Board governance glossary
Definition
What is Conflict of interest?
A conflict of interest exists when a board member’s personal, financial, or professional interests could interfere—or appear to interfere—with duties owed to the association.
What it means in practice
Common examples include considering a contract with a relative’s company, receiving a benefit from a vendor, or voting on a matter that uniquely affects the board member’s unit or business. A conflict does not always mean misconduct has occurred, but it must be identified and handled correctly.
Disclosure, recusal, independent review, and accurate minutes are common safeguards. The required process depends on governing documents, state law, and the nature of the conflict.
Key points for boards
- Disclose a potential conflict before discussion or voting.
- Do not use confidential board information for personal benefit.
- Follow applicable recusal and approval requirements.
- Record the disclosure and resulting process in the minutes.