GIRLS WHO INVEST, INC.
CONFLICT OF INTEREST AND DISCLOSURE POLICY
As Amended on _______, 2021
Purpose Statement
Girls Who Invest, Inc. (the “Organization”) desires to ensure that directors, officers and employees of the Organization act in the Organization’s best interest and in compliance with applicable legal requirements, including the New York Not-for-Profit Corporation Law as in effect from time to time (the “NPCL”).
The primary purposes of this Policy are:
(1) to help directors, officers and employees of the Organization (referred to in this Policy as “Covered Persons”) identify situations that present potential conflicts of interest (including with respect to interests of family members);
(2) to establish a process for Covered Persons to disclose their interests and affiliations that could give rise to conflicts of interest; and
(3) to protect the interests of the Organization when it is contemplating entering into a transaction or arrangement that involves a conflict of interest, and provide a procedure for the handling of such a transaction or arrangement despite such actual or potential conflict.
Each director, officer and employee of the Organization is responsible for reading and remaining familiar with this Policy, and understanding, among other things, how conflicts of interest are defined and how and when they should be disclosed and handled.
A copy of this Policy will be provided to each director, officer and employee at the outset of his or her tenure with the Organization and upon any material revision to the Policy. A copy of this Policy will also be available upon request to the Secretary.
ARTICLE I: DEFINITIONS.
Where used in this Policy, the terms listed below shall have the respective meanings given to such terms in this Article I:
“Affiliate” means any entity that, directly or indirectly, is controlled by, in control of, or under common control with, the Organization.
“Audit and Finance Committee” means the Audit and Finance Committee of the Board.
“Authorized Committee” means a committee of the Board duly authorized under this Policy whose membership shall consist entirely of disinterested Independent Directors.
“Board” means the board of directors of the Organization as it may be constituted from time to time pursuant to the organizational and governing documents of the Organization and applicable law.
“Board Chair” means the chairperson of the Board, provided, that if the chairperson of the Board is not an Independent Director, then for purposes of this Policy, “Board Chair” shall mean the Independent Director designated by vote a majority of the Independent Directors of the Board to fulfill such function in lieu of the chairperson of the Board.
“Compensation” includes direct and indirect remuneration, as well as gifts, gratuities, entertainment or other favors, in each case, that are not insubstantial.
“Conflict of Interest” means any Related Party Transaction or other circumstance in which a Financial Interest or Non-Financial Interest of a Covered Person is reasonably likely to:
(1) conflict or compete with the interests (economic or otherwise) or concerns of the Organization; or
(2) be seen by the public, any federal, state or local government or regulatory body, beneficiaries of the Organization’s charitable mission, donors to the Organization or members, directors, officers and/or employees of the Organization as conflicting or competing with such interests or concerns.
“Financial Interest” means, with respect to a person, that such person has, directly or indirectly, through business, investment or a Relative, an actual or potential ownership or investment interest in, or Compensation arrangement or similar arrangement with, an entity or individual (as the case may be) with which the Organization has entered into, or is negotiating, a transaction or arrangement.
“Independent Director” means a member of the Board who:
(1) is not, and has not been within the last three (3) years, an employee of the Organization or of an Affiliate of the Organization;
(2) does not have a Relative who is, or has been within the last three (3) years, an executive officer or employee of the Organization or of an Affiliate of the Organization;
(3) has not received and does not have a Relative who – in any of the last three (3) fiscal years – has received more than ten thousand dollars ($10,000) in direct Compensation from the Organization or an Affiliate of the Organization other than as reimbursement for expenses reasonably incurred as a director or reasonable Compensation for service as a director set by the Organization (as permitted by NPCL Section 202(a));
(4) (i) is not a current employee of, or does not have a substantial financial interest in, and (ii) does not have a Relative who is a current officer of, or has a substantial financial interest in, any entity that has made payments to, or received payments from, the Organization or an Affiliate of the Organization for property or services in amounts which – in any of the last three (3) fiscal years – exceed the lesser of:
(x) twenty-five thousand dollars ($25,000), or
(y) two percent (2%) of the consolidated gross revenues of such entity or of the Organization.
Note: For purposes of this clause (4), the term “payment” does not include charitable contributions;
(5) is not in an employment relationship under the control or direction of a Related Party and does not receive payments subject to the approval of a Related Party; and
(6) has not approved – and has not made any agreement, understanding, promise or commitment to approve – any transaction providing economic benefits to any Related Party where that Related Party has, in turn, approved (or will approve) a transaction providing economic benefits to such director.
“Non-Financial Interest” means, with respect to a person, that such person has, directly or indirectly, including through a Relative, a non-financial benefit or advantage that he or she would not have obtained absent his or her relationship with the Organization. The circumstances indicated on the list below (which shall not be deemed exhaustive) each constitute a Non-Financial Interest, but other circumstances not listed here may also give rise to a Non-Financial Interest in accordance with the immediately preceding sentence:
(1) a Covered Person seeks to obtain preferential treatment by the Organization or recognition for himself or herself or another Covered Person or Relative, or
(2) a Covered Person seeks to make use of confidential information obtained from the Organization for his or her own benefit or for the benefit of another Covered Person or Relative, or
(3) a Covered Person seeks to take advantage of an opportunity or enables another Covered Person or Relative or other organization to take advantage of an opportunity that he or she has reason to believe would be of interest to the Organization, or
(4) the Organization adopts a policy that provides significant non-financial benefit(s) to a Covered Person or Relative of a Covered Person.
“Related Party” means any of the following:
(1) any director, officer or employee of the Organization or any Affiliate of the Organization;
(2) any Relative of any director, officer or employee of the Organization or of any Affiliate of the Organization;
(3) any entity in which any person in clauses (1) and (2) of this definition has (x) a 35% or greater ownership or beneficial interest, or, (y) in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of 5%;
(4) any non-stock entity controlled by one or more Related Parties; or
(5) any person holding a controlling interest (through votes or value) in the Organization, if any.
“Related Party Transaction” means any transaction, agreement or any other arrangement (x) in which a Related Party has a Financial Interest or Non-Financial Interest and (y) in which the Organization or any Affiliate of the Organization is a participant.
“Relative” means a spouse, ancestor, child (whether biological or adopted) or stepchild, grandchild, great-grandchild, sibling (whether by the whole blood or the half-blood), spouse of a child (whether biological or adopted) or stepchild, grandchild, great-grandchild or sibling or domestic partner (including as defined in Section 2994-a of the New York Public Health Law).
“Secretary” means the Secretary of the Organization duly qualified and elected in accordance with the governing documents of the Organization and applicable law.
ARTICLE II: DISCLOSURE.
Section 2.1. Conflict of Interest Disclosure Forms.
(a) Initial Compliance. When a Covered Person commences association with the Organization (including prior to a director’s election to the Board), he or she shall, in good faith, to the best of his or her knowledge, complete, sign and provide to the Secretary a Conflict of Interest Disclosure Form in the form attached hereto as Exhibit A and an Affirmation of Compliance in the form attached hereto as Exhibit B. Each Covered Person shall include in his or her required disclosure forms at all times any relevant responses pertaining to his or her Relatives.
(b) Annual Compliance. Annually, following commencement of association with the Organization, each Covered Person shall again submit to the Secretary a new Conflict of Interest Disclosure Form in the form attached hereto as Exhibit A and an Affirmation of Compliance in the form attached hereto as Exhibit B.
(c) Distribution by Secretary. The Secretary shall provide a copy of all such forms he or she receives to the chairperson of the Audit and Finance Committee or, if at any time there is no Audit and Finance Committee, to the Board Chair.
Section 2.2. Continuing Duty to Disclose. In addition to the disclosures set forth in Section 2.1, each Covered Person must, promptly upon becoming aware of any Related Party Transaction or other Financial Interest or Non-Financial Interest of him- or herself and/or his or her Relatives, disclose the existence of each such interest and all material facts pertaining to such interest, in good faith, to the best of his or her knowledge to:
(i) the chairperson of the Audit and Finance Committee, or, if at any time there is no Audit and Finance Committee, to the Board Chair, and
(ii) to the extent an Authorized Committee has been designated pursuant to Article III below, to the chairperson of such Authorized Committee.
Disclosure may also be made to the Secretary who shall be required to provide such disclosure to the applicable chairperson(s) as set forth in the preceding sentence.
ARTICLE III: DETERMINATION OF CONFLICT OF INTEREST.
Section 3.1. Audit and Finance Committee. The Audit and Finance Committee (to the extent the Board has designated such committee) shall be comprised solely of Independent Directors at all times.
Section 3.2. Authorization of Body to Make Determination.
(a) Designation by Audit and Finance Committee or Board Chair. Following disclosure by a Covered Person of Financial Interests or Non-Financial Interests, the chair of the Audit and Finance Committee (or, if there is no Audit and Finance Committee, the Board Chair) may designate an Authorized Committee, the Audit and Finance Committee or the Board to determine whether a Conflict of Interest exists.
(b) If Audit and Finance Committee Chair or Board Chair is Not Disinterested. If the chairperson of the Audit and Finance Committee or the Board Chair (as applicable) is not disinterested with respect to the proposed transaction, arrangement or matter in question, then the Audit and Finance Committee or the Independent Directors of the Board (as the case may be) shall, by majority vote, make the appointment required under Section 3.2(a).
Section 3.3. Withdrawal of Person with Potential Conflict. After disclosure of any relevant Financial Interests and Non-Financial Interests and all material and relevant facts by a Covered Person, to the satisfaction of the Board or the applicable Authorized Committee, the Covered Person:
(i) shall leave the meeting while the determination of a Conflict of Interest is discussed and voted upon, and
(ii) may not further participate in deliberations concerning, or vote on, the matter.
Section 3.4. Determination of Conflict. The remaining Independent Directors of the Board or applicable committee who are disinterested in the proposed transaction or arrangement, as designated under Section 3.2 above, shall (a) determine, in good faith, by majority vote whether a Conflict of Interest exists, pursuant to the definition of “Conflict of Interest” set forth in Article I
above and (b) ensure that all required information is recorded pursuant to Section 7.5 below.
Section 3.5. Authorization of Body to Address Conflict of Interest. As soon as possible after the Board or applicable committee (as the case may be) completes its determination under Section 3.4 above as to whether a Conflict of Interest exists, the Board Chair (i) shall appoint a disinterested Independent Director (which may be such Board Chair) or an Authorized Committee to investigate alternatives to the proposed transaction or arrangement, to the extent one or more alternatives are available and (ii) may authorize such Independent Director or Authorized Committee to determine whether the proposed transaction or arrangement should be approved. If the Board Chair is not disinterested, then the disinterested Independent Directors of the Board shall, by majority vote, make any such appointment(s).
Section 3.6. Decision as to Conflict of Interest.
(a) Alternative Transactions. After (i) receiving the findings of the Independent Director or Authorized Committee appointed pursuant to Section 3.5 to review alternative transactions and (ii) exercising all appropriate due diligence, the disinterested Independent Directors of the Board or applicable Authorized Committee shall determine whether the Organization can obtain, with reasonable efforts, a more advantageous transaction or arrangement from or with a person or entity that would not give rise to a Conflict of Interest (any such transaction, an “Alternative Transaction”). If the proposed transaction at issue involves the transfer of real property as consideration, relevant factors include (i) current independent appraisals of the property and (ii) offers received in a competitive bidding process.
(b) Criteria for Approving Conflict of Interest. If the disinterested Independent Directors of the Board or applicable Authorized Committee are unable to identify any Alternative Transaction, the disinterested Independent Directors or applicable Authorized Committee shall make a determination, in good faith, by majority vote whether such proposed Conflict of Interest is:
(i) in the Organization’s best interest,
(ii) for the Organization’s own benefit; and
(iii) fair and reasonable.
If so determined, the Board or Authorized Committee (as applicable) may approve in good faith by majority vote the Conflict of Interest; provided, the vote of two-thirds of the entire Board (or any other applicable threshold) shall be necessary for approval if required by Section 509 of the NPCL (or other applicable law) with respect to the sale or other disposition of all, or substantially all, of the assets of the corporation.
ARTICLE IV: IMPROPER INFLUENCE.
No Covered Person with a Conflict of Interest may improperly influence, or attempt to improperly influence, the deliberation or voting on the matter giving rise to any Conflict of Interest.
ARTICLE V: COMPENSATION DECISIONS
Section 5.1. Voting by Persons with Potential Conflict of Interest; Information Requests. No member of the Board, or of any committee the jurisdiction of which includes Compensation matters, who receives Compensation – directly or indirectly – from the Organization for services (except services in his or her capacity as a member of the Board) may vote on matters pertaining to that member’s Compensation. Any such voting member of the Board, or of any committee, is permitted to provide information regarding Compensation to the Board or any applicable committee to the extent he or she is requested to do so by the Board or such committee and, after providing such information, withdraws from the meeting during the discussion and vote on the proposed Compensation and does not further participate in deliberations concerning, or vote on, such Compensation.
Section 5.2. Comparable Data. Where a contemplated Related Party Transaction pertains to Compensation for services, the Board or applicable committee must determine that the value of the economic benefit provided by the Organization to the Related Party does not exceed the reasonable overall value of the services received in exchange by obtaining and reviewing reasonable, appropriate comparable data prior to entering the transaction. Appropriate comparability data generally includes, to the extent reasonable under the circumstances, the following (but will not necessarily require that all of the following be obtained):
(1) compensation levels paid by similarly-situated organizations, both exempt and non-exempt;
(2) the availability of similar services within the same geographic area;
(3) current compensation surveys compiled by independent firms; and
(4) written offers from similar employers competing for the same person’s services.
ARTICLE VI: COMPLIANCE REVIEW.
A compliance review shall be conducted each year under the supervision of the Audit and Finance Committee, the Independent Directors of the Board (if there is no Audit and Finance Committee) or any Authorized Committee to which the Audit and Finance Committee or Board may delegate such review. In conducting such review, the Board and/or such committee may, but need not, use outside advisors. The annual review shall, at a minimum, include the following:
(1) whether Compensation arrangements and benefits under Related Party Transactions are reasonable, based on competent survey information and the result of arm’s length bargaining;
(2) whether any partnerships, joint ventures, arrangements with management organizations, payments, investments and other transactions conform to the Organization’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement, impermissible private benefit or in an excess benefit transaction;
(3) the implementation of this Policy and the compliance of this Policy with applicable laws; and
(4) any revisions to, or restatements of, this Policy that such applicable committee or Independent Directors may propose from time to time to recommend to the Board for adoption.
ARTICLE VII: POLICY VIOLATIONS.
Section 7.1. Apparent Failure to Disclose. If the Board, the Audit and Finance Committee or applicable Authorized Committee has reason to believe that a Covered Person has failed to disclose a potential Conflict of Interest under this Policy, it shall inform the person of the basis for such belief and allow the person an opportunity to explain the alleged failure to disclose.
Section 7.2. Violations of Policy. If the Board, the Audit and Finance Committee or applicable Authorized Committee determines that a Covered Person has:
(a) recklessly, knowingly or intentionally failed to disclose a potential Conflict of Interest under this Policy,
(b) improperly influenced or attempted to improperly influence any Director with respect to matters as to which such Covered Person has a Conflict of Interest or otherwise violated Article IV,
(c) violated the confidentiality rules of the Organization, including those in Section 7.4, or
(d) otherwise violated this Policy,
the Board, the Audit and Finance Committee or such Authorized Committee shall take such disciplinary and corrective action as the Board, Audit and Finance Committee or Authorized Committee shall reasonably determine, including removal from office and/or termination of employment.
Section 7.3. Voidability of Improper Transactions. Any Related Party Transaction entered into or consummated by the Organization shall be voidable at the election of the Audit and Finance Committee, the Independent Directors of the Board or an applicable Authorized Committee, unless both of the following are true:
(i) the Audit and Finance Committee, Independent Directors or applicable Authorized Committee approved such Related Party Transaction prior to it being executed or consummated; and
(ii) such approval and such execution or consummation were otherwise in compliance with this Policy.
Section 7.4. Confidentiality; No Personal Gain. Each Covered Person shall exercise maximum reasonable care not to disclose confidential information acquired in connection with his or her position, the disclosure of which might be adverse to the interests of the Organization or would violate the privacy rights of any individual (whether a director, officer or employee of the
Organization, or a third party). Further, a Covered Person shall not disclose or use information relating to the Organization’s business for the personal profit or advantage of such Covered Person or his or her Relatives.
Section 7.5. Records of Proceedings. At minimum, the information listed below shall be entered into the minutes and/or other relevant records of the Board and any applicable committee contemporaneously with the Board’s or any such committee’s consideration of the applicable matter in question:
(1) Conflicts of Interest. The names of the persons who disclosed to or otherwise were found to have a Financial Interest or Non-Financial Interest in connection with a potential Conflict of Interest and the nature of any such interest(s), any action taken to determine whether a Conflict of Interest was present and the decision of the disinterested Independent Directors of the Board or applicable committee as to whether a Conflict of Interest in fact existed; and
(2) Related Party Transactions or Compensation Decisions. The names of the persons who were present for (i) questioning or information presentation, (ii) deliberation and (iii) votes relating to any proposed transaction or arrangement constituting a Related Party Transaction or a Compensation decision with respect to a Covered Person, the general nature of the information provided to, and the content of the deliberations of, the Board and/or applicable committee, alternatives to the proposed transaction or arrangement identified and a brief summary of the merits of such alternatives, a record of any votes taken in connection with the proceedings and the basis for the disinterested Independent Directors of the Board’s or applicable committee’s decision with respect to such Related Party Transaction or Compensation decision.
Section 7.6. Relationship to Applicable Law. This Policy is intended to supplement, but does not replace any applicable federal, state and local law governing conflicts of interest and self-dealing applicable to non-profit and charitable organizations, including the NPCL.