PREAMBLE TO NYCLA CODE OF CONDUCT*
The Code of Conduct is a component of our system of internal controls and dovetails with our other formal protocols and policies such as the Policies and Procedures Manual, the Personnel Manual, the Audit Committee Charter, the Investment Committee Protocols, and the Reimbursement Policy and Protocol. Each of these policies and protocols has been enacted by the Board and communicated to the relevant individuals. In addition to enacting these policies and procedures, the Board has taken steps to oversee that the policies and procedures are followed. In a recent article by NYCLA’s former Board member, David Samuels, who now serves on NYCLA’s Foundation board, Mr. Samuels endorsed as "best practices" the type of governance structure that NYCLA is establishing. A copy of that article was distributed to the directors. To the knowledge of NYCLA’s leadership, no member of the Board is engaging in any activity that is violative of the Code of Conduct as presented, and that the Code is not intended to target any on-going conduct of Board members. Rather, the "existence" of the Code and the provision for its signature represent the customary means by which the board exercises its oversight function and its responsibility of "setting the tone at the top." It is imperative not only that our members but also others throughout the legal profession and our potential contributors should perceive these matters as indicia of our commitment to maintaining the highest standards of integrity and stewardship. NYCLA should be proud to practice the principles we preach when it comes to issues of this nature, and NYCLA should urge all not-for-profit organizations in the state, especially bar associations, to follow our example.
* The Preamble to the Code of Conduct was approved by the Board of Directors of the New York County Lawyers' Association at its regular meeting on November 8, 2004.
New York County Lawyers’ Association
14 Vesey Street · New York, NY 10007
(212) 267-6646 · fax: (212) 406-9252
CODE OF CONDUCT*
A director, officer or employee of the New York County Lawyers’ Association (NYCLA), when acting on behalf of NYCLA, must comply with the law, act in an ethical manner, and avoid conflicts of interest or the appearance of conflicts of interest. Specific guidance applicable to financial matters and employees is contained in the Audit Committee Charter, the Employee Personnel Manual and the Policies and Procedures Manual. This Code of Conduct applies to directors, officers and employees of NYCLA.
Conflicts of Interest
Except with disclosure of the conflict to and consent of NYCLA, a director, officer or employee may not act in carrying out his or her NYCLA responsibilities if he or she may be affected by a conflict of interest. A conflict of interest arises when a personal, business, financial, or, in the case of a lawyer, client interest of the director, officer or employeemay affect the objectivity of the director’s, officer’s or employee’sactions on behalf of NYCLA or conflicts with the interests of NYCLA. A personal interest may arise from the director’s, officer’s or employee’s association with another bar association or non-profit corporation. A business interest arises when the director, officer or employeeis an employee or consultant to or has another business arrangement with, another public or private concern. A significant financial interest includes an ownership interest in the securities of a public or private concern. A concern in which a director or officer has a personal, business or financial interest is referred to in this Code of Conduct as an “Entity.” For purposes of this Code of Conduct, a business or financial interest of the spouse or any family member who lives in the individual director’s, officer’s or employee’shousehold is attributed to the individual. A business or financial interest of a partner, associate or employer, or a more remote relative, of an individual director, officer or employee, is not automatically attributed to the individual. However, as a matter of good practice, where the individual is aware of such a business or financial relationship that conflicts with the interests of NYCLA, the individual should disclose it to and obtain the consent of NYCLA in order to avoid the potential for subsequent embarrassment.
Situations in which a conflict of interest may arise include, but are not limited to, those where the individual:
- Approves or recommends the purchase of major equipment, materials or other items for NYCLA from an Entity.
- Negotiates or influences the negotiation of contracts between NYCLA and the Entity.
- Accepts gifts, gratuities or special favors from any person or Entity that does or is attempting to do business with NYCLA, other than gifts with a fair market value in any year of $50 or less.
- Uses his or her position or activities for NYCLA to further the interests of a client or other person or Entity.
- Espouses a position (by speaking or voting for the position) that the lawyer knows would benefit a client without disclosing such fact (but not necessarily the name of the client).
Misuse of Confidential Information of NYCLA
Except with disclosure to and consent from NYCLA or in furtherance of NYCLA activities in which he or she is authorized to act, a director, officer or employee shall not reveal to any third person or use for his or her own purposes any of NYCLA’s proprietary business or financial information, records, results, work product or other information acquired in connection with the director’s, officer’s or employee’sNYCLA activities that is not generally available.
Legal Obligations of Directors and Officers
The obligations of directors and officers to NYCLA is governed by §§ 715-717 of New York’s Not-for-Profit Corporation Law (“N-PCL”) as well as precedents long established by the New York courts. The statutes and legal precedents establish that the directors and officers owe a fiduciary duty to NYCLA, including the duty of care and the duty of loyalty. Nothing in this Code of Conduct is intended to reduce the duties of disclosure contained in N-PCL 715.
The duty of care, codified in the N-PCL, concerns a director’s or officer’s competence in performing his or her functions as a director or officer. A director or officer must exercise his or her responsibilities in good faith and with that degree of diligence, attention, care and skill that an ordinarily prudent person would exercise under similar circumstances in a like position.
The duty of loyalty owed by a director or officer to a non-profit organization requires that the director or officer act in a manner that does not harm the corporation. The duty of loyalty requires the faithful pursuit by the director or officer of the interests of the corporation rather than the financial or other interests of the director or another corporation he/she serves. It further requires a director or officer to avoid using his or her position to obtain improperly a personal benefit or advantage that might more properly belong to the corporation. To satisfy the duty of loyalty, the director or officer must act in good faith and in a manner he or she reasonably believes to be in the best interests of the corporation.
Preservation of Tax Exemption
Directors and officers should be aware that NYCLA is a charitable organization and that, in order to maintain its federal tax exemption, (i) it must engage primarily in activities that accomplish one or more of its tax-exempt purposes, (ii) it may not allow a substantial part of its activities to consist of carrying on propaganda, or otherwise attempting to influence legislation (except as otherwise provided by Internal Revenue Code Section 501(h)), and (iii) it may not participate in or intervene in (including the publication or distribution of statements), any political campaign on behalf of (or in opposition to) any candidates for public office.
NYCLA and its Board members shall not be bound by any political statements or activity of any director or officer. No director or officer who makes a political statement or engages in political activity shall state or imply that such statement or activity is on behalf of NYCLA.
Restrictions on Representing NYCLA
Each director, officer or employee when acting as a representative of NYCLA shall conduct himself or herself so as not to adversely affect NYCLA’s public image or credibility or hinder the accomplishment of its mission. In any interaction with the public, press or other entities, a director, officer or employeemay not speak for NYCLA other than to repeat explicitly stated Board positions. However, a director, officer or employeewho is a member of a NYCLA committee or section may state the views of the committee or section in accordance with the policies of the committee or section or as directed by the Board.
A director, officer or employeeof NYCLA may not use NYCLA stationery for personal correspondence or to conduct business or marketing on behalf of his/her law firm, employer or other organization.
Administration of Code of Conduct
Whenever this Code requires a director, officer or the Counsel to make disclosure to and obtain the consent of NYCLA, such disclosure and consent shall be to and such consent from the Board of Directors. Whenever this Code requires an employee to make disclosure to and obtain the consent of NYCLA, such disclosure shall be to and such consent from the Counsel to NYCLA. If a director, officer or employeehas reason to believe that another director, officer or employee has an undisclosed conflict or potential conflict of interest or other violation of this Code, he/she should disclose the reason for such belief to the Chair of the Audit Committee, who will, in consultation with legal counsel, advise NYCLA on the existence of a violation.