) Formally resolved matters shall be reported to the Board;
        (iv) The right is afforded to each Board Member/Member, when engaging in the conflict resolutions process to request the formation of a Resolution Body consisting of the Conflict Resolution Officer(s) and the Board Member/Member(s) plus their designated support person(s);
        (v) It is recognized that if a conflict, or other matter referred cannot be resolved formally to the satisfaction of the Chair/Vice-Chair and Conflict Resolution Officer(s) an ad-hoc resolution committee shall be established with both Conflict Resolution Officers and two members from amongst the Board in an attempt to further mediate to an amicable resolution
        (vi) In the event that a resolution of the matter is not possible, the matter and recommendations of the Conflict Resolution Officer(s) are presented to the Board where the decision of the Board by majority resolution shall be determinative of the matter;
        (vii) In the event that a resolution of the matter is rendered from the formal process, the matter is formally closed and presented to the Board;
        (viii) Or if a breach of duty has occurred, a Board Member/Member may be asked to resign or may be subject to removal pursuant to the bylaws and applicable legislation;
    b. Where the issue may involve one or both of the Chair/Vice-Chair,
        (i) Where the issue may involve one of the Chair/Vice-Chair, the matter is then referred to the Conflict Resolution Officer(s) and the Chair not in conflict:
        (ii) In the event that both the Chair and the Vice-Chair are in conflict an ad-hoc resolution committee shall be established with both Conflict Resolution Officers and two members from amongst the Board;
        (iii) It is recognized that in the aforementioned event all matters shall proceed as indicated in the conflict resolution process as stated above in subsection 2.a. (i).

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4. MONITORING, ENFORCING AND REVIEWING THIS POLICY DEALING WITH CONFLICTS OF INTEREST

4.1 REPORTING

Any Board Member/Member who becomes aware of a breach of this policy or a perceived breach of this policy must report it to the Board of Directors as soon as possible.

The Board Member/Member must:

    (a) Report all breaches of the Conflict of Interest and Conflict Resolution Policy to the Board of Directors and to the Legal/ Conflict Resolution Committee as soon as possible and to the Conflict Resolution officers; and
    (b) Ensure that all breaches are noted in the Board minutes and/or relevant committee meeting minutes.

The Board has implemented this policy in order to monitor and manage conflicts of interest and other types of conflicts. Any failure to comply with the terms of this policy will not, in itself, result in a decision of the Board being invalidated.

This policy must be reviewed annually by the Board of Directors with any recommended changes reported to the Board for approval and must be comprehensively reviewed by the Association at least every 3 years.

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4.2 DECLARATION AND DISCLOSURE STATEMENT(S)

On appointment, all Board member/member must complete a declaration form;

Acknowledgement and Disclosure Statement:

    a. listing any personal interests, business interests or other direct or indirect interests that might potentially give rise to a conflict of interests.
    b. listing any interests of persons connected to them that may potentially give rise to a conflict of interest;
    c. declaring any gifts or hospitality received or offered to them in their capacity as board member/member;
    d. confirming that they are not aware of any conflict, other than those already disclosed, that exists between their role and their personal circumstances or other interests;
    e. confirming that they will update the form annually, or sooner if any changes occur; and
    f. confirming that they will declare any conflict that arises in future

At least once in every 12-month period, all Board members/members must review the information relating to them contained in the Acknowledgement and Disclosure Statement and declare that the information is correct or make a further declaration if necessary.

This policy may be amended by the Board of Directors.

Approved by The Board of Directors:

Reviewed by:_______

Conflict of Interest &
Conflict Resolution Policy



APPENDIX 1

1.1 ACKNOWLEDGEMENT FROM BOARD MEMBERS (form)

1.2 ACKNOWLEDGEMENT FROM COMMITTEE MEMBERS (form)

1.3 ACKNOWLEDGEMENT FROM PROFESSIONAL ADVISORY COMMITTEE (form)



APPENDIX 2

2.1 NOTICE OF CONFLICT OF INTEREST TO BOARD OF DIRECTORS (form)

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