Conflict Of Interest Policy
Last revision: 07/05/2021
Conflict of Interest Policy
This policy applies to Trustees, Management Committee members and any future employees.
Why we have a Policy
Trustees have a legal obligation to act in the best interests of Irish Heritage (IH), and in accordance with the IH’s governing documents, and to avoid situations where there may be a potential conflict of interest, or a perceived conflict of interest. It is therefore fundamental that Trustees understand the scope of their responsibility in relation to disclosing and managing conflicts of interest.
Conflicts of interest can arise where there is a conflict between the interests of IH and either a Trustee’s personal interests (including business or family interests/loyalties) or those of another body with which the Trustee is involved. Such conflicts may pose a risk that Trustees will make decisions based on these external influences, rather than in the best interests of IH. This could damage the integrity and reputation of the IH as well as the Trustees’ own reputation. The most common dangers arising out of a conflict of interest are:
- Poor decision-making
- Legal challenge
- Loss of trust within the boardroom
- Reputational damage
The purpose of this policy is to protect the integrity of IH’s decision-making process, to enable stakeholders to have confidence in the organisation’s integrity, and to protect the integrity and reputation of Trustees, members of the Management Committee and any future employees.
Where a Trustee has a material conflict of interest in respect of a matter to be discussed, or voted on, by the Board the Trustee may not participate in the discussion of, or vote in respect of, that matter. Any perceived conflict of interest which has been declared by a Trustee will not necessarily exclude that Trustee from discussion or decision-making.
It will be the responsibility of the Chair of the Board to proactively address and manage actual and perceived conflicts of interest amongst the Trustees.
Directors’ Statutory Obligations
Directors’ statutory obligations regarding conflicts of interest are set out in the Companies Act 2006 (for the avoidance of doubt the term “Director” includes Trustees who have been properly appointed by the charity/company).
These rules can be summarised as follows:
- A director must avoid a situation where he has or can have a direct or indirect interest that conflicts or possibly may conflict with the interests of the company.
- A director must declare an interest in a proposed transaction or arrangement.
- A director is required to declare an interest, whether it is direct or indirect, in an existing transaction or arrangement into which the company has entered.
- A director is not allowed to accept benefits from third parties unless the benefit “cannot reasonably be regarded as giving rise to a conflict”.
Formal Declaration of Interest
Trustees, members of the Management Committee and any future employees should declare any perceived or real conflict of interest at the earliest opportunity using the Declaration of Interest Form.
They should also declare any gifts, hospitality or other benefits received in connection with their role in IH.
In the case of Trustees there will be a standing item on the agenda of each Board meeting for the declaration of new or altered interests. Trustees should ensure that the Declaration of Interest Form is either submitted at a Board meeting or alternatively submitted to the Finance Director and then formally received at the next Board meeting.
To be effective, the Form needs to be updated immediately when any change occurs and be reviewed annually. For instance a Trustee needs to be careful if an interest which was declared as a situation which might possibly result in a conflict develops into a proposed or actual transaction to ensure that the declaration set out in the Form is still accurate.
If you are not sure what to declare, or whether/when your declaration needs to be updated, please err on the side of caution. If you would like to discuss this issue, please contact the Finance Director and Treasurer for confidential guidance.
Interests will be recorded in the IH Register of Interests, which is maintained by the Finance Director and Treasurer.
A Trustee may not participate in the discussion of, or vote in respect of, a matter in which they have a material conflict of interest.
Approval of Director’s Interest by the Board
Any interest declared by a Trustee to the Board must be approved by the Board in accordance with the procedure adopted by the Board. Approval must be given using a formal Board resolution. The relevant Trustee must leave the Board meeting during the discussion of her/his interest and the voting on the resolution. A quorum must be present for the discussion and decision and the interested Trustee will not be counted when deciding whether the meeting is quorate. An interested Trustee may not vote on this approval. The Board will, when appropriate, direct how the relevant conflict will be managed in the future.
All decisions approving a conflict of interest will be recorded by the Finance Director and reported in the minutes of the meeting. The report will record:
- The nature and extent of the conflict;
- An outline of the discussion;
- The actions to be taken to manage the conflict.