Standard 4: Conflicts of Interest
The land trust has policies and procedures to avoid or manage real or perceived conflicts of interest.
Background
A land trust operates in the public interest—not for the benefit of any individual. Both actual conflicts and the perception of a conflict can damage a land trust’s credibility. To avoid conflicts, a land trust should adopt and follow a written conflict of interest policy. A board member who thinks his or her participation in a board action could be viewed as a conflict should not attempt to influence that action and should not be present for discussion on the issue. Staff members who think they may have a conflict should disclose their concerns to their supervisor or as described in the organization’s conflict of interest policy. Other parties may also have conflicts of interest, and the policy should state how those conflicts are addressed. An individual who perceives the likelihood of serious continuing conflicts should not serve on the board or staff, both for legal reasons and to preserve the land trust’s credibility.
Relevant Law
- Society Act, RSBC 1996, c. 433, s. 27.
- Canada Corporations Act, RSC 1970, c. C-32.
- Society Act, RSBC 1996, c. 433.
- Canada Corporations Act, RSC 1970, c. C-32.
PRACTICE
C. Transaction with Insiders
When engaging in land and conservation agreement transactions with insiders, the land trust: follows its conflict of interest policy; documents that the project meets the land trust’s mission; follows all transaction policies and procedures; and ensures that there is no impermissible private benefit. For purchases and sales of property to insiders, the land trust obtains a qualified independent appraisal by a provincially licensed or certified appraiser who has verifiable conservation agreement or conservation real estate experience. When selling property to insiders, the land trust widely markets the property in a manner sufficient to ensure that the property is sold at or above fair market value and to avoid the reality or perception that the sale inappropriately benefited an insider.
Background
This practice on buying from, selling to, and accepting donations of land from board members, employees and other insiders was added to respond to land trusts’ requests for guidance relative to these types of transactions. While some land trusts avoid selling to or buying from board and staff members, others want to be able to engage these parties in transactions related to their mission. This practice will help land trusts avoid real and perceived conflicts of interest with regard to these transactions.
In order to ensure that the land trust’s interests are being protected, the land trust should verify purchase or sales prices with a qualified independent appraisal provided to the land trust. When buying land, a land trust should not rely on the seller’s appraisal. In certain circumstances, the land trust should consider getting a second qualified independent appraisal if there is disagreement with the insider on the initial appraisal. When a land trust is selling land, and an insider may be interested in purchasing the land, the property should be widely marketed to prospective conservation buyers through web pages, personal contacts, mailings, and listings in newsletters and other publications.
With regard to donations of land, board members or staff may wish to demonstrate their commitment to the land trust’s mission by donating or restricting their own land, advancing the land protection goals of the land trust. In these circumstances, the land trust should follow its conflict of interest policy, ensure that the potentially conflicted party is not part of the discussions relative to the acceptance of the donation or future stewardship of the conservation agreement, and keep thorough records so that the transaction is transparent and upholds the organization’s credibility. All of the land trust’s standard practices on reviewing projects against acceptance criteria, doing site inspections and other acquisition procedures should be followed closely.
Assessment Questions
BC Assessment Questions
- Do all land acquisition and covenant establishment transactions comply with internal policies?
- Are all transactions as described above in keeping with the strategic plan and mission of the land trust?
- Does every property the land trust intends to purchase or sell have a qualified independent appraisal by a provincially certified appraiser with conservation realty or agreement experience?
- Is every property the land trust intends to sell or purchase from insiders marketed widely to ensure it is sold or purchased at full market value?
CLTA Assessment Questions
- Does the land trust follow its conflict of interest policy when engaging in transactions with insiders?
- Does the land trust ensure the project meets its mission and follows all transactions, policies and procedures?
- Does the land trust ensure that there is no impermissible undue benefit?
- When purchasing land from or selling to an insider, does the land trust obtain a qualified independent appraisal?
- When selling property to an insider, has the land trust first marketed the property widely to other prospective buyers?
