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Meghan Daniels
SAI Global Compliance

Meghan Daniels is Senior Director, Advisory Services at SAI Global Compliance. She previously managed the corporate compliance program for Blue Cross Blue Shield of Massachusetts, Inc. (BCBSMA), where she was responsible for training, policy development, and management of the conflict of interest disclosure process. While at BCBSMA, Ms. Daniels also supported all other compliance and ethics program functions, such as investigations of compliance inquiries, management of committee structure, and preparation of board reports. Ms. Daniels also practiced law for three years at a Boston firm, where she focused on commercial litigation. Ms. Daniels is a member of the Massachusetts bar and is a Certified Compliance & Ethics Professional.
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Outside Board Participation: When a Policy is not an Option

by Meghan Daniels, Jan 20, 2011

When it comes to external board participation, wouldn’t it be easier if there was a hard and fast rule?  Outside an absolute restriction on external board participation by employees, which would be an injustice to employees and companies alike, there really is no simple policy.  Should you limit participation to certain types of boards?  To a certain number of boards?  With an increase in external scrutiny surrounding conflicts of Interest over the last several years, it is important for companies to clarify their approach to this topic, even in the absence of a black and white policy.  Further, it’s imperative for employees to understand that outside board participation can, in some cases, present a conflict of interest and that they are required to disclose these relationships to the Compliance Office. 

When a defined policy is not feasible, a company should implement and document a consistent approach for each case-by-case analysis.  For example, establish a set of questions to help evaluate requests to participate on outside boards and document both the responses and your analysis whenever you authorize or restrict participation.    

Following is a list of questions to consider when conducting an evaluation of external board participation.

Employee’s role at the company:

  • Does the employee have the authority to bind the company or make decisions on behalf of the company (for example, through contractual commitments)? 
  • Does the employee have the ability to impact decisions made by the Company (for example, the Chief of Staff to the CEO)?

Employee’s time commitment to the board position: 

  • How frequently will board meetings take place? 
  • Will the employee use personal time t o attend board meetings? 
  • Will board participation in any way impact the employee’s ability to fulfill his or her responsibilities to the employer? 
  • Does the employee participate on other external boards and, if so, will the time commitment together present an issue?

Status of the external company:

  • Is the board position with a non-profit or a for- profit company? 
  • Will the employee be paid for his or her service?

Employer’s relationship with external company:  

  • Is the external company a competitor, vendor, supplier, or other business partner of the employer and, if not, is there the potential for such a relationship in the future?

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