conflicts of interest
Organisations need to agree in advance whether or not it is acceptable for members of the management committee/board, staff or volunteers to receive gifts from services users, suppliers, customers or anyone else connected with the work of the organisation.
In general it may be allowable to receive a one off token gift but where something of more value or a regular gift it may be unacceptable. The key issue is to ensure this is agreed in advance and that everyone is clear about the rules, which are in place.
Independance of decision making is important for a board to ensure that it is complying with its governing document. The board must put the best interests of the organisation first in all its decision making and effectively manage conflicts of interest.
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.
Principle 5 - An effective board will provide good governance and leadership by behaving with integrity and by being open and accountable
The board will be open, responsive and accountable, acting at all times with integrity, in the interest of the organisation and its beneficiaries. The board will:
This has a number of implications which you should be aware of:
1. Duties of Company Directors
Since October 2007, there are now statutory duties of company directors, under the Companies Act 2006. All Management Committee members need to be aware of their duties to:
This guide is designed to help organisations identify how to avoid conflicts of interest and how to act appropriately if a conflict of interest does develop. Published by NICVA.
Click here for more information or to download.
Remember! Company directors have a statutory obligation to avoid conflicts of interest. For more advice click here.
Employees, volunteers and trustees should all put the interests of the charity first. A conflict of interests may arise where the objective of the organisation and the interests of management committee members or employees or volunteers do not coincide.