One of the weaknesses in churches, according the Evangelical Council for Financial Accountability (ECFA) is the lack of a Conflict of Interest (COI) policy governing church board members. For at least the last four years our auditing firm has raised the deficiency to our board in their auditor’s management notes and every year we agreed that we should do something about it.
I’m happy to report that we’ve finally done it! As of our last board meeting in November, we had all board members sign a COI policy, divulging any potential conflicts of interests and agreeing to a set of standards designed to protect Fairhaven from any conflicts of interest.
We have also extended that COI policy to include staff members who are involved in financial decision-making, which for us would include specialists, directors and pastors. They too have signed a COI policy, divulging any potential conflicts of interests and agreeing to the same set of standards. Everyone received it well and understood the need to create such safeguards as the church grows and the need for financial transparency becomes even more critical. Our constituent donors are savvy people who know that an organization that manages more than $5 million in funds requires the highest possible standard of financial management.
Some time ago, our Mayor, who owns a printing business, was taken to task on the front page of the local newspaper for contracting print jobs for a high-end retail development while contributing in his position as Mayor to discussions and decisions pertaining to the same development. Similar conflicts of interest can easily happen in the church when a staff member uses his cousin to screen print T-shirts for the youth group, or a board member who manages investments for some staff members is party to decisions involving retirement benefits for staff. Those things create conflicts which need to be understood and managed with transparency.
A Conflict of Interest policy will not guarantee that problems won’t arise, but it will provide some boundaries which, if followed, will help protect the church from losing one of its most precious assets: trust.
Paul Clark is executive pastor of operations for Fairhaven Church, Centerville, OH. [www.fairhavenchurch.org ]