MONTALVO ARTS CENTER

Ethics Code for Board of Trustees

INTRODUCTION

Montalvo Arts Center (“Montalvo”) is committed to operating in a manner consistent with its
mission and its high ethical values. Through its personal attention to mission, setting of
informed policy, exercise of prudent oversight, and sensitivity to conflict of interest situations,
Montalvo’s Board of Trustees ensures that Montalvo serves its public with integrity and instills
its public with confidence. In support of these objectives the following Ethics Code has been
enacted.

MISSION STATEMENT

Montalvo’s mission is to foster community engagement through the creation and presentation
of multidisciplinary art, uniting the broadest possible audiences with a global community of
artists.

GENERAL PRINCIPLES

In carrying out its mission as a not-for-profit organization and its commitment to being a good
steward of the resources it holds in the public trust, Montalvo adheres to the following general
principles:

Trustees owe a duty of loyalty to Montalvo and its mission, and must work for the
betterment of the institution as a whole. They are expected to carry out their
responsibilities legally, ethically and effectively.

Trustees must never act for their own personal gain at the expense of Montalvo, its mission
or reputation. Conflicts of interest – whether actual, potential or perceived – are handled in
accordance with Montalvo’s Conflicts of Interest policy which is set forth in more detail
below.

Montalvo’s policies are plainly articulated, prudently implemented and routinely re-
evaluated in light of evolving laws and standards of conduct. There is reasonable
education, oversight and enforcement of those policies.

Approved May 13, 2010

 Montalvo’s operations are guided by professional standards and practices. Policies are in
place and enforced to protect, maintain and develop Montalvo’s valuable resources.

Montalvo seeks to present programming and educational activities that are informative,
responsive to the public’s needs and in furtherance of its mission.

Montalvo is committed to accountability and integrity in its financial statements and record
keeping, and reasonable transparency in its operations.
The Board of Trustees shall adopt policies for the physical security and preservation of
Montalvo’s facilities and grounds, as well as the monitoring and development of Montalvo’s
financial structure, so that it continues to exist as an institution of vitality and quality.

SPECIFIC POLICIES

Conflict of Interest

Montalvo’s Board of Trustees is in a position of great trust and responsibility and must be loyal
and committed to the mission of Montalvo. Decisions must be made in the best interest of
Montalvo, without regard to personal interests.

Generally, a conflict of interest may occur if an interest or activity influences or appears to

influence an individual’s objective judgment or impairs or appears to impair the individual’s
ability to perform his or her responsibilities in the best interests of Montalvo. Thus, a conflict of
interest arises whenever a Trustee has personal or professional interests that are potentially at
odds with the interests of Montalvo. The interest does not have to be direct, tangible or
financial. It may be indirect or intangible, such as a desire to help a friend or relative by
sending them Montalvo business. Competing interests are problematic because they have the
potential to cloud one’s independent professional judgment – or appear to do so – even if one
is attempting to act objectively.

An individual is considered to have a potential conflict of interest when:

• He or she or any member of his or her immediate family1 may receive a financial
or other significant benefit as a result of the individual’s position at Montalvo;

1
Immediate family member of an individual is defined as the following, whether established by blood,
marriage, or other legal action: spouse, parent, child, step-child, sibling, aunt, uncle, niece, nephew, first
cousin, grandparent, great-grandparent, grandchild, great-grandchild, father-in-law, mother-in-law, sister-
in-law, brother-in-law, son-in-law, daughter-in-law, other family members living in the same household as
the individual, or a live-in domestic partner (including but not limited to domestic partners registered under
California law), and the spouses of any of the above.

Approved May 13, 2010

 • The individual has the opportunity to influence Montalvo’s artistic, business,
administrative, or other decisions in a manner that leads to personal gain or
advantage;

• The individual has an existing or potential financial or other significant interest

which impairs or might appear to impair the individual’s independence in the
discharge of his or her responsibilities to Montalvo.
Transactions involving a conflict of interest are not necessarily illegal. They may be acceptable
so long as they benefit Montalvo and the decisions are made in an informed and impartial
manner. For example, if a vendor is highly regarded in its field, and charges rates consistent
with its competitors, but happens to be owned by the spouse of a Montalvo employee, the
vendor/spouse could be hired – provided the disclosure and approval procedures below are
followed. Those procedures are designed to make sure that individuals with a personal
interest or bias disclose that fact, remove themselves from the decision-making process, and
leave the decision in the hands of objective parties, ensuring that the decision is in the best
interest of Montalvo rather than any individual person.

On the other hand, failure to disclose potential conflicts and to follow the procedures below
could lead to biased decision-making that is not in the artistic, financial or reputational best
interest of Montalvo. There can be severe consequences to Montalvo based simply on the
appearance of bias or impropriety – including loss of public confidence, damage to Montalvo’s
reputation, loss of financial support and legal challenges. Accordingly, it is imperative that
conflicts of interest, whether actual, potential or perceived, are handled appropriately and in
accordance with the procedures below. Failure to abide by the restrictions and procedures
below is grounds for disciplinary action, up to and including dismissal of the Trustee from the
Board.

The first step in handling conflicts – real, potential or perceived – is disclosure of the conflict by
the party with the conflict. The burden is on that party to come forward and identify the conflict
in writing. Trustees shall disclose conflicts to the President of the Board. Disclosure of the
activity or relationship at issue allows a determination of whether an actual, potential or
perceived conflict of interest may exist, and if so, Montalvo’s position with respect thereto. The
disclosure must be made as soon as an actual, potential or perceived conflict of interest
becomes apparent. In addition, Trustees shall be required on an annual basis to complete and
submit Montalvo’s Trustee Annual Conflict of Interest Statement.

Upon receiving written notice of a conflict or potential conflict, the President of the Board shall
document (or cause to be documented) in writing any steps taken by Montalvo to address the
conflict situation.
Certain activities are absolutely prohibited when there is a conflict, while other activities are
permitted so long as the appropriate disclosure and approval steps are followed.

Transactions with Montalvo

Approved May 13, 2010

In general, no Trustee or member of their immediate family may sell goods or provide services
to Montalvo. Similarly, they may not have a significant interest, management or policy-making
role, directly or indirectly, including but not limited to interests as an owner, stockholder,
partner, joint venture, creditor or guarantor, in any organization, firm or other entity which sells
goods or provides services to Montalvo.

Exceptions may be made on a case-by-case basis if the following procedures

are followed:

(i) The trustee discloses, in writing, his/her interest (or family member’s interest) in
the proposed activity or transaction.
(ii) The trustee may answer questions but must leave a meeting prior to any
detailed discussion, final decision-making or vote with regard to the proposed
transaction.
(iii) The transaction, viewed objectively, is in the best interest of Montalvo, makes
good business sense and includes terms (including price) that are fair,
reasonable and consistent with prevailing market rates and practices.
(iv) The transaction is approved, in writing, identifying the date of approval and the
name(s) of the disinterested parties who approved the transaction. The
approval should document the basis for determining that the criteria in section
(iii) are met. The transaction must be approved by a majority of disinterested
Trustees.

Approved May 13, 2010

Gifts and Entertainment

Gifts from artists, performers, contractors, suppliers, vendors, or others who are doing or
seeking to do business with Montalvo raise the possibility that one’s judgment may be
influenced by factors unrelated to the merits of the particular decision or the best interests of
Montalvo. Accordingly, accepting gifts or items of entertainment, other than those of
insignificant value (defined as those of a value of $50 or less) from those doing or seeking to
do business with Montalvo is prohibited.

Use of Non-Public Information Prohibited

A Trustee should not take advantage of information he/she receives during service to Montalvo
if the Trustee's use of such information could be harmful to Montalvo in any manner. If a
Trustee obtains information during service to Montalvo that could benefit him/her personally,
and the use of such information would be innocuous to Montalvo, he/she must disclose that
information to the President of the Board and refrain from acting upon it until the President
determines that any issues pertaining to the matter have been reviewed and resolved by the
Board of Trustees.

Use of Montalvo Assets Only in Manner Available to General Public

No Trustee shall use Montalvo’s facilities, assets, property or services for personal purposes,
except in a manner in which such facilities, assets, property or services are made available to
a member of the general public.

Avoiding Appearance of Montalvo Involvement or Endorsement

Whenever a Trustee is engaged in non-Montalvo activities, he or she must avoid giving the
impression that Montalvo is sponsoring, endorsing, participating in or otherwise officially
involved in the activity. Where there is any potential for ambiguity, the Trustee should make it
clear that he/she is not acting as a representative of Montalvo.

Political Activity

Montalvo has the benefit of being exempt from most Federal and State income taxes as a not-
for-profit charitable and educational organization under Section 501(c)(3) of the Internal
Revenue Code. As a result of that special tax status, certain restrictions are imposed on
Montalvo. It is very important that trustees acting on behalf of Montalvo do not inadvertently
act in a way that could jeopardize its tax-exempt status.

Approved May 13, 2010

One of the most important conditions that the Internal Revenue Code imposes on Montalvo is
a limitation on certain types of political activity. Specifically, campaigning for or against a
political candidate is forbidden and any lobbying, though not forbidden, must be limited to
insubstantial amounts.

•Political Campaigns. Trustees are absolutely prohibited from campaigning for or against a
political candidate on behalf of Montalvo. Moreover, while personal campaign activities are of
course permissible, they should not be conducted in a way that suggests Montalvo itself is
supporting or opposing the candidate, or that intentionally creates confusion as to whether
Montalvo is supporting or opposing the candidate.

•Lobbying. Trustees may not undertake lobbying efforts on behalf of Montalvo without the
written approval of the Executive Director. Moreover, they should not engage in personal
lobbying efforts in a way that suggests Montalvo itself advocates a certain position or that
intentionally creates confusion as to whether Montalvo officially supports the lobbying effort.

Affiliation with Other Institutions

A Trustee may be affiliated with other non-profit or for-profit institutions in varying capacities
such as that of a trustee. Trustees shall disclose any affiliation which may present a potential
conflict of interest. Should conflicts develop, the Trustee must abstain from any further
discussion, active participation, or votes on such matters.

Confidential Information

Trustees have access to confidential and proprietary information regarding Montalvo, its
business partners, members, donors, artists and others. Trustees shall use such information
solely for the purpose of performing services in their role as a Trustee, and shall not use such
information for a personal purpose or for personal gain.

Montalvo’s confidential and proprietary information may not be shared with others outside
Montalvo, including, but not limited to, the media. Montalvo Trustees must exercise diligence
and best judgment at all times in order to avoid any inadvertent or improper disclosures.

Confidential and proprietary information includes but is not limited to that related to artistic,
exhibition, literary, technical, financial or business information. Some examples include:
membership lists; donor names, personal information or gift amounts; personnel or human
resources information; strategic plans of Montalvo; or any other information that is not
generally known or made available to the public.

At the conclusion of a Trustee’s term in office or upon resignation from the Board (whichever
occurs first), Trustees shall return to Montalvo, or if appropriate destroy (and certify in writing
detailing the destruction methods used, the date of destruction and the party that performed

Approved May 13, 2010

the destruction), all documents, papers and other materials, regardless of the medium, which
may contain or be derived from confidential or proprietary information, in his/her possession.

THE TRUSTEE - EXECUTIVE DIRECTOR RELATIONSHIP

Trustees have an obligation to define the rights, powers and duties of the Executive Director.
They should work with the Executive Director, who is their chief executive officer, in all
administrative matters and deal with him/her openly and with candor. The relationship
between Executive Director and the Board must reflect the primacy of institutional goals over
all personal or interpersonal considerations.

The Trustees must act as a full Board in appointing or dismissing an Executive Director. The
Executive Director may be dismissed only by an affirmative vote of a majority of the sitting
Trustees.

The Executive Director has an obligation to bring before the Board any matters involving policy
questions not already determined and to keep them informed on a timely basis about all other
significant or substantial matters or intended actions affecting the institution. The Executive
Director must carry out the policies established by the Trustees to the best of his/her abilities
and adhere to the budget approved by the Board. Whenever it is necessary to deviate from
established policies or to alter or exceed budget guidelines, the Executive Director should
notify the Board in advance and request appropriate approval.

IMPLEMENTATION
To implement this Ethics Code, a copy shall be furnished to each Trustee who currently serves
Montalvo. In addition, each new Trustee shall be provided with a copy of the Ethics Code
upon starting. Thereafter, each Trustee shall be furnished a copy of this Ethics Code on an
annual basis. Trustees will be required to sign an acknowledgment that they have received,
reviewed and will abide by this Ethics Code. Moreover, Trustees will be required to complete
an annual Conflict of Interest Questionnaire.

UDPATES
This Ethics Code is to be reviewed and updated from time to time as appropriate. Each
update shall require the approval of the Board of Trustees in accordance with Montalvo
Bylaws.

Approved May 13, 2010