Governing Policies for the Board of Directors
Harassment consists of unwelcome conduct, whether verbal, physical or visual that is based upon an individual’s gender, race, religion, color, national origin, sexual orientation, disability or other classification protected by law. In keeping with this strong commitment, ERC will not tolerate harassment of anyone, including any Director, employee, vendor, client, customer or visitor.
ERC reaffirms its historical commitment to non-discrimination in the workplace and to the recruitment of qualified employees and Directors without prejudice to their gender, race, religion, color, national origin, sexual orientation, disability or other classification protected by law. ERC is proud of its diversity and encourages members of these groups to seek employment and representation on its Board.
Section 1: Policy
It shall be the policy of ERC that no member, while serving ERC in a leadership capacity, either as an officer or Director or in another type of leadership capacity, will take personal advantage of his or her leadership role by allowing a situation to exist that may be reasonably construed as a conflict of interest situation. This policy is intended to supplement but not replace any applicable state laws governing conflicts of interest applicable to nonprofit and charitable corporations.
Section 2: Definition of Conflict of Interest
Directors are considered to be in a “conflict of interest” whenever they themselves, or members of their family, business partners or close personal associates, may personally benefit either directly or indirectly, financially or otherwise, from their position on the Board. A Director is to use his or her best judgment in determining whether he or she is in a situation which may present, or be perceived to present, a conflict. A Director in a conflict of interest is an “Interested Person.” A conflict of interest may be “real”, “potential” or “perceived,” but the same duty to disclose applies to each should a matter arise before the Board that may pose a conflict for any Director. Full disclosure does not remove a conflict of interest, nor does it automatically create any additional obligations on behalf of a Director.
Section 3: Procedures
a.) Duty to Disclose Potential or Actual Conflicts
Directors must openly disclose a potential, real or perceived conflict of interest to a member of the Governance Committee as soon as the issue arises and before the Board or its Committees make any decisions which involve a potential conflict. If there is any question of doubt about the existence of a real or perceived conflict, the Governance Committee will determine by majority vote if a conflict exists. The person potentially in conflict shall be absent from the discussion and vote.
b.) Determining Whether a Conflict of Interest Exists
After disclosure of the interest and all material facts, and after any discussion with the Interested Person, the Interested Person shall leave the Governance Committee meeting while the determination of conflict of interest is discussed and voted upon. The Governance Committee members shall decide if a conflict of interest exists. The minutes of a meeting in which a potential conflict of interest is disclosed and discussed shall reflect that a disclosure was made and that the Interested Person abstained from voting.
If appropriate based on the circumstances, the Governance Committee may investigate alternatives to the proposed transaction or arrangement involving a potential conflict. After exercising due diligence, the Governance Committee shall determine whether ERC can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest.
If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the Board shall determine by a two-thirds vote of the disinterested Directors whether the transaction or arrangement is in ERC’s best interest and for its own benefit and whether the transaction is fair and reasonable to ERC and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination.
A record of all “interested” transactions that are entered into shall be maintained, and shall indicate the value of the interested transaction.
c.) Violations of the Conflicts of Interest Policy
If the Governance Committee determines that a Director has in fact failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
Section 4: Records of Proceedings
The minutes of the Board and all committees with Board-delegated powers shall contain:
a.) The names of the persons who disclosed or otherwise were found to have a interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the Board’s or committee’s decision as to whether a conflict of interest in fact existed; and
b.) The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connections therewith.
Section 5: Annual Statements
Each Director, principal officer and member of a committee with Board-delegated powers shall annually sign a statement which affirms that such person:
a.) Has received a copy of the conflicts of interest policy;
b.) Has read and understand the policy;
c.) Has agreed to comply with the policy; and
d.) Understands that ERC is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities that accomplish one or more of its tax-exempt purposes.
Section 6: Purpose
The purpose of the corporate relations policy is to protect the integrity of ERC when accepting corporate sponsorship or entering into a corporate partnership. No gifts, contributions, or grants that in any way compromise the mission of ERC shall be accepted.
Section 7: Corporate Partnerships and Sponsorships
A corporation may become a Corporate Partner or a Corporate Sponsor, depending on the level of contribution made to ERC for a specific project, program or special event in support of ERC. ERC shall determine the appropriate level of partnership on a case-by-case basis. In return, ERC may offer Corporate Partners corporate representation on a related advisory board and may publicly recognize the support of the corporation. ERC may publicly recognize the support of its Corporate Sponsors.
Section 8: Guiding Principles
a.) Review & Approval of Sponsorships and Partnerships
Advanced review and approval of the ERC Executive Committee is required for ERC to enter into a Corporate Partnership or Sponsorship where funding is or exceeds 10% of the organization’s annual budget.
(1) The Executive Committee will conduct an annual review of the vision, mission, values and ethical behavior standards of such contributing partners or sponsors.
(2) In the case of a Corporate Partnership, where an individual may hold a leadership or advisory position with ERC, the Executive Committee will conduct a review of that executive.
b.) Written Agreement Regarding Corporate Sponsorships and Partnerships
The ERC shall obtain a written agreement from each Corporate Sponsorship and/or Partnership.
In most cases, a letter of understanding that briefly states the Corporate Sponsorship or Partnership terms, expected outcomes of the program being funded, and the amount of funding is acceptable, pending the review and approval of the review committee.
FINANCIAL REPORTING AND OPERATIONS
Section 9: Purpose
The purpose of this policy is to state ERC’s guidelines relative to financial reporting and operations.
Section 10: Annual Reporting
ERC will conduct and make available on request an annual report that will include the following:
a.) An explicit narrative description of the organization’s major activities, presented in the same major categories and covering the same fiscal period as the audited statements (Annual Report).
b.) A list of ERC Board members.
c.) Audited financial statements.
Section 11: Accountability
ERC will supply on request complete financial statements which:
a.) Are in conformity the generally accepted accounting principles (GAAP), accompanied by a report of an independent certified public accountant, and reviewed by the Board.
b.) Fully disclose economic resources and obligations, including transactions with related parties and affiliated organizations, significant events affecting finances, and significant categories of income and expense.
c.) A statement of allocation of expenses.
d.) Consolidated or combined financial statements.
The audit shall be reviewed by the Audit Committee each year.
The Treasurer is accountable to the Board and as such shall have direct access to all Board members at his or her discretion.
Section 12: Budget
ERC will prepare a detailed annual budget consistent with the major classifications in the audited financial statements and approved by the board.
Section 13: Funds and Restrictions
a.) Funds
All funds of ERC shall be deposited from time to time to the credit of ERC in such banks, trust companies or other depositories as may be selected by the President and authorized by resolution of the Board.
Checks or orders for payments of money, notes or other evidence of indebtedness issued in the name of ERC shall be signed by such officer or officers, agent or agents, and in such manner as from time to time shall be determined by resolution of the Board.
b.) Restrictions
ERC may accept donations, contributions, gifts or bequests from private or public sources, including public or private foundations, for the purposes, general or restricted, of ERC. ERC shall keep a separate accounting of those funds received for restricted use.
In managing and investing the funds of ERC, Directors have a duty of loyalty as well as a duty to investigate. As such, Directors should exercise appropriate due diligence to ensure the accuracy of the information used in making investment and management decisions.
The standard for investing and managing charitable assets is the prudent investor standard. Directors tasked with managing the funds of ERC should (i) act in good faith, with the care that an ordinary prudent person would exercise; (ii) incur only reasonable costs in investing and managing charitable funds; (iii) make a reasonable effort to verify relevant facts; (iv) make decisions about each asset in the context of the portfolio of investments, as part of an overall investment strategy; (v) diversify investments, unless due to special or extraordinary circumstances; (vi) dispose of unsuitable assets; and (vii) in general, develop an investment strategy appropriate for the fund and ERC.
If for any reason investment decisions are delegated to a third party (for instance, to a professional investment advisor or asset manager), the Board is nonetheless responsible for investment decisions made on behalf of ERC. Directors may, when acting in good faith and with the degree of care required by a director or officer, rely on information, opinions, reports or statements prepared or presented by officers or employees of the corporation, counsel, accountants, or other persons as to matters which the directors or officers believe to be within such person’s professional or expert competence.
Directors should periodically review ERC’s investment statements in detail, rather than solely focusing on a rate of return. Directors should also reassess investment decisions to ensure that ERC’s investments are diversified among various investments and various advisors.
The following investments are “per se” suspect and should be carefully considered, and reconsidered, before they are made: (1) trading on margin; (2) trading in commodity futures; (3) investments in working interests in oil and gas wells; (4) puts, calls, and straddles; (5) purchase on warrants; and (6) selling short.
Section 14: Statement of Intent
ERC disseminates information to domestic and international media organizations to deepen the understanding of integrity and character development issues worldwide; and to penetrate its vision and mission into the world’s corporations, organizations, governmental offices and educational institutions.
ERC’s work with the media is based on the highest level of integrity and transparency.
The motivations for ERC’s media work are to:
· Strengthen public knowledge of key integrity and character development issues;
· Build awareness publicly of ERC to strengthen its knowledge and stakeholder base;
· Enhance ERC’s profile with foundation grantors; corporate partners and clients; nongovernmental organizations and governmental entities.
Section 15: Spokespersons
The Chairman of the Board, the President and designated ERC staff members who are selected and notified by President are authorized to make statements on behalf of the organization to members of the media. Additionally, ERC encourages other Board members and staff to serve as spokespersons with the media only in consultation with the above stated references.
All correspondence and interface with members of the media should be coordinated through ERC’s senior management and an appointed staff member.
BOARD COMPENSATION AND TRAVEL REIMBURSEMENTS
Section 16: Board Compensation
ERC shall not issue compensation to any member of the Board, including officers, for performing duties for which he or she was elected.
Section 17: Travel & Reimbursement
All members of the Board, including officers, shall pay for their own travel expenses to and from Board Meetings. However, in instances where a Director is on official ERC business (i.e. speaking engagements or special events), ERC may reimburse travel expenses incurred as appropriate.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
ERC shall purchase and maintain directors & officers liability insurance to indemnify itself and its directors and officers to the extent such insurance coverage as permitted by law.
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