Nonprofit Director Conflict Transaction Approval Rules in Kansas
At a glance
| Governing act and covered transactions | Kansas general corporation code; contracts with director/officer or organization where either has a listed role or financial interest (§§ 17-6014(a), 17-6304(a)) |
|---|---|
| Interest and related-person trigger | Direct director/officer contract, or other-party organization where director/officer is director, officer, or financially interested (§ 17-6304(a)) |
| Disclosure and knowledge | Relationship/interest and transaction material facts disclosed or known to board/committee for its route (§ 17-6304(a)(1)) |
| Board or committee approval | Good-faith authorization by majority of disinterested directors, even below ordinary quorum (§ 17-6304(a)(1)) |
| Member approval and vote | No § 17-6304(a)(2) member safe-harbor route for nonprofit nonstock corporations (§ 17-6014(c)(2)) |
| Fairness route and time | Fair to corporation when board, committee, or members authorize, approve, or ratify (§ 17-6304(a)(3), § 17-6014(a)(1)) |
| Interested participation and quorum | Interested presence, participation, or counted vote alone does not defeat protection; interested directors count toward meeting quorum (§ 17-6304(a)–(b)) |
| Burden, effect, and separate authorization | Not void or voidable solely for listed interest or participation grounds; ordinary board action follows separate governance rule (§§ 17-6304(a), 17-6301(a)–(b)) |
| Special coverage and later changes | Nonprofit nonstock exclusion specifically removes § 17-6304(a)(2)'s stockholder route (§ 17-6014(c)(2)) |
Requirements one by one
Covered people and transactions
Section 17-6304(a) covers contracts with a director or officer and contracts with another organization in which one of them is a director, officer, or financially interested. Under § 17-6014(a)(1)–(3), the general corporation code applies to nonstock corporations, with governance terms translated to the governing body and its members, subject to stated exceptions.
Board approval and fairness
For the board or committee route, § 17-6304(a)(1) requires good-faith authorization by a majority of disinterested directors after material facts about the interest and transaction are disclosed or known. That majority may be fewer than an ordinary quorum. The independent route in subsection (a)(3) asks whether the transaction is fair to the corporation when authorized, approved, or ratified.
What trips people up
The apparent stockholder route in § 17-6304(a)(2) does not carry over to a nonprofit nonstock corporation: § 17-6014(c)(2) expressly excludes it. Section 17-6304(b) separately permits interested directors to count toward a board or committee meeting quorum. A conflict approval threshold and the ordinary board action requirements in § 17-6301(a)–(b) address different questions.
Common questions
Does an officer's interest count under this rule?
Yes. Section 17-6304(a) expressly includes contracts with officers and other organizations in which officers have the listed roles or financial interests.
Does the safe harbor make every aspect of the contract valid?
Section 17-6304(a) addresses whether the contract is void or voidable solely for the listed interest or participation grounds. Other authorization requirements still follow the code and governing documents, including § 17-6301(a)–(b) for ordinary board action.
Statutes and sources
- Kan. Stat. § 17-6304(a)–(b): interested director and officer transactions, approval, fairness, and quorum. Official section, accessed 2026-10-02.
- Kan. Stat. § 17-6014(a), (c)(2): nonstock application and nonprofit exclusion of the stockholder route. Official section, accessed 2026-10-02.
- Kan. Stat. § 17-6301(a)–(b): ordinary governance and board voting. Official section, accessed 2026-10-02.
Source links
Every statute quoted above, linked, with the date we checked it.
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