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3RBA Board of Directors Votes to Amend Bylaws to Set Forth More Detailed "Conflicts of Interest" Policies

April 08, 2021 2:04 PM | Ronald Hicks (Administrator)

TO ALL 3RBA MEMBERS:

Pursuant to Section 9.10 of 3RBA's Bylaws, notice is hereby given that in connection with its March 25, 2021 meeting with which a quorum was present, 3RBA's Board of Directors unanimously voted to delete Section 9.6 of the Bylaws and replace it with the text set forth below in this notice.  Further, this amendment shall become effective within twenty-one (21) days of the date of this notice unless a petition is filed with 3RBA's Secretary signed by at least twenty percent (20%) of members in good standing requesting a vote of the membership on the subject amendment(s), or particular portion(s) thereof.  

The proposed amended Section 9.6 is as follows:

Section 9.6 Conflicts of Interest

(a)  Identification.  An actual or potential conflict of interest arises when any of the following circumstances exists or is threatened:

(1) a proposed transaction or arrangement under consideration by the Board, or any ongoing business relationship, involves a Contracting Entity with respect to which there is an Interested Director or Interested Officer;

(2) an opportunity within the scope of activities of the Corporation could be exploited by a Director or officer, a Director or officer’s Family Member, or a Contracting Entity with respect to which there is an Interested Director or Interested Officer; or

(3) a proposed transaction or compensation arrangement involves a Disqualified Person.

(b) Procedure for Determining Whether a Conflict Exists.

(1) Disclosure Statements.  Each Director and officer shall complete an annual Conflict of Interest Disclosure Statement, describing any interest of the Director or officer. It is his or her duty to make a full, frank and fair disclosure of the circumstances giving rise to an actual or potential conflict of interest. Each Director and officer is also obligated to file a supplementary Disclosure Statement if, during the year, there is any change in circumstances that alters or makes Incomplete the information provided in the original Disclosure Statement. It shall be the responsibility of the President to review each of the Disclosure Statements and bring any perceived conflicts of interest to the attention of the Board of Directors.  Attached at the end of this document is a sample Disclosure Statement.

(2) Additional Disclosure.  If, during the course of a meeting of the Board of Directors, a Director or officer present at the meeting is aware that he or she has or may have an actual or a potential conflict of interest in a matter under discussion, the Director or officer shall immediately disclose the material facts about his or her interest in the matter to the Board of Directors. If, during the course of a meeting, the President, any Director or any officer present at the meeting believes that another Director or officer has or may have an actual or potential conflict of interest in a matter under discussion, such person shall immediately make such concern known to the Board of Directors.

(3) Analysis of Conflict Issue.  The determination of whether there is a conflict of interest in any particular circumstances shall be made by the Board of Directors. The review shall be subject to the following process:

(i) Questioning of the Involved Director or Officer. It is the involved Director’s or involved officer’s duty to respond fully and frankly to any questions from the President or Directors relating to the actual or potential conflict of interest.

(ii) Exclusion of the Involved Director or Officer. The involved Director or involved officer shall leave the Board meeting while the question of whether a conflict exists is discussed and voted upon.

(4) Disqualified Persons. Notwithstanding the foregoing, any proposed transaction or compensation arrangement with a Disqualified Person shall be deemed to present a conflict of interest and shall be dealt with in accordance with the procedures set forth in subsection (d), below.

(c) Procedure after Determining the Existence of a Conflict.

(1) Appointment of Disinterested Individual or Committee to Investigate.  In the event the Board of Directors concludes that a conflict exists, the President or a majority of the disinterested Directors present may appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement which presents the conflict.

(2) Board Action.  The Board of Directors may approve the transaction or arrangement which is the subject matter of the conflict by an affirmative vote of a majority of the disinterested Directors present, provided that it has determined (i) that the transaction or arrangement is in the Corporation’s best interest and for its own benefit; (ii) that it is fair and reasonable to the Corporation; and (iii) after exercising due diligence, that the Corporation could not obtain a more advantageous transaction or arrangement with reasonable efforts under the circumstances. Approval of transactions involving Disqualified Persons shall be by a committee on which the affected Disqualified Person does not serve. In addition, with respect to any proposed transaction or compensation arrangement with a Disqualified Person, the Committee and disinterested Directors shall have obtained and relied upon appropriate comparability data in making their determination. Any involved Director or involved officer or any Disqualified Person shall leave the Board meeting while the substantive issue which is the subject of the conflict is discussed and shall not vote on said substantive matter.  Solely for purposes of this Section, the term “disinterested Director” shall mean a Director who is unrelated to and not under the control of the Director, officer or Disqualified Person, as the case may be.

(d) Minutes.  The minutes of the Board meetings and Board committee meetings shall reflect (i) the names of the persons who disclosed any interests; (ii) the determination as to whether an actual or potential conflict of interest exists; (iii) the names of the persons who were present for discussions and votes relating to the transaction or arrangement; (iv) the content of the discussions, including any alternatives to the proposed transaction or arrangement and, with respect to a transaction or compensation arrangement with a Disqualified Person, the basis for the determination of the Board, including any comparability data; (v) the voting record, including any abstention from voting; and (vi) any action to be taken.

(e) Recordkeeping.  In addition to the annual Disclosure Statements, each Director and officer annually shall sign a statement that the person (i) received a copy of the conflict of interest policy: (ii) has read and understands the policy; (iii) agrees to comply with the policy; (iv) understands that the policy applies to all committees of the Board; and (v) understands that the Corporation is a Code Section 501(c)(6) organization and that in order to maintain its tax exempt status, it must continuously engage primarily in activities which accomplish one or more of its tax-exempt purposes.

(f)        Periodic Review. The Board of Directors shall at least biannually conduct a review of the Corporation’s activities to ensure that the Corporation is operating in a manner consistent with its charitable purposes and that its operations do not result in private inurement or impermissible benefit to private interests.

(g) Violation of Policy.  Any Director, officer or Disqualified Person who violates the Corporation’s conflict of interest policy, irrespective of whether he or she is doing so to protect the Corporation’s best interests, shall be subject to disciplinary action by the President or the Board of Directors, up to and including termination of employment, if applicable, or removal from the Board or a committee thereof.

(h)  Definitions. The following words and phrases, when used in this section, shall have the meanings given to them in this subsection:

(1)  Contracting Entity.  Pay entity engaged in a transaction or arrangement with the Corporation.

(2) Disqualified Person.  An individual who qualifies as a Disqualified Person as that term is defined in Section 4958(f)(1) of the Code. As a general principle, Disqualified Persons are persons who have (or at any time during the preceding 5-year period had) substantial influence over the Corporation and the Family Members of such individuals. Disqualified Persons also include organizations (corporations, partnerships, trusts and estates) which are controlled by persons who have or have had substantial influence over the Corporation.  Control is established when the influential individual owns 35% or more of the organization.  By way of illustration, a Disqualified Person is presumed to include (i) each voting Director; (ii) each officer of the Corporation with primary authority to initiate executive decisions and who is responsible directly to the Board; (iii) the five highest compensated non-clerical employees of the Corporation and the five highest annual recipients of consideration, provided, in each case, that the remuneration received from the Corporation and/or its affiliates is greater than $25,000 annually; and (iv) substantial contributors to the Corporation.

(3) Family Member. A spouse, sibling (whether by whole or half-blood), lineal ancestors (parents, grandparents, great grandparents, etc.), lineal descendants (children, grandchildren, great grandchild, etc.) and the spouse of any sibling (whether by whole or half-blood) or lineal ancestor or descendant.

(4) Financial Interest. Directly or indirectly, through business, investment or a Family Member:

(i)  An ownership or investment interest in any Contracting Entity;

(ii)  A compensation arrangement with the Corporation, with any Contracting Entity or with any individual with whom the Corporation has a transaction or arrangement; or

(iii) An ownership or investment interest in, or compensation arrangement with, or with any entity or individual with which the Corporation is negotiating a transaction or arrangement.

The term “compensation” includes direct and indirect remuneration and substantial gifts and favors. In the event the Director or officer is not certain if a particular gift or favor is substantial, disclosure should be made. A Director or officer who has a Financial Interest in any affiliate of the Corporation shall be deemed to have a Financial Interest with respect to the Corporation as well.

(5)  Interested Director/Interested Officer.  A Director or officer who has a Financial Interest or who serves or whose Family Member serves without compensation as a director, trustee or officer of a Contracting Entity.

Exhibit B

C O N F I D E N T I A L

THREE RIVERS BUSINESS ALLIANCE (the “Corporation”)

CONFLICT OF INTEREST DISCLOSURE STATEMENT

Name:                                                                     

  • I.                         Employment
  • 1.                  Current Employer:                                                                                       
  • 2.                  Position:                                                                                                        
  • 3.                  To the best of your knowledge, does your employer offer any service (e.g., medical, legal, accounting) or product to, or do business with, the Corporation?

Yes                                                        No                              

  • 4.                  If yes, what is the service/product and what is the estimated annual dollar volume of such business?
  •                                                                                                                                    
  •                                                                                                                                    
  • II.                       DIRECT AFFILIATIONS

If you (a) have an ownership or investment interest in or compensation arrangement with; or (b) are an uncompensated director, trustee or officer of any entity that provides services or products for the Corporation or contracts with the Corporation, please complete page 2.

  • III.                    INDIRECT AFFILIATIONS

If any Family Member (a) has an ownership or investment interest in or compensation arrangement with; or (b) serves as an uncompensated director, trustee or officer of, any entity that provides services or products to the Corporation, contracts with the Corporation or competes with it, please complete page 3.

DIRECT AFFILIATIONS

(a) Name of Entity

(a) Name of Entity

(b) How long have you been associated with this entity?

(b) How long have you been associated with this entity?

(c) What is the nature of your relationship with the entity? (include ownership interests through a business and investment interests, including debt and equity interests)

(c) What is the nature of your relationship with the entity? (include ownership interests through a business and investment interests, including debt and equity interests)

(d) Have you served as an officer, director, or trustee of this entity? 

      If yes, when and what position?

(d) Have you served as an officer, director, or trustee of this entity? 

      If yes, when and what position?

(e) In what capacity will you be serving for the next 12 months?

(e) In what capacity will you be serving for the next 12 months?

(f)  What is the annual dollar volume, if any, between the Corporation (and its affiliates) and this entity?

(f)  What is the annual dollar volume, if any, between the Corporation (and its affiliates) and this entity?


INDIRECT AFFILIATIONS

(a) Name of Entity

(a) Name of Entity

(b) Name of family member associated with this entity:

(b) Name of family member associated with this entity:

(c) How long has this family member been associated with this entity?

(c) How long has this family member been associated with this entity?

(d) What is the nature of your family member’s relationship with the entity? (include ownership interests through a business and investment interests, including debt and equity interests)

(d) What is the nature of your family member’s relationship with the entity? (include ownership interests through a business and investment interests, including debt and equity interests)

(e) Has your family member served as an officer, director, or trustee of this entity? 

      If yes, when and what position?

(e) Has your family member served as an officer, director, or trustee of this entity? 

      If yes, when and what position?

(f)  In what capacity will your family member be serving for the next 12 months?

(f)  In what capacity will your family member be serving for the next 12 months?

(g) What is the annual dollar volume, if any, between the Corporation (and its affiliates) and this entity?


(g) What is the annual dollar volume, if any, between the Corporation (and its affiliates) and this entity?





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