The Commission says that it is seeing ‘too many’ cases of unmanaged conflicts of interest, and is keen to reassure trustees that declaring such conflicts doesn’t mean assuming the worst, but is about protecting both the trustee and the charity.
It recently released updated guidance on this issue, which sets out in detail what might constitute a conflict of interest, and how to go about managing one when it does occur. The guidance says that ‘identifying and properly managing conflicts means you can show that you are complying with your legal duties, despite the existence of a conflict of interest’.
There are essentially two types of trustee conflict of interest:
Financial conflicts, where a trustee (or a person or organisation connected to them) could receive money – or something else of value such as a service – as a result of a decision that trustees make.
Loyalty conflicts, where the decision a charity makes may conflict with a trustee’s responsibility to another person or organisation.
The guidance sets out a five step approach to managing any conflict of interest:
1. Identify the conflict
2. Declare the conflict
3. Consider removing the conflict
4. Managing the conflict
5. Recording the conflict
All charities should have a conflict of interest policy; the Commission suggests that the template provided by the Chartered Government Institute may be suitable, or can be adapted.
The updated guidance can be found here.