CONFLICTS OF INTEREST – SHORT GUIDE

Defining the problem Conflicts of interest: Includes not just financial conflicts, and can arise in many other ways, especially through friendships and family relationships, and May arise because of a pecuniary or personal interest or because of some element of bias or predetermination in the mind of a decision-maker. Bias is a type of conflict of interest: Describes a situation where a decision-maker may not have an open mind on or may have predetermined an issue, and May be presumed where there is real possibility of bias, or may be clear from the behaviour of a decision-maker, noting that The actual motives and good faith of the decision-maker are not relevant. Predetermination is a type of bias: Describes situations where the decision-maker has (or might be considered to have) a “closed mind” and is therefore unable to come to an issue willing to be influenced by facts or logic to make a decision either way. Personal or financial interests: If a decision-maker has any personal or financial interest greater than other decision-makers that person may be considered to be biased or to have pre-determined the issue.   Declaring an interest or standing aside Where a decision-maker has a conflict of personal or financial interests, and therefore is or might be biased: The person should “declare an interest” or stand aside and not participate in decision-making, Preferably, should not take part in discussion prior to any decision (but sometimes such people have essential information which needs to be made available to the actual decision-makers), and Should not vote.   Conflicts of interest in governance and management Those who “govern” should...

CONFLICTS OF INTEREST, BIAS AND PREDETERMINATION IN SOCIETIES AND CHARITIES – RECOGNISING AND MANAGING

The issues Problems relating to conflicts of interest, bias and predetermination arise in not-for-profits, not just in local authorities, statutory boards, and commercial entities. People are usually elected or appointed to decision-making positions for either or both of the following reasons: They are believed to have expertise in the area where decisions are to be made, or They hold cogent or well-known or vote-catching positions about some or all of the subjects on which decisions will be made. Such people may be expected to have opinions on the issues they consider, and they have the right and duty to advance those opinions in the interests of the organisation they govern. Democracy would be the poorer if they were not, on occasions, strong advocates for their opinions. As such, they are fully entitled to express their opinions in debate, not only around a decision-making table but also elsewhere. As a matter of public policy, however, there should be no doubt about the purity of decision-making, and someone who is to take part in decision-making should avoid becoming subject to allegations of conflicts of interest, bias or predetermination. “Conflicts of interest”: Extend beyond financial conflicts, and can arise in many other more subtle and indirect ways, especially through friendships and family relationships, and May arise because of a pecuniary or personal interest or because of some element of bias or predetermination in the mind of a decision-maker. “Bias” is a type of conflict of interest: In the legal sense it describes a situation where a decision-maker may not have approached an issue with an open mind, or may have predetermined the...