Not-for-Profit Conflict of Interest Policy

What is a Not-for-Profit Conflict of Interest Policy?

A conflict of interest policy for a not-for-profit organization is a document used to describe situations that may create a conflict of interest for their board members, officers, directors, managers and key employees. This policy document also describes the procedures to be followed in the event of a disclosed conflict or potential conflict.

Conflicts involve situations where the main actor may be motivated by something other than his or her work for the organization. For example, an officer or director will need to disclose a conflict if they receive payment from another source in a transaction involving the organization.

What is the difference between a Conflict of Interest Policy and a Not-for-Profit Conflict of Interest Policy?

A conflict of interest policy is a document that applies to an employer's organization that operates with a view to profit. On the other hand, a not-for-profit conflict of interest policy applies to the unique needs of non-profit organizations. These unique needs include a vision that aligns with the non-profit's objectives without financial gain. Both documents seek to ensure that personal interests do not conflict with the interests of the organization, which generally applies to executive members such as the board of directors or senior officers.

What should a Not-for-Profit Conflict of Interest Policy contain?

A not-for-profit conflict of interest policy should contain information on the organization, the definition of a conflict and how such may arise, disclosure and reporting requirements of potential conflicts, the management of conflicts, and how non-compliance will be addressed.

What has to be done after a Not-for-Profit Conflict of Interest Policy is ready?

Once the conflict of interest policy is ready, employees should sign, either electronically or physically, the acknowledgement at the end of the document confirming they read and understand the Conflict of Interest Policy. The employer should then add a copy of the signed Policy to each employee's file.

The employer will then need to continue monitoring situations that give rise to conflicts and appropriately address them.

Which laws are applicable to a Not-for-Profit Conflict of Interest Policy?

Not-for-Profit Conflict of Interest Policies are subject to not-for-profit corporate law, which requires that the board of directors or officers disclose, in writing, that a conflict may exist and the extent to which the director or officer may be in conflict. The following pieces of legislation apply to incorporated not-for-profit organizations:

• Ontario: Not- for-Profit Corporations Act, 2010
• Alberta: Societies Act, RSA 2000, c S-14
• British Columbia: Societies Act, SBC 2015, c 18
• Manitoba: The Corporations Act, CCSM c C225
• Saskatchewan: The Non-profit Corporations Act, 2022, SS 2022, c 25
• Quebec: chapter C-38 COMPANIES ACT
• New Brunswick: Companies Act, RSNB 1973, c C-13
• Nova Scotia: Societies Act, RSNS 1989, c 435
• Newfoundland: Corporations Act, RSNL 1990, c C-36
• Yukon: Societies Act, RSY 2002, c 206
• Nunavut: Societies Act, RSNWT (Nu) 1988, c S-11
• Northwest Territories: Societies Act, RSNWT 1988, c S-11
• Prince Edward Island: Companies Act, RSPEI 1988, c C-14
• Federal: Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

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