Conflicts of Interest

Conflict of Interest

We value open, honest and ethical decisions and actions.

A conflict of interest occurs when a person may need to choose between their own interests or responsibilities (and those of friends, family and personal, business or charity connections) and the interests or needs of the charity. This includes where there is a decision or action that may result in an actual or potential benefit. The benefit may be financial, but it can take another form.

Under Victorian law, a conflict of interest only involves financial matters. However, directors may have a moral or ethical responsibility to disclose and manage any conflict of interest.

When a conflict of interest occurs, there is a risk that a person may make a decision or take an action that is not in the best interests of the charity.

Even a potential conflict of interest may cause damage to public confidence in the board and to the reputation of individual directors, including those not directly involved in the conflict.

Directors need to do their best to avoid even the perception of a potential conflict of interest. Conflicts of interest are common and will occur. It is important to disclose them and manage them well.

Diverse Board

A diverse Board, representing a range of backgrounds, views and interests, leads to more effective decision making and minimises the potential impact of conflicts of interest.

Gifts

All substantial gifts in connection with a role as a Director, monetary or otherwise, with a value of more than $50, shall be returned or refused. Gifts may be given to the organisation rather than the Director.

Director Responsibilities

The number one duty of a Director is to act in the best interests of the organisation. To ensure that conflicts of interest are managed legally and ethically, board members will:

  • Be aware of the ACNC governance standards (particularly standard 5)
  • Avoid conflicts of interest where possible
  • Consider whether a decision is made based on what will lead to the best outcomes for I Matter Foundation
  • Treat potential or perceived conflicts of interest as a conflict of interest
  • Check the agenda prior to any meting and declare any conflicts of interest prior to discussion
  • Record a conflict of interest on the conflicts of interest register
  • Raise a conflict of interest with the board
  • Provide information about the conflict of interest and how it may impact your role as a director
  • Avoid any informal discussions that might influence fellow directors on the matter
  • Ensure that the conflict of interest, and the steps taken to manage it, are recorded in the minutes of the meeting
  • Follow this policy
  • Review this policy on an annual basis

Managing a Conflict of Interest

When a conflict of interest has been raised with the board, then the members that are not involved or affected by the conflict of interest will decide if the affected/involved board member(s) should:

  • Vote on the matter
  • Participate in any debate
  • Be present in the room during the debate and voting

If all directors share the same conflict of interest, then the matter must be disclosed to the members at the next general meeting. If a general meeting is not scheduled in the near future, then the matter should be disclosed to members earlier than the next general meeting.

The board members not affected by the conflict of interest will vote. Decisions will be made based on agreement by the majority of those voting. The results will be recorded in the minutes of the meeting and the conflicts of interests register.

Major Conflicts of Interest

In exceptional circumstances, such as where a conflict is very significant or likely to prevent a board member from regularly participating in discussions, the board will consider if it is appropriate for the conflicted board member to resign from the board. The board will also consider if it is necessary to seek legal advice on the matter.

Matters to Consider

  • Does the conflict need to be avoided or simply documented?
  • Will the conflict impair the board member’s ability to be impartial?
  • Alternative options to avoid the conflict
  • The charity’s objectives and resources
  • Maintaining the legal and ethical responsibilities of the charity
  • Maintaining the appearance of responsible, legal and ethical governance of the charity