What is Conflict of Interest in the Church?
Imagine a situation when a church rents space in a building that is owned by one of the church board members. Or imagine if a pastor hires a member of his family to work for the church. Are these examples of a conflict of interest?
Maybe. Maybe not.
To figure this out, it's important to understand the difference between "benefit of interest" and "conflict of interest." The first one is good, while the second one is bad.
A "benefit of interest" is where a church derives a positive benefit from a person of directive influence. So, if a church rents space from a building owned by a board member who gives the church a generous discount, this is a good thing. Or, if a church member has access to supplies or resources at a discounted price, this is a clear benefit to the church. In both cases, the church organization benefits from the personal interest of the leaders involved. These arrangements happen all the time in the church world and greatly help our mission.
A "conflict of interest" involves some actual conflict where the church organization is harmed by a person of directive influence. So, if a church rents space from a building owned by a board member who charges the church double rent, that would be a conflict of interest. Or, if a pastor hired an incompetent family member when a more qualified individual was available, then this too would be a conflict of interest. In both cases, what was best for the leader was not what was best for the church. While the person of directive influence had a duty to act in the best interests of the church organization, they acted against the interests of the church instead.
The problem we face here is that to the casual observer, both "benefit of interest" and "conflict of interest" look the same – a board member rented space to the church, or a pastor hired a family member. Fortunately, some tools are in our toolbox to help protect us from conflict-of-interest problems while still allowing us to benefit from benefit-of-interest advantages.
1. Disclosure and Transparency
Whenever there is a potential conflict of interest, the person of directive influence should disclose their interest. So, for example, the board member should disclose their ownership of the building, and the pastor should disclose his familial relationship to the job applicant. Nothing looks quite as sketchy as a lack of transparency.
2. Recusal
Whenever there is a potential conflict of interest, the person of directive influence can excuse themselves from making or voting on the decision. So, in our hypothetical examples, the board member who owns the building can leave the room while the discussion and decision to rent the property are made. Although the pastor makes most of the hiring decisions, when his family members are among the applicants, he can leave the final decision on which qualified candidate to hire to others.
3. Using an Independent Third Party
Like the recusal option, using an independent third party can often result in making objective decisions for the organization's benefit. For example, a church can consult with an at-arm's-length commercial real estate agent to advise on whether the board member's rental proposal is a good deal or not. Very often, church bookkeeping, auditing, and accounting are done by independent third parties to deliver the best results with the most integrity.
Administering our churches with transparency and integrity is always the right thing to do, and we can do that consistently by using these simple tools.
John works as an Effectiveness Coach with the ABNWT District of the PAOC. He is a strategic thinker who has pastored urban and rural churches, traditional and on the cutting edge. He is a passionate evangelist who is committed to rapid church growth by creating churches that unchurched people love to attend. With his church planting, multi-service, multi-site, and church merger experience, he regularly trains leaders, coaches church planters, and helps other pastors lead their churches into new growth.