The purpose of this Conflict of Interest Policy is to protect the Group Income Program (the “Corporation”) and its participants when the Board of Directors or officers have interests that could conflict with their fiduciary duties. Since all Board members are also participants in the income-sharing program, special measures are needed to ensure decisions are made in the best interest of the program, not personal gain.
Any Director, officer, or key staff member who has a direct or indirect financial interest in a matter being considered by the Board or committee. In this program, all Directors are participants and therefore have a potential financial interest in program rules, payouts, and contributions.
Conflict of Interest
A conflict arises when an interested person’s personal, financial, or familial interests could compromise—or appear to compromise—their decision-making responsibilities to the Corporation. Examples include:
Votes that change contribution percentages, ramp-up rules, or payout structures.
Decisions on allocation of buffer funds or reserves that affect personal payouts.
Approval of special exemptions or rules that benefit one participant over others.
All interested persons must disclose any actual or potential conflict of interest before discussion or voting.
Disclosure must include the nature of the interest and how it relates to the matter under consideration.
Interested persons must recuse themselves from discussions and votes on any matter that directly affects their own financial contributions, payouts, or ramp-up schedule.
Recusal must be recorded in the meeting minutes.
Although all Directors are participants, the Board shall designate independent oversight mechanisms, including:
External auditors for financial reporting.
Transparent public reporting of program finances and payout rules.
Optional advisory committee of non-participant experts for sensitive decisions.
Approval of Transactions
Any transaction or policy affecting participants’ contributions or payouts must be approved according to the following:
Majority vote of Board members not personally affected.
For critical structural changes (e.g., payout percentages, buffer fund rules), a supermajority of non-interested Directors (or recused votes counted as abstentions) must approve.
Annual Disclosure and Review
Each Director and key officer shall complete an annual disclosure statement detailing any personal or financial interests that could potentially conflict with their fiduciary duties.
The Board will review all disclosures annually and maintain a conflict of interest register.
All conflict disclosures, recusals, and decisions must be recorded in the minutes of Board meetings and retained as part of the Corporation’s official records.
Identification of Conflicts
Prior to any meeting, the Chair will ask Directors to declare conflicts of interest for agenda items.
Recusal and Discussion
Conflicted Directors leave the room for discussion and voting on affected items.
Conflicted Directors do not vote on the item.
Record-Keeping
The Secretary records disclosures, recusals, and voting outcomes in the minutes.
Failure to disclose a conflict or comply with recusal procedures may result in:
Reprimand by the Board.
Temporary suspension from decision-making authority.
Removal from the Board if intentional and repeated, subject to Board vote.
This policy ensures:
The Corporation complies with IRS regulations regarding private benefit and self-dealing.
All participants are treated fairly and equitably.
Transparency and trust are maintained within the income-sharing program.