Lesson 02: Ethical Conduct, Authority, and Conflicts of Interest¶

Lesson overview¶

Ambiguous authority creates preventable harm. This lesson helps organizations establish conduct rules, authority lines, and conflict-of-interest protections.

Key idea¶

Clear authority and ethical conduct policies keep boards and leaders accountable.

Why this matters¶

Without defined conduct and conflict policies, personal interests can override mission integrity.

Field context¶

This applies to nonprofit boards, leadership teams, and field operations where authority and resources intersect.

Leader role¶

Leaders should model ethical conduct and enforce conflict-of-interest disclosures.

Board role¶

The board should approve codes of conduct and review disclosures regularly.

Preparation¶

Draft a code of conduct and conflict-of-interest policy.
Identify who reviews disclosures.
Create a whistleblower reporting process.

Step 1: Define conduct expectations¶

Establish clear behavior standards, reporting lines, and consequences.

Step 2: Clarify authority¶

Document who has final authority for decisions, approvals, and financial commitments.

Step 3: Require disclosures¶

Require board members and leaders to disclose conflicts annually and whenever they arise.

Common challenges¶

People often assume shared values are enough. Policies are necessary to manage real-world pressures.

Practical example¶

A board member discloses a family relationship with a vendor and recuses themselves from the approval process.

Reflection questions¶

What authority lines are unclear in your organization?
How will you document conflicts of interest?
Who will receive whistleblower reports?

Summary¶

Ethical conduct and conflict policies are essential safeguards for healthy governance.

Next step¶

Draft a conflict-of-interest disclosure form and a basic code of conduct.