Ministry Conflict of Interest

Reprinted with permission from Baptist Bulletin May/Jun 2013. All rights reserved.

As a church leader, you are asked to counsel a man in your church who is having marital problems. In your first meeting, he tells you he is having an affair that he has no intention of ending. Do you have a duty to disclose this to the other leaders to work toward reconciliation? If his wife is a part of your church, do you also have an obligation to her? Do you have a duty of confidentiality to the counselee? If you didn’t disclose to him that you might be obliged to discuss his disclosure with church leaders, and if no one signed a waiver of confidentiality, you are in the middle of a conflict of interest.

The importance of the broader issue—ministerial ethics—should be obvious: an ethical failure can ruin a ministry. I recently wrote Doing Right while Doing Good with Kenneth Bickel to show how ethics is ultimately about choices. We debate the merits between courses of action because we seek the right choice. When we choose poorly (contrary to Scripture), we have failed. Consequences might include irrelevance, fractured relationships, or even the end of a ministry.

Perhaps some will observe that Scripture does not give exact solutions to every ethical problem. But we do have clear guiding principles that can go a long way toward protecting a ministry. Understanding complex issues will require work, but any serious Christian leader should be willing to embrace the struggle. This article will explore conflicts of interest as an ethical subject applying to Christian leaders, with three intended results:

• Provide a broad understanding of conflicts of interest and the fundamental nature of the ethical conflict.
• Provide a framework for working through potential conflicts of interest and deciding upon appropriate responses.
• Provide several case studies, and other questions to consider, which will allow the reader to navigate potential conflicts and possible remedies.

Conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in another interest. In the law, a conflict of interest is usually considered when one person’s duty also relates to another person or organization.

For instance, as an attorney I cannot represent both the plaintiff and the defendant in a lawsuit. Why not? Because what is good for the plaintiff is likely to be bad for the defendant. I cannot advocate for the plaintiff’s best interest (i.e., fulfill my duty to the plaintiff) if I also have a duty to advocate for the defendant’s best interest (i.e., fulfill my duty to the defendant). The interests of the plaintiff and defendant are conflicting.

The concept of duty is all around us and usually seems like common sense. You have a duty to other drivers to avoid driving your car in a negligent manner. If you are the CEO or board member of an organization, you have a fiduciary duty to manage and protect the organization’s property or money. A conflict of interest can be thought of as a conflict of duties. This is not the only way to think about conflicts, but in my experience the idea of duty helps church leaders avoid bad situations.

To provide a framework for working through potential conflicts of interest and deciding upon appropriate responses, I propose four simple questions. These are not intended to be “words to live by” or legal advice; rather, they represent an easy way to work through most situations of potential conflict.

Four Test Questions

1. What is your “interest” or “duty” in this situation or task?
2. Do you have more than one interest in this situation or task?
3. Is there some competition between these interests/duties?
4. Is there a remedy to protect those whose interests you have a duty to protect?

This first question is the most important and occasionally the most difficult. If you are a pastor or deacon, what duties do you have to the church? Does that answer change when you think of the church as an organization rather than a group of individual believers? The officers of your church have a fiduciary duty to protect the assets of the church. At the same time, what specific duties do the pastors and deacons have to individual believers in your local body? Are those duties different for different people? And what duties, if any, do you have to unbelievers? Once you have an idea of what your duties are, it becomes much easier to determine if you have multiple competing duties.

In many ways this question of duty is a guard against selfishness. The completely selfish person has no conflicts of interest, ever. His interests—limited to his own interests—are simple and easy to ascertain. But when we act on behalf of others, we encounter potential conflict. What is in one person’s best interest may not be in another person’s best interest. Things get really ugly when we ask who gets to determine the meaning of “best interest.” As believers, selfishness is not an option. In fact, your life should be spent acting in the best interests of others. Thus, the first question is impossible to avoid and should be carefully thought through.

Protecting against Conflict of Interest

Avoidance. The best solution is always to avoid the conflict altogether. See the conflict before it occurs and walk away. Consider adopting a conflict of interest policy for your ministry, such as the model statement from the Evangelical Council for Financial Accountability (www.ecfa.org). Think of a conflict of interest in its worst-case scenario. What could go wrong?

Disclosure. Ideally you should disclose any relationships or duties in writing, before the situation begins. At a minimum, the pastor and church leaders should disclose their duties to each other, allowing for mutual accountability. Later, the conflict of interest may need to be explained to a broader audience, such as the congregation or the ministry’s constituents. This should be done transparently in a way that demonstrates that the potential conflict has been anticipated and resolved prior to a problem.

Recusal. Some conflicts of interest can be resolved when a person temporarily steps out of the decision-making process while the issue is being discussed by the rest of the decision-making body. When a pastor steps out of the church business meeting before the congregation votes on his salary, he is a voting member who recuses himself because he will directly benefit from the result of the vote.

Audit. Many churches and ministries arrange for an annual financial audit. This is also a good time to evaluate whether the church’s conflict of interest policy is still being followed.

Ethics rarely provides easy answers. Every situation is different. In Doing Right while Doing Good Ken Bickel and I try to outline some basic rules to help leaders honor God and protect their ministries. In this article, the goal has been to examine more closely one particular ethical area. Given the complicated nature of each situation, some broad principles based on a thorough understanding of Scripture and a willingness to embrace the struggle of thinking through each potential conflict will go a long way toward furthering the church’s ministry.

Case studies

Q. I am an attorney and I also serve on my church’s deacon board. If the church needs legal services and I offer to have my firm (of which I am the president) provide those legal services for a fee, is there a conflict of interest?

A. Possibly. I have already identified at least two duties, to my law firm as its president and to the church as a member of its board. Is there a competition or conflict between those duties? Perhaps, but that does not necessarily mean that I should recuse my firm from consideration. If I am the best available service provider, I am providing those services at the prevailing rate, and everyone knows of the potential for a conflict of interest, then I likely have not violated either duty. If my firm charges the church $1,000 per hour when the going rate is $250 per hour, then I have likely breached my duty to the church. In that case, I would no longer be operating in a way that could be seen as both mutually and independently beneficial to both parties. Instead, I am sacrificing one party’s best interest (the church) for the interests of the other party (the law firm).

Q. A pastor is elected to serve on the board of his state association of churches. One of his assignments on that board is to evaluate the camps the state association sponsors to confirm they are conducting themselves in a proper manner and worthy of the state association’s endorsement. That same pastor also serves on the board of one of the camps the state association sponsors. Is there a conflict of interest?

A. Yes. Why? The pastor has a duty to the state association to provide an honest analysis of the camp. He also has a duty to the camp to promote and advance its mission. Many may fail to initially see the conflict. However, in evaluating potential conflicts of interest, it is often helpful to think of the worst-case scenario. For example, what if the camp had recently uncovered that one of its counselors was a convicted sex offender? Would there be a conflict then? The board of the camp may want to handle that situation internally (i.e., remove the person from the payroll) but try to avoid that information becoming public. The state association would definitely have an Interest in knowing this before it recommends to parents that they send their kids to the camp. What should the pastor/board member do? This example demonstrates the value in seeing conflicts of interest earlier rather than later. When the state association was handing out assignments, the pastor should have made his duty to the camp known and recused himself from any committee evaluating any camp. Could that pastor serve on the committee as long as he didn’t evaluate his own but did evaluate other camps? He should not. If there is more than one camp, they are likely in competition, or at least perceived to be in competition by others. Thus his evaluation of other camps could be, or at least be accused of being, compromised.

Discussion Questions

1. Should a pastor disclose that he is on the board of a mission agency before advocating that his church financially support that particular agency?
2. If a pastor is counseling multiple members of the same family, should he disclose those counseling relationships to all parties involved? Should he suggest at least one of those family members obtain counseling somewhere else?
3. What conflicts of interest might arise for a church leader who is acting as executor or power of attorney for a church member whose family members are also part of the church?
4. What conflicts of interest might arise for a pastor who accepts significant gifts from a church member?

Kevin Vanderground (JD, Valparaiso University Law School) is an attorney practicing in northern Indiana, and a member of Faith Fellowship Church, a GARBC church in Valparaiso, Ind. He is also an adjunct professor at Grace College and serves on the board of Faith Community Foundation, Des Moines, Iowa.