Policy Statement On Ethics, Integrity, And Conflicts of Interest

Article I

Introduction and Purpose

This Policy Statement On Ethics, Integrity, and Conflicts of Interest (the "Policy") has been adopted by the National Association of Quality Ancillary Providers, Inc. (the "Association") to provide guidance and principles of conduct to the Association's Board of Trustees (the "Board"), Trustees, officers, committee members, and Founding Members (the "Managing Authorities") who might find themselves in a position where their personal interests could conflict with the interests of the Association. The purpose of the Policy is to protect the interests of the Association when the Managing Authorities intend to enter into a transaction or arrangement, or advocate on behalf of ancillary providers. Specifically, the Policy is designed to ensure that such transactions or advocacy are not conducted in order to benefit the private interests of the Managing Authorities or the Members of the Association.

The relationship between the Association and the Managing Authorities is one that carries with it a duty of honesty, loyalty and fidelity. All Managing Authorities must exercise the utmost good faith in all transactions that touch upon their duties and responsibilities for, or on behalf of, the Association. The appearance of illegality, impropriety, or a conflict of interest can be detrimental to the Association and must be avoided.

This Policy also establishes procedures whereby any potential conflict of interest or improper conduct will be disclosed, so that appropriate action may be taken promptly. The primary benefit of the Policy is that the Board can make decisions in an objective manner, without undue influence by Interested Persons, as such term is defined herein. This Policy can help ensure that the Association fulfills its mission and purpose and properly oversees the activities of the Managing Authorities, pays no more than reasonable compensation to executives and other highly compensated individuals, and does not participate in or undertake any business arrangements the terms of which unreasonably benefit an Interested Person (as such term is defined herein) at the expense of the Association or the Members' general interests. 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.

All Board members, officers, and designated personnel, including, Managing Authorities, will be expected to read and understand this Policy and to review it periodically in order to be alert to situations that could create a conflict of interest or otherwise be contrary to the established policies of the Association.

Failure to comply with this Policy is grounds for removal and/or termination of the Managing Authorities.

Article II


(a) Interested Person means any Managing Authority that has a direct or indirect financial interest, as defined below.

(b) Financial Interest is when a person has, directly or indirectly, through business, investment, or a family member:

     (i) an ownership or investment interest in any entity with which the Association has a transaction, arrangement, or direct advocacy interest;

     (ii) a compensation arrangement with any entity or individual with which the Association has a transaction, arrangement, or direct advocacy interest;

     (iii) a potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Association is negotiating a transaction, arrangement, or direct advocacy interest; or

     (iv) a familial or close, personal relationship with an individual that seeks to direct or make decisions on behalf of the Association or otherwise control or direct the Association or Members of the Association.

     (v) an individual business interest that has the potential to, directly or indirectly, influence the Association's advocacy efforts and otherwise unreasonably benefit such interest at the expense of the Association or the Members' general interests. 

A Financial Interest is not necessarily a conflict of interest. Under Article III(B), a person who has a Financial Interest may have a conflict of interest only if the Board decides that a conflict of interest exists.

(c) Compensation means any direct and indirect remuneration, as well as gifts or favors that exceed de minimis standards.

Article III


(a) Duty to Disclose.  In connection with any actual or possible conflict of interest, an Interested Person must disclose the existence of the Financial Interest and be given the opportunity to disclose all material facts to the Board.  Such disclosure shall be made either through the Annual Disclosure Statement under Article VI or when an undisclosed conflict otherwise arises.

(b) Determining Whether a Conflict of Interest Exists. After disclosure of the Financial Interest and all material facts, and after any discussion with the Interested Person to clarify or obtain additional information relevant to the Financial Interest, the Interested Person shall leave the Board while the determination of a conflict of interest is discussed and voted upon.  The remaining Trustees shall decide if a conflict of interest exists.

(c) Procedures for Addressing the Conflict of Interest. Once the disinterested Trustees have determined that a conflict of interest exists with respect to a particular transaction, arrangement, or course of advocacy:

     (i) An Interested Person may make a presentation at the Board meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and vote on, the transaction or arrangement involving the possible conflict of interest.

     (ii) The Board shall, if appropriate, appoint a disinterested person to investigate alternatives to the proposed transaction, arrangement, or course of advocacy.

     (iii) After exercising due diligence, the Board shall determine whether the Association can obtain with reasonable efforts a more advantageous transaction, arrangement or course of advocacy that would not give rise to a conflict of interest.

     (iv) If a more advantageous transaction, arrangement, or course of advocacy is not reasonably possible under circumstances not producing a conflict of interest, the Board shall determine by a majority vote of the disinterested Trustees whether the transaction or arrangement is in the Congregation's best interest, for its own benefit, and whether it is fair and reasonable.  In conformity with the above determination it shall make its decision as to whether to enter into the transaction, arrangement, or course of advocacy.

(d) Violations of the Policy.

     (i) If the Board has reasonable cause to believe a Managing Authority has failed to disclose actual or possible conflicts of interest, it shall inform the individual of the basis for such belief and afford the individual an opportunity to explain the alleged failure to disclose.

     (ii) If, after hearing the response of the Managing Authority and after making further investigation as warranted by the circumstances, the Board determines the individual has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.

Article IV

Records of Proceedings

The minutes of the Board meetings 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 decision as to whether a conflict of interest in fact existed.

(b) The names of the persons who were present for discussions and votes relating to the transaction, arrangement, or course of advocacy, the content of the discussion, including any alternatives to the proposed transaction, arrangement, or course of advocacy, and a record of any votes taken in connection with the proceedings.

Article V


(a) An officer who receives compensation, directly or indirectly, from the Association for services is precluded from voting on matters pertaining to that officer's compensation.

(b) A Trustee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Association in his or her capacity as an officer, is prohibited from providing information to the Board regarding compensation.

Article VI

Annual Statements

(a) Each Managing Authority shall annually sign a statement which affirms such person:

     (i) has received a copy of the Policy Statement on Ethics, Integrity, and Conflicts of Interest,

     (ii) has read and understands the Policy,

     (iii) has agreed to comply with the Policy, and

     (iv) understands that the Association is a nonprofit organization and in order to maintain its federal tax exemption it must engage primarily in activities which further its purposes and mission.

(b) Each Managing Authority shall sign the Conflicts of Interest Disclosure Statement then used by the Board for purposes of providing the Board with the information needed to implement this Policy.

Article VII

Periodic Reviews

To ensure the Association operates in a manner consistent with its purposes and mission and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted.  The periodic reviews shall, at a minimum, 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 transactions, arrangements, and the course of advocacy of the Association conform to the Association's written policies, are properly recorded, reflect reasonable investment, further the purposes and mission of the Association, and do not result in private inurement or impermissible private benefits, or otherwise convey an unreasonable compensation or business arrangement upon an Interested Person.

Article VIII

Use of Outside Experts

When conducting the periodic reviews as provided for in Article VII, the Association may, but need not, use outside advisors.  If outside experts are used, their use shall not relieve the Board of its responsibility of ensuring that periodic reviews are conducted.