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Managing conflicts of interests

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Use this page to understand what conflicts of interest are and how to work through them.

A conflict of interest is any situation in which a trustee's personal interests or loyalties could, or could be seen to, prevent the trustee from making a decision only in the best interests of the charity.

(Source: Charity Commission guidance CC29)

Understanding conflicts of interest

Trustees have a duty to act in the best interest of their charity.

A conflict of interest, or conflict of loyalty, is any situation where a trustee's personal interests or interest they owe to another person or body may influence a trustee’s decision making.

A perceived conflict of interest is where an interest which a trustee has could be seen to influence their decision, even if it doesn’t. It’s important to recognise where conflicts might be perceived, even if you feel confident won’t affect your decision. If a situation looks like a conflict of interest, it’s best to treat it as one.

There may be situations in which a trustees' loyalty to the charity conflicts with their loyalty to:

  • the body which appointed them
  • another charity of which they are a trustee
  • a member of their family.

Such conflicts of loyalty will not stop anyone from being a trustee, but they can cause conflicts of interest, or perceived conflicts of interest.

Raising a conflict

As soon as you’re aware of a conflict, actual or perceived, you should raise this with your board.

Some interests may not present a conflict straight away, but trustees should still declare their key interests regularly. For long term interests, such as joining a new organisation as an employee or director, the interest should be declared and included in your organisation register of interests.

If you have a short term interest or a conflict of interest, such as having a contract with a supplier for a single project and finding that supplier is also being considered by your board, you should declare that interest at the start of any meeting or discussion relating to the area of conflict.

Managing conflicts in decision-making

Having a conflict of interest doesn’t always mean a trustee shouldn’t be involved in decision-making. However, it’s the duty of the board to make sure conflicts are managed properly so decisions taken by the board are balanced and not influenced by private interests.

When a trustee declares a conflict of interest, the board should collectively agree on how to manage this, in line with the conflict of interest policy.

If the conflict is low risk, and the trustee is able to meaningfully contribute, the board may choose to note the interest of that trustee formally in the minutes, but allow them to participate in the discussion. The trustee may be excluded from any voting that takes place.

If the conflict is high risk, and the trustee is unable to participate without being influenced (or if it might be seen that way by an outside observer), the board should ask the trustee to step away from the discussion.

Where a conflict regularly prevents a trustee from participating in decision-making, the board should consider reviewing that trustee’s position and making sure they’re still able to carry out their role. If they’re not able to fully contribute, they may be asked to step down.

Last reviewed: 29 April 2022

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This page was last reviewed for accuracy on 29 April 2022

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