IV.G. Business Conduct Policies
- 1 1. PRACTICE OF ETHICAL BEHAVIOR
- 2 2. COMPLIANCE WITH LAWS, REGULATIONS, AND ORGANIZATION POLICIES
- 3 3. CONFLICTS OF INTEREST
- 4 4. DISCIPLINARY ACTION FOR VIOLATIONS OF CONFLICT OF INTEREST POLICY AND BUSINESS CONDUCT GUIDELINES
- 5 5. POLICY ON SUSPECTED MISCONDUCT
- 6 6. WHISTLEBLOWER PROTECTION
- 7 7. PROTECTION OF RECORDS - FEDERAL MATTERS
1. PRACTICE OF ETHICAL BEHAVIOR
The ethical guidelines in this section apply to employees, house-level management, the board of directors, and executive officers at the BSC. Due to the unique position of house-level management residing and conducting business in the same place, this policy only applies during BSC business activity.
Unethical actions, or the appearance of unethical actions, are not acceptable under any conditions. The policies and reputation of the BSC depend to a very large extent on the following considerations:
- A. Each individual guided by this policy must apply her/his own sense of personal ethics, which should include compliance with applicable laws and regulations in business situations. Applying personal ethics helps to govern behavior where no existing regulation provides a guideline.
- B. Each individual guided by this policy is responsible for applying common sense and cooperative values in business decisions where specific rules do not provide all the answers.
- C. In determining compliance with this standard in specific situations, individuals guided by this policy should ask themselves the following questions:
- 1. Does my action comply with BSC policy and guidelines?
- 2. Is my action legal?
- 3. Is my action ethical?
- 4. Is my action consistent with the The Cooperative (Rochdale) Principles?
- 5. Am I sure my action does not appear inappropriate?
- 6. Would I feel comfortable defending my actions publicly or in front of a review board for ethics, or am I sure that I would not feel embarrassed or compromised if my action became known within the BSC or publicly?
- 7. Am I sure that my action meets my personal code of ethics and behavior?
- D. Each individual guided by this policy should be able to answer "yes" to all of these questions before taking action.
- E. Each individual guided by this policy is responsible for the ethical business behavior of her/his subordinates as long there is evidence that the individual is aware of her/his subordinates behavior. Directors, executive officers, managers and supervisors must carefully weigh all courses of action suggested in ethical, as well as economic terms, and base their final decisions on the guidelines provided by this ethics of business conduct policy, the BSC organizational policies, as well as their personal sense of right and wrong.
2. COMPLIANCE WITH LAWS, REGULATIONS, AND ORGANIZATION POLICIES
- A. The willful violation of any Federal, state, local law by the individual guided by this policy during the course of the individual's involvement with the BSC;
- B. The disregard or circumvention of BSC policy or engagement in unscrupulous dealings.
Individuals guided by this policy should not attempt to accomplish by indirect means, through agents or intermediaries, that which is a direct violation of the law, the ethics of business conduct policy, or the organization’s policies.
3. CONFLICTS OF INTEREST
The ethical guidelines in this section apply to employees, the board of directors, and executive officers at the BSC. Volunteers such as house-level managers and officers are encouraged to use these guidelines to determine conflicts of interest matters in their business or governance activities.
- A. Introduction: In the course of conducting the day-to-day operations of the BSC situations may arise in which a BSC decision-maker has a conflict of interest, or in which the process of making a decision may create an appearance of a conflict of interest.
- B. BSC employees, directors, and executive officers have an obligation to:
- 1. Avoid conflicts of interest, or the appearance of conflicts, between their personal interests and those of the BSC in dealing with outside entities or individuals,
- 2. Disclose real and apparent conflicts of interest to the individual or group making decision (see Disclosure Requirements), and
- 3. Refrain from participation in any decisions on matters that involve a real conflict of interest or the appearance of a conflict.
- C. What Constitutes a Conflict of Interest?
- BSC employees, the board of directors, and executive officers owe a duty of loyalty to the organization and its mission. This duty necessitates that in serving the BSC they act solely in the interests of the organization and its mission and not in their personal interests or in the interests of others.
- D. In the policy and guidelines for conflict of interest, BSC shall hereinafter define “interested persons” as members of the board of directors, executive officers, and employees, as well as persons with the following relationships to directors, officers, or employees:
- 1. Spouses, legal domestic partners, co-habiting partners
- 2. Siblings, children of, grandchildren of, great- grandchildren of
- 3. Spouses, legal domestic partners, co-habiting partners of individuals listed in 2
- 4. Corporations, partnerships, LLCs, and other forms of businesses in which an employee, director, or executive officer either individually or in combination with individuals listed in 1, 2, or 3, collectively possess any ownership or beneficial interest
- E. Conflicts of interest arise when the interests of an interested party may be seen as competing with those of the organization and its mission. Conflicts of interest may be financial (where an interested party benefits financially directly or indirectly) or nonfinancial (e.g. seeking preferential treatment, using confidential information).
- F. Examples of conflicts of interest include, but are not limited to, situations in which an executive officer, director or employee:
- 1. Negotiates or approves a contract, purchase, or lease on behalf of the organization and has a direct or indirect interest in, or receives personal benefit from, the entity or individual providing the goods or services;
- 2. Negotiates or approves a contract, sale, or lease on behalf of the organization and has a direct or indirect interest in, or receives personal benefit from, the entity or individual receiving the goods or services;
- 3. Employs or approves the employment of, or supervises a person who is an immediate family member of the director or employee;
- 4. Sells products or services in competition with the organization;
- 5. Uses the organization’s facilities, other assets, employees, or other resources for personal gain;
- 6. Receives a substantial gift from a vendor (greater than $50), if the director or employee is responsible for initiating or approving purchases from that vendor.
- G. Disclosure Requirements:
- A director, executive officer, or employee who believes that he/she may be perceived as having a conflict of interest in a discussion or decision must disclose that conflict to the group making the decision. Most concerns about conflicts of interest may be resolved and appropriately addressed through prompt and complete disclosure to the group or body of individuals making the decision.
- H. Therefore, BSC requires the following:
- 1. On an annual basis, all members of the Board of Directors, the Executive Director, the President, the Vice Presidents, members of senior management, and employees with purchasing, contracting and/or hiring responsibilities or authority shall inform, in writing, the Executive Director and the President, of all reportable conflicts or confirm that there are no conflicts to report
- 2. Prior to the preparation of the disclosure statements, the accounting department shall distribute a list of all vendors with whom the organization has transacted business at any time during the preceding year, along with a copy of the disclosure statement;
- 3. The Executive Director shall review all forms completed by employees, and the Cabinet shall review all forms completed by directors, the President, the Vice Presidents, and the Executive Director, and determine appropriate resolution in accordance with the next section of this policy;
- 4. If a conflict arises during the year, the employee, officer or board member will immediately notify the Executive Director or the Cabinet who will determine appropriate resolution.
- I. Resolution of Conflicts of Interest:
- All real or apparent conflicts of interest shall be disclosed to the Cabinet and the Executive Director of the organization. Conflicts shall be resolved as follows:
- 1. The Audit Committee shall be responsible for making all decisions concerning resolutions of conflicts
- involving directors, President, the Vice Presidents, the Executive Director, and other members of senior management.
- 2. The President shall be responsible for making decisions concerning resolutions of the conflict involving the chair of the Audit Committee.
- 3. The Executive Director shall be responsible for making all decisions concerning resolutions of conflicts involving employees, subject to the approval of the Cabinet.
- An employee, executive officer or director may appeal the decision that a conflict (or appearance of conflict) exists as follows:
- 1. An appeal must be directed to the President, or in the case of an appeal by the President, the appeal must be directed to the Vice President of Internal Affairs.
- 2. Appeals must be made within 30 days of the initial determination.
- 3. Resolution of the appeal shall be made by vote of the full Board of Directors.
- 4. Board members who are the subject of the appeal, or who have a conflict of interest with respect to the subject of the appeal, shall abstain from participating in, discussing, or voting on the resolution, unless their discussion is requested by the remaining members of the board.
4. DISCIPLINARY ACTION FOR VIOLATIONS OF CONFLICT OF INTEREST POLICY AND BUSINESS CONDUCT GUIDELINES
Failure to comply with the standards contained the above policy and guidelines will result in disciplinary action that may include termination, referral for criminal prosecution, and reimbursement to the organization or to the government for any loss or damage resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any employees, executive officers and directors of the BSC (and in some cases, house-level management) charged with a violation of this policy will be afforded an opportunity to explain her/his actions and be heard by a appropriate review committee, before disciplinary action is taken.
Disciplinary action will be taken:
- A. Against any applicable individual who authorizes or participates directly in actions that are a violation of this policy.
- B. Against any applicable individual who has deliberately failed to report a violation or deliberately withheld relevant and material information concerning a violation of this policy.
- C. Against any director, executive officer, manager or supervisor who attempts to retaliate, directly or indirectly, or
encourages others to do so, against any employee who reports a violation of this policy. A board member who violates this policy will be subject to removal by a vote of the board of directors.
5. POLICY ON SUSPECTED MISCONDUCT
Introduction: This policy communicates the actions to be taken for suspected misconduct committed, encountered, or observed by employees, directors, executive officers, and members.
- A. Like all organizations, BSC faces many risks associated with fraud, abuse, and other forms of misconduct. The impact of these acts, collectively referred to as misconduct throughout this policy, may include, but not be limited to:
- 1. Deterioration or compromising of The Cooperative (Rochdale) Principles and/or ethics
- 2. Financial losses and liabilities
- 3. Loss of current and future revenue and customers
- 4. Negative publicity and damage to the BSC’s good public image
- 5. Loss of employees and difficulty in attracting new personnel
- 6. Deterioration of employee morale
- 7. Harm to relationships with clients, vendors, bankers, and subcontractors
- 8. Litigation and related costs of investigations, etc.
The BSC is committed to establishing and maintaining a work environment of the highest ethical standards. Achievement of this goal requires the cooperation and assistance of every employee and member at all levels of the BSC.
- B. Definitions: For purposes of this policy, misconduct includes, but is not limited to:
- 1. Actions that violate the BSC’s Business Conduct policy (and any underlying policies), Conflict of Interest policy or any of the accounting and financial policies adopted by the BSC.
- 2. Fraud (see below)
- 3. Forgery or alteration of checks, bank drafts, documents or other records (including electronic records)
- 4. Destruction, alteration, mutilation, or concealment of any document or record with the intent to obstruct or influence an investigation, or potential investigation, carried out by a department or agency of the Federal government or by the Organization in connection with this policy
- a) Applicable to board decisions, or potential board decisions, as well as investigations.
- 5. Disclosure to any external party of proprietary information or confidential personal information obtained in connection with employment with or service to the BSC
- 6. Unauthorized personal or other inappropriate (non-business) use of equipment, assets, services, personnel or other resources
- 8. Acts that violate Federal, state, or local laws or regulations
- 9. Accepting or seeking anything of material value from contractors, vendors, or persons providing goods or services to BSC. Exception: gifts less than a nominal value of $50.
- 10. Impropriety of the handling or reporting of money in financial transactions.
- 11. Failure to report known instances of misconduct in accordance with the reporting responsibilities described herein (including tolerance by supervisory employees of misconduct of subordinates).
- C. Fraud is further defined to include, but not be limited to:
- 1. Theft, embezzlement, or other misappropriation of assets (including assets of or intended for the Organization, as well as those of the members, subcontractors, vendors, contractors, suppliers, and others with whom the Organization has a business relationship)
- 2. Intentional misstatements in the Organization’s records, including intentional misstatements of accounting records or financial statements
- 3. Authorizing or receiving payment for goods not received or services not performed
- 4. Authorizing or receiving payments for hours not worked
- 5. Forgery or alteration of documents, including but not limited to checks, timesheets, contracts, purchase orders, receiving reports, and policy.
BSC prohibits each of the preceding acts of misconduct on the part of employees, officers, executives, volunteers and others responsible for carrying out the Organization’s activities.
- D. Reporting Responsibilities:
- Every employee, director, executive officer, and volunteer is responsible for immediately reporting suspected misconduct to their supervisor, the President, the Vice President of Financial Affairs, or the Vice President of Internal Affairs. When supervisors have received a report of suspected misconduct, they must immediately report such acts to their manager, the President, the Vice President of Financial Affairs, or the Vice President of Internal Affairs.
At the house level, suspected misconduct may be reported to house councils, in which case the house president must report on how the house is addressing it to the President, the Vice President of Financial Affairs, or the Vice President of Internal Affairs.
6. WHISTLEBLOWER PROTECTION
We ask you to execute your role in the operations and policy-making of the BSC with attention to every detail–especially the ethical implications of your own and your work group’s actions. If you think something is unethical, please report it. We commit to you that the BSC will support the courage of people who point out existing or potential ethical problems, and that we will not tolerate retaliation against people who raise legitimate ethical concerns
The BSC will consider any reprisal against a reporting individual an act of misconduct subject to disciplinary procedures. A “reporting individual” is one who, in good faith, reported a suspected act of misconduct in accordance with this policy, or provided to a law enforcement officer any truthful information relating to the commission or possible commission of a Federal offense or any other possible violation of the BSC’s policies.
- A. Investigative Responsibilities:
- 1. Due to the sensitive nature of suspected misconduct, supervisors and managers should not take it upon themselves to perform any investigative procedures.
- 2. The Executive Director is given the responsibility for investigating suspected misconduct involving employees below the Executive Director. The Executive Director shall provide summaries of all investigative work to Cabinet.
- 3. The Cabinet has the primary responsibility for investigating suspected misconduct involving the Executive Director, as well as board members and executive officers.
- 4. Investigation into suspected misconduct will be performed without regard to the suspected individual’s position, length of service, or relationship with the BSC.
- 5. In fulfilling its investigative responsibilities, Cabinet shall have the authority to seek the advice and/or contract for the services of outside firms, including but not limited to law firms, CPA firms, forensic accountants and investigators, etc.
- 6. Members of the investigative team, as authorized by the Cabinet and in compliance with federal, state, and local laws and regulations, shall have free and unrestricted access to all BSC records and premises, whether owned or rented, at all times. They shall also have the authority to examine, copy and remove all or any portion of the contents (in paper or electronic form) of filing cabinets, storage facilities, desks, credenzas and computers without prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of an investigation into suspected misconduct or related follow-up procedures.
- 7. The existence, the status or results of investigations into suspected misconduct shall not be disclosed or discussed with any individual other than those with a legitimate need to know in order to perform their duties and fulfill their responsibilities effectively.
7. PROTECTION OF RECORDS - FEDERAL MATTERS
BSC prohibits the knowing destruction, alteration, mutilation, or concealment of any record, document, or tangible object with the intent to obstruct or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States government, or in relation to or contemplation of any such matter or case.
Violations of this policy will be subject to the investigative, reporting, and disclosure procedures described earlier in this Policy on Suspected Misconduct.
- A. Disciplinary Action:
- Based on the results of investigations into allegations of misconduct, disciplinary action may be taken against violators. Disciplinary action shall be coordinated with input from the relevant staff. The seriousness of misconduct will be considered in determining appropriate disciplinary action, which may include:
- 1. Reprimand
- 2. Probation
- 3. Suspension
- 4. Demotion
- 5. Termination
- 6. Reimbursement of losses or damages
- 7. Referral for criminal prosecution or civil action
This listing of possible disciplinary actions is for information purposes only and does not bind the BSC to follow any particular policy or procedure, except that employees who are members of the Employee Association are entitled to the procedural protections set forth in the BSC’s contract with the Employee Association.
- B. Confidentiality:
- 1. The Cabinet and the Executive Director shall treat all information received confidentially. Any employee, director, executive officer, or volunteer who suspects dishonest or fraudulent activity will notify the Executive Director or the President immediately, and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act (see Reporting Procedures section above).
- 2. Great care must be taken in the investigation of suspected improprieties or irregularities so as to avoid mistaken accusations or alerting suspected individuals that an investigation is under way. Investigation results will not be disclosed or discussed with anyone other than those who have a legitimate need to know. This is important in order to avoid damaging the reputations of persons suspected but subsequently found innocent of wrongful conduct and to protect BSC from potential civil liability.
- 3. A reporting individual who discovers or suspects fraudulent activity may remain anonymous. All inquiries concerning the activity under investigation from the suspected individual(s), his or her attorney or representative(s), or any other inquirer should be directed to the Cabinet or legal counsel. No information concerning the status of an investigation will be given out. The proper response to any inquiry is “I am not at liberty to discuss this matter.” Under no circumstances should any reference be made to “the allegation,” “the crime,” “the fraud,” “the forgery,” “the misappropriation,” or any other specific reference.
- 4. The reporting individual should be informed of the following:
- a. Do not contact the suspected individual in an effort to determine facts or demand restitution.
- b. Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by the BSC’s legal counsel or Cabinet.
- 5. Disclosure to Outside Parties
- 6. Allegations of and information related to allegations of suspected misconduct shall not be disclosed to third parties except under the provisions described in this policy (such as disclosure to outside investigators hired by the BSC to aid in an investigation).
- 7. However, all known frauds involving the Executive Director, senior management, or members of the Board of Directors, as well as all material frauds involving employees below the senior management level, shall be disclosed by the Cabinet to the BSC’s external auditors.