‘Self interest’ and ‘vested interests’ are central to governance of conflict of interest within non-profit organisations.
Boards elected by members of a profession or industry rightly see their role as addressing member needs – often with a focus on members’ economic success or survival.
While the conflict (or perception of conflict) between a director’s personal interests and those of the organisation and its members is the usual issue, there is a broader question for ethical governance regarding the potential conflict between serving the interests of members and the public interest. How the organisation demonstrates its commitment to corporate social responsibility needs to be considered at the same time as members’ business needs are assessed, and strategic goals are set.
This is not just a question of how to manage reputational risk for the organisation (and its directors), but more importantly, how the organisation sees itself contributing to civil society.
Association directors charged with advocacy on behalf of their peers must honour the organisation’s constitutional objectives, which generally means serving member needs. In doing so however, good judgment is required to separate legitimate member service activities from those which may be seen by others as contrary to the public interest.
The header image above borrows the ‘slider’ metaphor previously used to illustrate Aristotle’s Virtue Continuum, to highlight the need for directors to serve their constituency while preserving and promoting public ‘goods’. ‘Pure altruism’ may be seen by some members as a failure to meet governance obligations, while ‘pure self interest’, or ‘vested industry interest’, will be condemned as greed, and lead to withdrawal of the social license to operate.
Enlightened self-interest might be thought to offer a balanced mid-point between altruism and greed, but for me, the primary objective would be to focus on goals which advance the opportunity for members to better serve the community. In doing that, they prove their value to society, receive public recognition (good will), and this in turn addresses their business needs.
There may be benefit for your board, when next reviewing the values (your governance ethos) which underpin your strategy, to reflect on where the board is setting the slider between altruism and greed.
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