Most churches are ill-equipped to handle conflicts of interest. This is one of the most compelling findings from a recent national survey of church governance practices conducted by the ECFA (Evangelical Council for Financial Accountability).
When asked to describe their governing board’s conflict of interest oversight, nearly half (49%) of churches said they do not have a conflict of interest policy. One in ten churches (12%) indicated they “probably” have a conflict of interest policy but that the board has not reviewed it for a long time.
Only about one in six churches (16%) said they have a conflict of interest policy, refer to it when needed, and require the board and key staff members to annually complete a conflict of interest questionnaire related to the policy.
The Importance of Properly Handling Conflicts of Interest
So, what’s the big deal? Why is it critical for a church to properly handle conflicts of interest?
To answer these questions, we must start with a more basic question: What is a “conflict of interest” in the context of church administration?
There is potential for a conflict of interest when a person who is responsible for promoting the best interests of the church has a competing personal interest.
In other words, individuals in positions of influence at a church, such as board members and key leaders who are responsible for conducting and overseeing the church’s business affairs, may occasionally find their personal interests competing with their duty to make decisions in the best interest of the church.