Guide to managing conflicts of interest and related party transactions in UK charities. Ensure transparency and protect your charity's reputation.
Conflicts of interest arise when personal interests conflict with the interests of the charity. Managing these properly is essential for good governance and maintaining trust.
Trustees must act in the charity's best interests. Where a conflict exists, it should be declared, managed, and recorded. In serious cases, the affected person may need to withdraw from discussions.
Related party transactions require particular care. These are transactions with trustees, connected persons, or businesses in which trustees have an interest. Such transactions must be properly authorised and disclosed.
Have a register of interests and require trustees to declare conflicts at the start of each meeting. Update declarations annually and when circumstances change.
Establish procedures for managing conflicts. The affected person should not vote or be counted in quorum. Consider independent assessment for significant transactions.
Record all declarations and how conflicts were managed in meeting minutes. This provides evidence of proper governance and protects trustees.
Transactions with related parties must be properly authorised, at market value, and disclosed in accounts. Seek professional advice for significant transactions.
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