D4C Duty of Loyalty Policy
Purpose
This policy outlines the duty of loyalty owed by the members of the Board of Directors of District 4 Coalition and establishes procedures for addressing conflicts of loyalty.
Duty of Loyalty
Every Director serving on a D4C’s Board of Directors owes a duty of loyalty to the organization. This duty is codified in Oregon’s Nonprofit Corporation Act, which provides that directors must discharge their duties “in a manner the director reasonably believes to be in the best interests of the corporation.” Directors – when voting, making decisions, or otherwise acting on behalf of D4C – must place the interests of the organization above:
- Their personal interests;
- The interests of relatives, friends, or partners;
- Their business or financial interests; and
- The interests of other organizations they serve or represent.
Conflicts of Loyalty
A conflict of loyalty may arise when a Director owes duties of loyalty to more than one organization, and the best interests of this organization (i.e., D4C) conflict with those of another. Conflicts of loyalty do not involve a Director’s personal financial interest but may involve competing organizational missions, obligations, or expectations.
Procedure
When a conflict of loyalty arises, the Director must:
- Declare the conflict of loyalty;
- Explain its nature;
- Refrain from influencing any deliberations and any vote;
- Abstain from voting.
The conflict and related actions must be documented in the meeting minutes.
Compliance
Failure to comply with this policy may constitute a breach of fiduciary duty under Oregon’s Nonprofit Corporation Act and may subject the Director to removal from the Board.