CONFLICT OF INTEREST POLICY
STEM GENERATION INC. D/B/A SCIENCE FAIR FUN
The purpose of this Conflict of Interest Policy (this “Policy”) is to protect the interests of STEM Generation Inc. d/b/a Science Fair Fun (the “Organization”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or a member of the Organization’s Board of Directors (the “Board”) or might result in a possible excess benefit transaction. This Policy is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit and charitable organizations.
1. Interested Person
Any director or officer, who has a direct or indirect financial interest, as defined below, is an interested person.
2. Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
a. An ownership or investment interest in any entity with which the Organization has a transaction or arrangement;
b. A compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement; or
c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are substantial in nature.
A financial interest is not necessarily a conflict of interest. Under Article III, Section 2 of this Policy, a person who has a financial interest may have a conflict of interest only if the Board, or committee of the Board to which the Board has delegated such powers, decides that a conflict of interest exists.
1. Duty to Disclose
In connection with any actual or possible conflict of interest, an interested person or other person with an actual or potential conflict of interest must disclose the existence of such actual or potential conflict of interest (including any financial interest) and must be given the opportunity to disclose all material facts to the Board or members of committees with Board-delegated powers considering the proposed transaction, arrangement or other conflict of interest. In addition to a financial interest, a conflict of interest may include any unauthorized use of any confidential or proprietary information belonging to the Organization, especially where such use results in personal gain to the interested person.
2. Determining Whether a Conflict of Interest Exists
After disclosure of the actual or potential conflict of interest and all material facts, and after any discussion with the interested person or other person with an actual or potential conflict of interest, he or she shall leave the Board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining Board or committee members shall decide if a conflict of interest exists.
3. Procedures for Addressing the Conflict of Interest
a. An interested person may make a presentation at the Board or committee meeting, but, after the presentation, he or she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.
b. The chairperson of the Board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
c. After exercising due diligence, the Board or committee shall determine whether the Organization can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
d. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Organization’s best interest, for its own benefit, and whether the transaction or arrangement is fair and reasonable to the Organization. In conformity with the above determination, the Board or committee shall make its decision as to whether the Organization shall enter into the transaction or arrangement.
4. Violations of the Conflict of Interest Policy
a. If the Board or committee has reasonable cause to believe that an interested person or other person with an actual or possible conflict of interest has failed to disclose such actual or possible conflict of interest, it shall inform such person of the basis for such belief and afford him or her an opportunity to explain the alleged failure to disclose.
b. If, after hearing the response of the person and after making such further investigation as may be warranted by the circumstances, the Board or committee determines that the person has in fact failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
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 financial 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 connection with the proceedings.
a. A voting member of the Board who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that Board member’s compensation.
b. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.
c. No voting member of the Board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization, either individually or collectively, is prohibited from providing information to any committee regarding compensation. Such Board or committee member may present information as background or answer questions at a Board or committee meeting prior to the commencement of deliberations or voting relating to his or her compensation.
Each director and officer shall sign a statement prior to his or her initial election or employment and annually thereafter, which affirms that such person:
a. Has received a copy of this Policy;
b. Has read and understands this Policy;
c. Has agreed to comply with this Policy; and
d. Understands the Organization is a nonprofit organization and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Annual Disclosure Statements
Each director and officer shall sign and submit a statement prior to his or her initial election or appointment and annually thereafter, which discloses in writing, among other things (the “Disclosure Statement”):
a. Any entity of which such person or a relative of such person is an officer, director, trustee, member, owner (either as a sole proprietor or a partner), or employee and with which the Organization has a relationship;
b. Any financial interest such person or a relative of such person may have in any corporation, organization, partnership, or other entity which provides goods or services to the Organization for a fee or other compensation;
c. Any position or other material relationship such person or a relative of such person may have with any non-profit entity with which the Organization has a business relationship; and
d. Any transaction or potential transaction in which the Organization is or would be a participant and in which such person or a relative of such person might have a conflicting interest.
A copy of each completed Disclosure Statement shall be kept in the Organization’s files and made available to any director or officer.
If at any time during his or her term of service, a director or officer acquires any financial interest, or when any matter for decision or approval comes before the Board in which an interested party has a financial interest, that financial interest or potential interested party transaction must be promptly disclosed in writing to each member of the Board, or an authorized committee thereof, together with all material facts. Failure to disclose to the Board, or an authorized committee thereof, a known financial interest, a known interested party transaction, or a known conflict of interest may be grounds for removal from the Board or termination from the Organization.
To ensure the Organization operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews may be conducted. The periodic reviews may include the following subjects:
a. Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm’s length bargaining.
b. Whether partnerships, joint ventures, and arrangements with management organizations conform to the Organization’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further the charitable purposes and do not result in inurement, impermissible private benefit or an excess benefit transaction.
Use of Outside Experts
In complying with this Policy, the Organization may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the Board of its responsibilities under this Policy.
Company: STEM Generation, Inc. d/b/a Science Fair Fun
Signed by: Wendy Wempe, Executive Director, STEM Generation