Integrity, Conflict of Interest, Disclosure and Certification Policy for 2014 C.A.R. Directors and Committee Members

Policy Statement

The following presents the Integrity, Conflict of Interest , Disclosure and Certification Policy for all C.A.R. Directors and Committee members. Please read it and certify as instructed.

OVERVIEW.

Thank you for agreeing to serve as a C.A.R. Director or Committee member! We assume that you have accepted these positions with the intention of serving California REALTORS® to the best of your ability and we appreciate your time and service. Since membership in C.A.R. is voluntary, maintaining good will and the reputation of C.A.R. is of utmost importance, as are the legal duties of Directors and Committee members. Of course, C.A.R. Directors and Committee members must honor their fiduciary duties and adhere to appropriate conflict of interest and disclosure rules. As REALTORS®, we operate under a Code of Ethics, and the conduct of our Board of Directors and Committee members must similarly be not only compliant with good corporate governance, but avoid even the appearance of impropriety. Because Directors and Committee members are involved in so many policy, business and other activities, potential conflicts are not always intuitive. This policy clarifies the expectations of disclosure, abstaining from voting, handling of non-public information, and in some cases, removing oneself from the room during discussions.

POLICY COMPONENTS. The policy has five components:

1. Integrity Policy
2. Disclosure of Ownership and Business Interests
3. Disclosure of Policy/Organization Affiliations
4. Conflicts of Interest Requiring Abstention or Exclusion
5. Certification of Compliance and Written Disclosures

INTEGRITY.

Members serving as C.A.R. Officers, Liaisons, Directors, Committee or Forum Chairs, Vice Chairs and Committee members (“C.A.R. Leaders”) shall vote in a manner that is in the best interests of the members. If you are also a member of another board of directors, or serve in any other decision-making capacity with another entity, your duties do not change as it relates to your duty as a Director or Committee member of C.A.R.

Members serving as C.A.R. Leaders shall NOT:

1. Engage in any undisclosed conflicts of interest;
2. Take inappropriate advantage of their positions; or
3. Abuse their positions of trust and responsibility.

For example, C.A.R. Leaders shall NOT:

A. Use non-public information made known to them as a result of their position to benefit personally or to benefit another entity in which they are involved.

B. Use information derived from the Committee or Directors meetings to the detriment of C.A.R. (or its members) or use the information in a manner inconsistent with the fiduciary duty of a C.A.R. Director or Committee member.

C. Disclose C.A.R.’s strategic or confidential information to any other entity.

D. Make or maintain an investment in any entity or business with which C.A.R., its subsidiaries or affiliated entities have a business relationship if the investment is of such a character (whether because of the size or value of the investment or for any other reason) as might create, or give the appearance of creating, a conflict of interest.

E. Advocate for a public policy position for another policy organization without first fully disclosing the relationship with that organization (i.e., officer, director, member, consultant, attorney, etc.) which relates in any way to the matter being discussed before the C.A.R. Committee or the Board of Directors.

DISCLOSURE OF OWNERSHIP AND BUSINESS INTERESTS.

1. Business (current or potential) with C.A.R. All C.A.R. Leaders must disclose any direct or indirect ownership and financial interest in any entity that C.A.R, its subsidiaries or affiliated entities are doing business with or that are being considered as potential providers to C.A.R., its subsidiaries or affiliated entities.
2. Competing Businesses and Services. If a C.A.R. Leader has any direct or indirect ownership or financial interest in, or serves in a decision-making capacity with any entity, that competes with products and services offered by C.A.R, its subsidiaries or affiliated entities, then the C.A.R. Leader must disclose that interest prior to speaking to a decision-making body about an issue involving those competing products or services.

Results of Disclosure: After the necessary disclosure, including disclosure to the body when debating the issue involving the interest, the C.A.R. Leader may still be able to debate the issue, depending on the issue and whether the conflict is significant enough to warrant abstention from voting, such as one that creates a conflict of interest (see policy on conflicts of interest).

DISCLOSURE OF POLICY/ORGANIZATION AFFILIATIONS.

1. Use of Position; Confidentiality. C.A.R.’s Directors, Officers or Committee members may not use their position with C.A.R. in order to achieve a financial, strategic or political benefit for themselves or a third party to the detriment of C.A.R., its subsidiaries or affiliated entities, nor may C.A.R. Leaders disclose strategic or confidential information regarding C.A.R. and its policies, business, or organizational objectives.

2. Positions in Other Entities. If a C.A.R. Leader serves in a decision-making capacity with, or has any direct or indirect ownership or financial interest in an entity that advocates public policies that are being considered by C.A.R, or that is doing business with entities that are advocating policies that are being considered by C.A.R., including any affiliated PACs, HAF or other entities, that C.A.R. Leader should disclose such position or business relationship prior to speaking to the related issue under consideration.

Results of Disclosure: After the necessary disclosure, including disclosure to the body when debating the issue involving the interest, the C.A.R. Leader may still be able to debate the issue, depending on the issue and whether the conflict is significant enough to warrant abstention from voting, such as one that creates a conflict of interest.

CONFLICTS OF INTEREST THAT REQUIRE ABSTENTION OR EXCLUSION.

When you are a Director or Committee member of the California Association of REALTORS®, you should vote in a manner that is in the best interest of the members. If you are a member of a board of directors of another entity, or have a role in that other entity, which interests conflict with this duty, it does not change your duty to the C.A.R. members and you may have to abstain from voting. In some instances it is inappropriate for you to have confidential information, given your other organizational role, ownership or financial interest, in which case you should not be present to receive the information or listen to the debate.

Personal Financial Benefit. Directors and Committee members should not participate in the debate when the Director or Committee member has a direct or indirect interest in an entity involved in an issue or when the C.A.R. Leader stands to financially benefit, either personally or through family*, without full disclosure of such interest and its extent. In some instances, such Directors or Committee members should not be present for the debate. The financial interests must be material and do not include minor passive interests in investments (mutual funds, for example) or minor financial interests of less than 10% ownership or control.

Organizational Benefit; Local Associations. It is inappropriate for another organization in which you are a director to instruct you to vote in a manner which would violate your duties as a C.A.R. Director or Committee member. Rather than do so, you should recuse yourself from voting. Most C.A.R. Directors and Committee members are selected by Local Associations and it is anticipated they express the view from that area so that when the entire Board of Directors votes, it expresses the will of REALTORS® across the state. Disclosure of the fact that you are in a leadership position with a Local Association is not required unless there is something specific about the interest or activity of the Local Association involving the issue under discussion that does not apply to all Local Associations generally.

*Direct or Indirect Family and Other Relationships. Sometimes the Director or Committee member is related to, or in a business relationship with, a person with a conflict of interest. To assure the highest level of integrity, these also must be disclosed. Financial or other conflicts of interest may be direct or indirect. Direct and indirect interests include any interest of any family member or significant person, and any organization in which the Director or Committee member, or a family member or significant person, is a director or officer, has any ownership interest, financial interest, contract, employment or stands to benefit from the issue considered. For purposes of this policy, family members include an individual’s spouse, registered domestic partner, his/her siblings and their spouses, his/her ancestors, and his/her descendants and their spouses.

VIOLATION OF POLICY. The violation of these policies are a serious matter and may constitute cause for removal or termination as a C.A.R. Director, Officer or Committee member, or the termination of any contractual relationship with the impacted entity. Any violation may be reported to the C.A.R. Officers and consideration of a ban for a period of time from all appointments may also be considered.