Conflicts of Interest Policy Certification
The Board of Trustees of the Los Angeles County Bar Association (”LACBA”) adopted a conflicts of interest policy on January 24, 2007 for its Officers and Board of Trustees. This policy is amended to also apply to the members of the Audit Committee, the Finance Committee, and any other standing committee having a charge and duties that include fiduciary obligations to LACBA (“Board Standing Committees” or “BSC”).
Conflicts of Interest Policy.
1. Duty to LACBA; Persons Covered by this Policy. LACBA Officers, Trustees and BSC members (the “LACBA fiduciaries”) have fiduciary obligations to LACBA in connection with their service in their respective capacities. At all times, the LACBA fiduciaries shall act in a manner consistent with these obligations, and shall exercise particular care that no detriment to the interests of LACBA (or appearance of such detriment) may result from a conflict (or appearance of such conflict) between LACBA’s interests and the direct or indirect personal interests of such individual fiduciaries.
2. Prohibition on Interested Transactions; Recusal from Interested Transaction Decisions.Without limiting the generality of the foregoing, no LACBA fiduciary shall, except as may be approved in an action by a majority vote of the disinterested members of the Board of Trustees after full disclosure of all material facts:
(a) enter into any transaction or other arrangements with LACBA in which such fiduciary (or, to the knowledge of such fiduciary, an immediate family member or affiliate of such fiduciary) has, directly or indirectly, a material financial interest; or
(b) be present during deliberations or voting by the Board of Trustees or any BSC regarding any decision or other action by the Board of Trustees or any BSC concerning a matter in which such fiduciary’s material personal interests (or, to the knowledge of such fiduciary, the material interests of an immediate family member or affiliate of such fiduciary) may be affected, provided, that the foregoing shall not prohibit such fiduciary from providing information to the Board of Trustees or any BSC concerning such matter (including such fiduciary’s direct or indirect interests therein).
The transactions or matters described in the preceding sentence are referred to herein as “Interested Transactions”, and include without limitation employment, consulting and other arrangements relating to compensation for services to LACBA. For purposes of this policy, an “immediate family member” means a fiduciary’s spouse, domestic partner, child, sibling and parent, and any sibling or parent of the fiduciary’s spouse or domestic partner. For purposes of this policy, an “affiliate” of a fiduciary means: (a) such fiduciary’s principal employer or the equivalent thereof (including a law firm at which such fiduciary practices law, whether as partner, of-counsel, associate or in another capacity) other than LACBA itself; and (b) any other entity with respect to which such fiduciary possesses, directly or indirectly, of the power (i) to vote ten percent (10%) or more of the securities or other equity ownership interests having ordinary voting power for the election of the members of the board of directors or comparable governing body of such entity, or (ii) to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities or by contract or otherwise.
3. Disclosure of Actual or Potential Conflicts. Each fiduciary shall promptly disclose to LACBA’s Executive Director (or, in the case of a disclosure by the Executive Director, to LACBA’s Counsel) and President (or, in the case of a disclosure by the President, to LACBA's President-Elect), in writing, the existence of any actual or potential conflict of interest involving such fiduciary when such conflict arises (or, in the case of a potential conflict, when such fiduciary knows or should know of such potential conflict).
4. Areas of Possible Conflicts. Conflicts of interest can arise in many situations, including those in which:(a) LACBA considers or enters into a transaction or other arrangements in which a fiduciary (or an immediate family member or affiliate of such fiduciary) has, directly or indirectly, a material financial interest; (b) a fiduciary has an opportunity to influence LACBA’s decisions (including by voting or participating in discussions as a member of the Board of Trustees or any BSC) regarding business or policy matters in ways that could benefit the fiduciary’s personal financial interests (or the financial interest of an immediate family member or affiliate of such fiduciary); or (c) a fiduciary knowingly has a duty to or other relationship (including an attorney-client relationship) with another person or entity which might impair (or might reasonably be seen to impair) such fiduciary’s ability to exercise independent judgment and to act in the best interests of LACBA in a matter.
5. Interests and Relationships Not Deemed to be Conflicts. Notwithstanding anything in this policy to the contrary, the following will not, without more, be deemed to give rise to a conflict of interest pursuant to this policy:(a) interests shared by members of LACBA generally (such as a fiduciary’s general interests as a California attorney), or by any significant segment thereof (such as a fiduciary’s interests as a specialist in a particular area of law practice); (b) the fact that a fiduciary is also a director, manager, officer or member of another not-for-profit professional organization which competes (or may compete) with LACBA for members, program attendees, funding or in other respects; or (c) the fact that an Officer or Trustee is directly or indirectly the owner of not more than one percent (1%) of the outstanding voting equity interests in a publicly traded entity that is or is proposed to be a party to any transaction or other arrangement with LACBA. Nothing in this Paragraph 5 is intended to be in derogation of any fiduciary or other duty owed to LACBA by any LACBA fiduciary.
6. Violations of this Policy.If a fiduciary violates this policy, the Board of Trustees, acting by a majority vote of the disinterested members thereof, shall take appropriate actions to protect LACBA’s best interests.
7. Determinations Under this Policy.The Board of Trustees shall have the ultimate authority with respect to the interpretation, application and enforcement of this policy.The Board of Trustees shall, acting by a majority vote of the disinterested members thereof, make all determinations under this policy, including (i) whether to approve, subject to the requirements of applicable law, any transaction or arrangement otherwise prohibited by Paragraph 2(a) hereof, (ii) whether an actual or potential conflict exists in particular circumstances, (iii) whether a fiduciary has violated this policy, and (iv) what disciplinary, remedial or other actions are appropriate in connection with any such a conflict or violation. Notwithstanding anything to the contrary in this Paragraph 7, there shall be no exceptions made to the general obligations referenced in Paragraph 1 of this policy, or to the specific recusals required by Paragraph 2(b) of this policy.
8. Relationship to Applicable Law and Other LACBA Conflicts of Interest Policies.
(a) The duties of the LACBA fiduciaries set forth herein shall be in addition to, and not in derogation of, the duties of the fiduciaries pursuant to applicable law.Without limiting the foregoing, each Officer and Trustee acknowledges and agrees that Section 7233 of the California Corporations Code, a copy of which in its current form is attached as Exhibit A hereto, shall continue to apply pursuant to its terms as in effect from time to time (including any successor provision thereto) to any contracts and transactions of LACBA described therein.
9. Distribution of, and Certifications under, this Conflict of Interest Policy.All LACBA fiduciaries shall receive a copy of this policy.Upon election or appointment (and upon re-election or re-appointment), and at least once annually thereafter, each fiduciary shall sign a statement, in a form approved by the Board of Trustees, certifying that the person received a copy of this policy, has read and understands the policy, and agrees to comply with this policy.
10. List of Material LACBA Payees and Payors.LACBA’s Executive Director shall compile, and include as an Exhibit B to the statements signed by LACBA fiduciaries pursuant to Paragraph 9 of this policy, a then-current list of material LACBA non-employee payees (e.g., contractors, vendors and other who provide goods or services to LACBA in exchange for cash or non-cash payments from LACBA) and payors (e.g., advertisers, sponsors and others who acquire goods or services, other than as LACBA employees, from LACBA in exchange for cash or non-cash payments to LACBA).Such Exhibit B shall also indicate, in brief summary, the general nature of LACBA’s relationship with each such payee and payor listed thereon.LACBA’s Executive Director shall update such Exhibit B from time to time (whether or not such statements are then being signed by fiduciaries), as appropriate, to add new material LACBA non-employee payees or payors or delete LACBA payees or payors that are no longer material.Any such amendment shall be effected by the provision by LACBA’s Executive Director to each fiduciary of a new version of Exhibit B with a reference to this Paragraph 10 of the Conflicts of Interest Policy in the communication making such transmission.
LOS ANGELES COUNTY BAR ASSOCIATION
CONFLICTS OF INTEREST POLICY CERTIFICATION
I, ______________________________, in my capacity as an officer and/or trustee and/or Board Standing Committee member (“fiduciary”) of LACBA, affirm that I have (i) read and understand the foregoing Conflicts of Interest Policy, (ii) agree to comply fully with its terms at all times during my service as a fiduciary of LACBA, and (iii) have reviewed the list of material LACBA payees and payors attached as Exhibit B hereto, as amended from time to time in accordance with the provisions of the foregoing Conflicts of Interest Policy, and have promptly disclosed, as required by the foregoing Conflicts of Interest policy, any relationships that give rise to an actual or potential conflict of interest I or my immediate family members or affiliates have with any such payee or payor, or with any LACBA employee.
Print/Type Name: _____________________________________
Section 7233 of the California Corporations Code
7233. (a) No contract or other transaction between a corporation and one or more of its directors, or between a corporation and any domestic or foreign corporation, firm or association in which one or more of its directors has a material financial interest, is either void or voidable because such director or directors or such other corporation, business corporation, firm or association are parties or because such director or directors are present at the meeting of the board or a committee thereof which authorizes, approves or ratifies the contract or transaction, if:
The material facts as to the transaction and as to such director's interest are fully disclosed or known to the members and such contract or transaction is approved by the members (Section 5034) in good faith, with any membership owned by any interested director not being entitled to vote thereon;
The material facts as to the transaction and as to such director's interest are fully disclosed or known to the board or committee, and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it is authorized, approved or ratified; or
As to contracts or transactions not approved as provided in paragraph (1) or (2) of this subdivision, the person asserting the validity of the contract or transaction sustains the burden of proving that the contract or transaction was just and reasonable as to the corporation at the time it was authorized, approved or ratified. A mere common directorship does not constitute a material financial interest within the meaning of this subdivision. A director is not interested within the meaning of this subdivision in a resolution fixing the compensation of another director as a director, officer or employee of the corporation, notwithstanding the fact that the first director is also receiving compensation from the corporation.
(b) No contract or other transaction between a corporation and any corporation, business corporation or association of which one or more of its directors are directors is either void or voidable because such director or directors are present at the meeting of the board or a committee thereof which authorizes, approves or ratifies the contract or transaction, if:
(1) The material facts as to the transaction and as to such director's other directorship are fully disclosed or known to the board or committee, and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the common director or directors or the contract or transaction is approved by the members (Section 5034) in good faith; or (2) As to contracts or transactions not approved as provided in paragraph (1) of this subdivision, the contract or transaction is just and reasonable as to the corporation at the time it is authorized, approved or ratified.
This subdivision does not apply to contracts or transactions covered by subdivision (a).
Material LACBA AND LACBA Non-employee Payees and Payors
[SEE ATTACHED DOCUMENT]
Amended by the Board of Trustees August 22, 2012