To define conflicts of interest and to establish rules governing a Director's conduct when conflicts of interest exist or are claimed to exist.
A conflict of interest exists when a Director or a member of his immediate family has a personal financial interest in an entity to whom a contract or other thing of value may be awarded or given on the basis of a decision by the Board or when the matter or proceeding involves any person who is, or has been, an employer, employee, client, patient or other business associate of the Board member within one (1) year immediately preceding the date of the matter or proceeding and the matter or proceeding is directly related to the Board member's representation of that employer, employee, client, patient or other business associate of the Board member. A conflict of interest also exists when the issue to be decided by a vote of the Board may have a direct non-monetary impact, adverse or beneficial, on the Director or a member of his immediate family, of a nature and extent significantly different from the impact on other persons.
A Director having a conflict of interest shall disclose to the other Directors the nature of the conflict. He shall not engage in discussions or debate about the issue as to which a conflict of interest exists, nor shall he vote on any issue as to which a conflict exists.
If a Director asserts that another Director has a conflict of interest, he may request that the Director refrain from participating in discussions, debate, or vote on the issue as to which a conflict is claimed to exist. If the Director in question denies that a conflict of interest exists, the question of whether or not that Director may participate in discussions, debate or vote on the particular issue, a majority vote by the Board shall decide.
If a Director is deemed to have a conflict as described in B or C above, the Director will leave the room and not participate in the discussion and/or vote on that issue unless asked to remain by unanimous consent of the Board.
For the purpose of this policy, a Director's "immediate family" means a person who by blood or in law, including half, foster, step or adoptive kin is either a spouse, child, grandchild, parent, grandparent, brother or sister of the person in question or who on a fixed, long-term or non-temporary basis, shares living quarters with the director.
Annually, the Board shall sign a Conflict of interest Disclosure Statement which shall be reviewed by all Board members at the annual CEO/ Attorney/Board Review and maintained by the Local General Counsel.
Each Director and the Association Attorney are responsible for compliance with this policy.
To establish guidelines to be used by nominating committees in selecting the most qualified persons to nominate as candidates for election to the Board.
The policy set forth below shall be used when considering the qualifications of candidates for directorship. The nomination of a Director shall be made without discrimination as to race, color, religion, national origin, gender, age, veteran status, marital status, pregnancy, parenthood, disability or sexual orientation.
A. Bylaw Requirements
No person shall be eligible to become or remain a Director who:
Is not a member of the Cooperative by virtue of membership held in his name as a natural person receiving electric service at his residence in the district from which he is elected;
Does not have the legal capacity to enter into a binding contract or who is not physically or mentally able to discharge the duties of a Director;
Is in any way employed by or holds a material financial interest in any of the following:
A competing enterprise;
A business selling electric energy;
A business selling substantial amounts of energy or fuel products to the Cooperative;
A major vendor to the Cooperative, including but not limited to, professional consultants, electrical contractors, and businesses whose sales to the Cooperative represent more than 1/3 of its business;
Is employed or has been employed by the Cooperative or a subsidiary within the last 3 years;
Is employed by, materially affiliated with, or shares a material financial interest with, any other Director;
Is an officer or employee of a collective bargaining unit with which the Cooperative has a labor contract;
Is a close relative or a member of a household of a Director of the Cooperative or of a person described in (c), (d), (e), or (f) above;
Has been convicted of a felony and has not had his civil rights restored;
Had a criminal judgment entered against him based on fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, or insider trading;
Has not provided a criminal background check within 90 days of the election;
Has served on the Board for at least 2 ½ consecutive years, but who has failed to qualify for and obtain the National Rural Electric Cooperative Association (NRECA) Credentialed Cooperative Director (CCD) designation.
The person nominated:
Must be willing to attend regular and special meetings of the Board; national, state and other meetings of organizations with common interests that further the cooperative movement; and training institutes or seminars on subjects of current importance to the Association.
Should be aware that members of the Board serve without salary and on a fee basis only for attendance at meetings of the Board, meetings of the members and meetings and conferences specifically authorized by the Board. All reasonable expenses in connection with Board-authorized attendance at such meetings and conferences are reimbursable.
Shall not use, or cause to be used, his position as Director to further any political ambitions.
Shall not have been employed by the Association within the past 36 months.
Shall not have been found guilty of a felony offence within the last five years, shall not have had a judgment ordered against him or her in a civil claim based on fraud, theft, deceit, misrepresentation, civil conspiracy, breach of trust, breach of fiduciary duty, insider trading, failure to disclose materials facts or changes, or similar conduct, shall not be involved in any litigation against the Association, shall be in good standing with his or her account, shall not have been prohibited or otherwise removed as a Director of an organization, and if a member of a professional body, shall not have, during the previous five years, been involuntarily prohibited or restricted from practicing as a member of that body.
Must be willing to take the oath of office as specified in Policy 2.8.1.
Directors are individually, and collectively as a board, responsible for the fiduciary and legal implications of Board decisions.
Directors must avoid conflicts of interest, observe high standards of integrity and ethics, and maintain the confidentiality and security of Board deliberations.
Directors are expected to be diligent in preparing for and attending Board meetings, contribute positively to Board discussions and work in harmony with other board members.
Directors must disclose to the Association the nature and extent of any real or perceived interest that the Director has in a material contract or transaction, or a proposed material contract or transaction with the Association.
Directors shall be:
Individuals of good character.
Knowledgeable about the cooperative business model.
A ware of, and comfortable with, the legal liabilities implicit with Board service.
Able to add to the diversity of knowledge and skills of the Board, in areas such as: Board governance
Strategic leadership, planning and management
General business knowledge and skill
Marketing and communications
Administration and law
In addition, board members must demonstrate:
An ability to compromise and work collaboratively with others.
An ability to communicate effectively.
An ability to represent the entire membership
Good listening skills
Must be willing to expend the effort needed to understand the Association's issues and concerns and to provide the judgment needed to reach decisions in constantly changing circumstances.
Must be willing to support in his official capacity as a Board member all official decisions and actions made or taken by a majority of the Board.
Must be willing to study conscientiously the information contained in reports submitted to the Board.
Must be willing to contribute to the development of statements on functions and responsibilities of Directors and to work toward their constant improvement.
Must be able to consider and evaluate objectively the questions, issues and concerns with which the Association is faced.
Must remain informed about, alert to and aware of the ideals and objectives of the Association and to study and analyze the policies, plans, issues and concerns which result from efforts to achieve such ideals and objectives.
Must be informed about and responsive to the attitudes of the members and general public toward the Association's objectives and policies.
Must be able to inform interested persons about the Association's ideals, objectives, programs and services.
Must be able to qualify for and obtain a National Rural Electric Cooperative Association Credentialed Cooperative Director's Certification within two and one-half consecutive years of service as a Director.
It shall be the responsibility of the Board to appoint nominating committees as set out in Policy 2.6.1 for the districts that are up for election.
It shall be the responsibility of the Secretary of the Board or his designee to inform the nominating committees about the foregoing requirements and guidelines of candidates.