Conflict of Interest and Trustee Liability Overview

Conflict of Interest

Montana Code Annotated, Title 2, Chapter 2 covers standards of conduct for government employees and board members. 

The Trustee Roles and Responsibilities course covered the code of ethics, so we will focus more on best practices when board members experience a conflict of interest.  If you haven't taken that course, it is highly recommended.

How you behave as a board member can help you avoid problems and any liability that might come with violating the law. We’ll talk about both of those things.

What constitutes a conflict of interest?

If a board member and/or their family is going to benefit from a decision made by the board, the board member needs to declare a conflict of interest. This is the most obvious example.

Reality is a bit more nuanced. In small towns, board members may be related to vendors. Or a board member may serve on multiple boards and experience a conflict of interest because of their service on both boards. 

One of the best tests of whether a board member is experiencing a conflict of interest is to ask, “if this discussion appeared in the newspaper or on social media how would it reflect on the library and the board member.” If the board and/or board member does not want to see their decision or discussion in the newspaper, it’s probably a violation of the code of ethics and most likely involves a conflict of interest.

What should a board member do if they have a conflict of interest?

The board member MUST publicly state they have a conflict of interest.

The board member may abstain from voting and ask that the minutes reflect their abstention.

Depending upon the nature of the conflict, the board member may wish to avoid discussing the item and/or may even wish to leave the room while other board members discuss and act on an item.

Liability

In these times, board members often want to know if they have any protection while conducting library business. 

Most likely board members are covered by Montana Code Annotated 2-9-305 which discusses immunization, defense, and indemnification of employees. 

Board members are a little bit unusual in the amount of power they have, so it’s best to check with the city or county attorney.

Immunization, Defense, And Indemnification Of Employees

Public officers and employees are covered in MCA 2-9-305 Immunization, Defense, and Indemnification of Employees

The definition of employee is found in MCA2-9-101 which states

What Isn't Covered?

MCA 2-9-305 also defines when board members are NOT covered under the following four scenarios:

1. The conduct of the individual was based on oppression, fraud, or malice.
2. The conduct of the individual constitutes a criminal offense.
3. The individual compromised or settled the lawsuit without the permission of the government entity.
4. The individual failed to cooperate with the defense of the case.

Rules of Conduct Refresher

Refresh your knowledge of MCA 2-2-104 Rules of Conduct For Public Officers, Legislators, and Public Employees