Ethical Behaviour

Model Conflict of Interest Policy

What is a conflict of interest and what issues does it raise?

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 and loyalties of trustees or employees or volunteers do not coincide or appear to clash. A code of conduct makes the charity’s intentions clear and provides guidance on what standards of behaviour are expected. It should be reviewed annually or as the need arises.

Employees, volunteers, trustees nor their friends and family should not be favoured especially in terms of service, employment or funding.

Trustees staff and volunteers have a legal obligation to act in the best interests of the charity, and in accordance with its governing document.

Such conflicts may create problems; they can:
• inhibit free discussion;
• result in decisions or actions that are not in the interests of the charity; and
• risk the impression that [the charity] has acted improperly.

Even the appearance of a conflict of interest can damage the charity’s reputation, so conflicts need to be managed carefully and with transparancy.The aim of this policy is to protect both the organisation and the individuals involved from any appearance of impropriety.

What does the law say about conflicts of interest regarding trustees?

The law states that trustees cannot receive any benefit from their charity in return for any service they provide to the charity unless they have express legal authority to do so. This legal authority will come either from a clause in the charity’s governing document or, where there is no adequate clause in the governing document, from the charity commission or the Court.

It is acceptable to repay reasonable out of pocket expenses to trustees. Any costs that are necessary to allow a trustee to carry out his or her duties as a trustee can be classed as expenses and recovered from...