QUESTION: I have a sensitive question to ask, and I am changing some of the details of what actually happened so as not to upset or embarrass anyone. The Board of Directors of a charitable organization is planning a fundraiser and one of its board members suggested that an item that the company needs to purchase should be purchased from his own company. It appears that this purchase is likely going to happen, and I know that this board member’s company stands to make a significant profit on the deal. This bothers me and I do not think very highly of this charitable organization anymore. Am I overreacting or am I right to feel the way that I do?
ANSWER: The situation you describe is problematic and you are right to feel the way that you do. There is a fascinating Aruch HaShulchan that writes (Choshen Mishpat 9:1): “Not only is a judge forbidden from accepting bribes, but also all appointees and all those who deal with public needs, even though their decisions are not Torah law, are forbidden from tilting matters due to love or hate, and certainly through accepting bribes."
Board members and executive directors have a fiduciary and Halachic obligation to place the institution that they are entrusted to represent, ahead of their own interests. One could possibly argue that, in the long run, it is better for the organization not to alienate the wealthy and influential board member and therefore permit the sale to go through to his company, but the question should be raised to a competent Posaik (Halachic authority) for a definitive ruling. Certainly, the board member himself should not engage in this behavior and use his board seat to steer purchases to his own company.
