Nonprofits are governed by the Non-Distribution Constraint .....meaning that board members cannot materially benefit from the operations of the organization. So do your conflict of interest policies explicitly state that Board Members cannot do business in any shape or form with the organization? Board Members can't be your landlord, they can't be your consultant they can't be your supplier.
|It's a GIANT Red Flag|
Finally, don't do it because it's just not right. Your Board members should be serving in order to help advance your mission. Business dealing change the nature of the relationship between the Board member and the organization. It also puts one on a slippery slope that can lead to more fraudulent activities.