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Associations Now

The Courage to Face Conflicts of Interest

ASSOCIATIONS NOW, August 2012 Horizons

By: Greg Wilson, CAE

Summary: An association executive explains how he has built the skill to directly address instances of conflicts of interest.

As the accounting manager, controller, and later director of finance for various associations, I have encountered my share of conflicts of interest and ethical lapses in others. In nearly every instance, the responsibility to correct the situation fell to me. I think this was in part because I project a sense of executive courage, an ability to deal with issues of governance and conflicts of interest with conviction and dignity.

But I have not always had this courage. In my youth I was more like the cowardly lion, shying away from difficult conversations. Over the years, however, I have gained an appreciation for my duty as an association professional to protect the financial assets of the association and its members. I have fulfilled that duty on several occasions, and each experience provided a bit more courage for the next one. Uncovering and correcting an ethical lapse is disheartening, but if handled with courage, it can be a growth experience for the association professional.

Years ago, while newly employed as accounting manager at a small association, I noticed a pattern of reimbursements for computer and peripheral purchases. An employee was in the habit of using a personal credit card to make purchases and then requesting reimbursement. As he did, he racked up points on his card, which he cashed in for airfare and other personal rewards.

My predecessor had allowed the practice, not realizing the ethical difficulty it presented. It took some courage to tell the employee that purchases for the association must be made directly from the association's accounts. He understood, changed his purchasing behavior, and I was left with a thin patina of courage.

A few years later, as controller at a different association and taking over management of a remodeling project, I learned the contractor was neither licensed nor bonded. The organization had failed to conduct a background check on the contractor, who was a close friend of a senior employee, and I was left in the unfortunate situation of having to stop the work and find another contractor. The right thing to do is not always easy; the CEO and board of directors were not pleased, and I took some heat from coworkers. We instituted a new policy requiring checks on contractors and got the job done on time and under budget. My courage was growing by leaps and bounds now.

And then, I also have had to collect reimbursement for personal expenses charged to a company credit card. The situation was particularly challenging because the party was an elected officer and, ultimately, my superior. The process required a generous amount of courage as well as professional support. I spoke with association professional peers and outside auditors before bringing the issue to the attention of the treasurer and other officers. The situation was corrected with full reimbursement, and we started providing more thorough training to volunteers on acceptable expenses.

Each of these conversations was guided by three characteristics of courage:

  • They had a noble purpose (protecting the assets of the association).
  • They were intentional (I referred to policy and codes of ethics).
  • I had the conversations despite my own fears (thankfully, I was never ostracized nor retaliated against).

Courage is a coat we wear that is woven from past experiences and strengthened by age. It is the ability to raise difficult issues, share unpopular opinions, and engage others in necessary conversations with candor and conviction, despite one's fears or doubts. Like the cowardly lion from Oz, we all have this ability; sometimes we just do not realize it. It is easier for me today to have difficult conversations than it was early in my career. And with each unfortunate ethical lapse that I must deal with, I gain a bit more courage for the next difficult conversation.

Greg Wilson, MPPA, CAE, is director of finance and operations at the Sacramento Association of Realtors in Sacramento, California. Email: gwilson@sacrealtor.org

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  Thomas Ingram , October 24, 2012
Great article Greg!
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  Ruth Abrahamson , August 03, 2012
Greg: Thanks for highlighting a difficult function that we, as association professionals, often have to play. As you state so well, with clear guidelines and policies, much of the unwitting or ignorant behaviours can be avoided in the first place.

I also agree with your approach to line up documentation and additional counselors, whether external auditors of Board Members. Lastly or course, these practices relate equally to any ethical questions, whether fiscally related or not.




 

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