Protecting public trust by managing potential conflicts of interest

‘A situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity’ is defined as a conflict of interest.’

Trustees have a duty to act in the best interests of their charity. In order to comply with their duty and avoid risking their charity’s reputation, trustees should follow the 3 step approach:

1.  Identify a conflict of interest

2.  Deal with a conflict of interest

3.  Record a conflict of interest

If you’re a trustee, a conflict of interest would arise if the charity was thinking of making a decision that would mean:

You could benefit financially or otherwise from your charity, either directly or indirectly through someone you’re connected to

Your duty to your charity competes with a duty or loyalty you have to another organisation or person.

Conflicts of interest are common in charities – having a conflict of interest doesn’t mean you’ve done something wrong. But you need to act to prevent them from interfering with your ability to make a decision only in the best interests of the charity. Sometimes, the only course of action is to remove yourself from the decision making process and let the other Trustees decide.

It’s the responsibility of each trustee to declare conflicts of interest. The easiest way to remind trustees of this is to add it as an agenda point.

Conflicts can be avoided by:

Not pursuing a course of action

Proceeding with the issue in a different way

Either not appointing a particular trustee or obtaining a trustee resignation

Any potential conflicts should be clearly recorded in the minutes detailing the conflict itself and how it was dealt with.  Any trustee benefits arising must be disclosed in accruals accounts.

Further information can be obtained from the Charity Commission guidance - Conflicts of interest: a guide for charity trustees (CC29). If you would like a copy of our conflicts of interest register, please contact a member of our charities team.

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