LESSON 28 OF 40 – Where Two or Three Are Gathered on Social Media...
Conflicts of interest always sound more questionable on the internet and social media.
THE BIG IDEA FROM THE BOOK: In Lesson 28, the authors remind board members that decisions made in the boardroom always sound more questionable on the internet and social media, especially those related to conflicts of interest.
Busby and Pearson give four steps when a board is considering significant transactions with related parties:
1. Exclude. All individuals with a conflict of interest, direct or indirect, should be excluded from the discussion and the vote related to the transaction.
2. Compare. Reliable comparability information from appropriate independent sources is considered, such as competitive bids, independent appraisals, or independent expert opinions.
3. Determine. Determine whether the transaction is in the best interest of the church, including determining whether the transaction could be misperceived by givers, constituents, or the public. Remember, the transaction will likely be publicly disclosed.
4. Document. Document steps 1, 2, and 3 in a timely manner.
(Chart from page 152. Click to read Lesson 28.)
MY COLOR COMMENTARY:
Conflicts of interest in the church are tough because we are a close-knit community. The early church in Acts 2 would have had a hard time with “related parties” since that included everyone. Smaller churches can have a harder time with conflicts of interest because it’s difficult to know and sometimes challenging to afford products or services outside the community. Larger churches struggle with the social media effect because more people are taking shots trying to bring them down. Everything is worse on the internet!
We have a few board members at Calvary Church that have given us amazing deals on their services. We have to do the seemingly annoying work of getting multiple competitive bids annually but it’s worth it to be above reproach in all of our financial dealings.
It’s important to remember that sometimes the right decision in the boardroom comes with negative reaction by some—no matter what that decision is. We must practice appropriate transparency on “related party” issues even when that transparency subjects the church to criticism.
• Review your Conflict of Interest policies and disclosures—and discuss how well you follow them.
• Resist the urge to argue with people on social media over any issue.
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 28, “Where Two or Three Are Gathered on Social Media…”
• Inspire your board members to enrich their governance competencies at the ECFA Excellence in Governance Forums (eight cities, Fall 2019).
VIEW THE VIDEO:
NEXT WEDNESDAY: On Sept. 4, 2019, watch for the commentary by Willie Nolte on Lesson 29, “Keeping the Boardroom Afloat. Are too many staff causing the boardroom to capsize?”