Community-led development "The Apache Way"
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WHEREAS, the Board of Directors desires to increase clarity around correct handling of conflicts of interest, and WHEREAS, the Board of Directors desires to hold our organization to the highest standards of transparency NOW, THEREFORE, BE IT RESOLVED, the following conflict of interest policy, be adopted, and that the Secretary be charged and entrusted with the record keeping which results from Articles IV and VI, and that the Chairman of the Board be charged and entrusted with the ensuring the performance of periodic reviews as described in Article VII. Article I - Purpose The purpose of the conflict of interest policy is to protect the Apache Software Foundation's (ASF's) interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the ASF or might result in a possible excess benefit transaction. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations. Article II - Definitions 1. Principal Officer: A principal officer is an officer other than a PMC chair who holds no other office. 2. Interested Person: Any director or principal officer who has a direct or indirect financial interest, as defined below, is an interested person. 3. Financial Interest: A person has a financial interest if the person has, directly or indirectly, through business, investment, or family: a. An ownership or investment interest in any entity with which the ASF has a transaction or arrangement, b. A compensation arrangement with the ASF or with any entity or individual with which the ASF has a transaction or arrangement, or c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the ASF is negotiating a transaction or arrangement. Compensation includes direct and indirect remuneration as well as gifts or favors that aren’t insubstantial. For purposes of this policy, an ownership or investment interest that is insubstantial need not be disclosed. A financial interest isn’t necessarily a conflict of interest. Under Article III, Section 2, a person who has a financial interest may have a conflict of interest only if they declare a possible conflict of interest or the appropriate board decides that a conflict of interest exists. Article III - Procedures 1. Duty to Disclose In connection with any actual or possible conflict of interest, an interested person must choose one of two paths: a. They can disclose the existence of a possible conflict of interest, and recuse themselves from the affected decisions, without giving any more information. b. If the interested person believes the financial interest does not constitute a conflict of interest they must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement. 2. Determining Whether a Conflict of Interest Exists In case of voluntary declaration of a possible conflict of interest and recusal, the conflict is presumed to exist. If the interested person declares a financial interest without voluntary recusal then after disclosure of the financial interest and all material facts, and after any discussion with the interested person, the remaining board or committee members shall decide if a conflict of interest exists. 3. Procedures for Addressing the Conflict of Interest a. An interested person may make a presentation to the board or relevant committee, but shall not cast a vote on the transaction or arrangement involving the possible conflict of interest. b. The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. c. After exercising due diligence, the governing board or committee shall determine whether the ASF can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest. d. If a more advantageous transaction or arrangement isn’t reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the ASF'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 or arrangement. 4. Violations of the Conflicts of Interest Policy a. If the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. b. If, after hearing the member's response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member 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 governing board and all committees with board delegated powers 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. If the interested person did not choose voluntary recusal, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing board's or committee'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 or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings. Article V - Compensation a. A voting member of the governing board who receives compensation, directly or indirectly, from the ASF for services is precluded from voting on matters pertaining to that member's compensation. b. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the ASF for services is precluded from voting on matters pertaining to that member's compensation. c. No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the ASF, either individually or collectively, is prohibited from providing information to any committee regarding compensation. Article VI - Annual Statements Each director, principal officer and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person: a. Has received a copy of the conflicts of interest policy, b. Has read and understands the policy, c. Has agreed to comply with the policy, and d. Understands the ASF is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. For purposes of this article, a Project Management Committee (PMC) having only the normal powers of a PMC is not a committee with governing board delegated powers. Article VII - Periodic Reviews To ensure the ASF operates in a manner consistent with charitable purposes and doesn't 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 partnerships, joint ventures, and arrangements with management organizations conform to the ASF's written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and don't result in inurement, impermissible private benefit, or in an excess benefit transaction. Article VIII - Use of Outside Experts When conducting the periodic reviews as provided for in Article VII, the ASF may, but need not, use outside advisers. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews are conducted. Special Order 7B, Adopt a COI policy, was approved by Unanimous Vote of the directors present.