Principle 6

Dealing with conflicts of interest

Members of the management committee/board should identify and promptly declare any actual or potential conflicts of interest affecting them, including conflicting loyalties which may arise when members are appointed as representatives of other organisations.

(Supporting principle to Principle 6 of the Code of Good Governance)

A conflict of interest arises when the interests of a member of the management committee/board are in conflict with the interests of the organisation they are helping to govern. This can be direct, in relation to the interests of the individual, or indirect, in relation to the interests of a close relative or business partner.

Organisations need to show that they are dealing with conflicts of interest which will arise from time to time. For more information on conflicts of interest please see the NICVA Advice Note on Conflicts of Interest.

Statutory obligations of limited companies

Under the Companies Act 2006, the company directors of all limited companies have a statutory obligation to avoid conflicts of interest and to declare them where they exist. This specifically prohibits accepting benefits from third parties and obliges directors to declare any interest in proposed transactions with the company.

NICVA's Advice note on Running a charitable company provides up to date guidance on both new and existing obligations relating to conflicts of interest.  Or click here for further guidance on Company Law and recent legislative changes.