Conflict of Interest
Conflict of Interest for Board Members will arise because we all have connections/ lives - it is normal. The key is to identify, declare, document and manage both real, potential perceived conflicts of interest in a transparent, prudent manner.
A conflict may exist because of:
- Personal interests, particularly re personal gain or the potential for personal gain
- Organisational interests, particularly where the same matter is being considered within a different organisational setting
- Other commitments or arrangements individuals have, within and outside the organisation
- Family interests.
An example: A Board Member's brother's company is being considered by the organisation to undertake work.
- The Conflict of Interest should be declared in the Minutes and on the Interests Register
- A fair / transparent selection process be put in place e.g. tender process and criteria for selection established
- The Board Member removes themself from the room (noted in Minutes) during any discussions, decisions relating to this work appointment.
Sometimes a Board Member may have a pre-existing conflict and only realise this when a matter is raised in a meeting or after a meeting. As soon as it is recognised he or she should advise the Chair.
It is suggested that calling for declaration of any Conflicts of Interest becomes part of the standard meeting opening and these are documented in the Minutes and register.
Specific Measures that a Board / Committee may choose to adopt:
Process 1: The Chair gives members the opportunity at the start of each meeting to declare any conflict or raise any concerns regarding potential conflict that have arisen or may arise in tackling the agenda for that meeting.
Process 2: On being advised of a potential conflict, the Chair acting on the advice of the Board decides whether:
- A conflict exists, and it is substantial enough to act upon
- Whether the member needs to step out from the meeting / discussion or refrain from voting
- Any other action needed - noting it is worth being on the safe side.
- Actions must be documented in the Minutes for transparency.
Process 3: For ongoing matters where a Board Member has a conflict, the Chair needs to make appropriate arrangements with the member and others to ensure there is no impact from the conflict.
This is recorded in the minutes each time. If the discussion of a conflict of interest involves the Chair, then a Temporary Chair needs to be appointed by the rest of the Board to manage the discussion.