Declaring and avoiding conflicts of interest is a legal and moral responsibility that all governors and trustees have. Understanding this is one thing, recognising and dealing with it is another.
The NGA Gold Advice Service is often asked to explain what constitutes a conflict of interest and what the governor/trustee or board should do when a potential conflict arises.
What constitutes a conflict of interest?
In broad terms, a conflict of interests arises when the interests of a governor/trustee in a matter being considered by the governing board, may affect, or be seen to affect, the ability of that governor/trustee to take decisions on the matter that are impartial and in the best interests of the school/trust.
Conflicts of interest are not restricted to those things that governors and trustees declare on the register of interests that is published on their school's or academy’s website (directorships, partnerships, employment, personal relationships etc.). Governors and trustees are also obliged to declare any potential conflicts of interest during meetings and there should be an opportunity for them to do this.
Those cases where individuals on a board perceive conflicts of interest differently are trickier. In such cases, determining that a governor/trustee has a conflict of interest in a matter should come down to an assessment of how likely the governor/trustee is to exert undue influence or allow their personal circumstances to cloud their judgement. Real and perceived conflicts of interest can be equally damaging.
Depending on the individual and the board concerned, the board may want to ask itself:
- Does the matter under consideration provide the opportunity for any individual’s judgement to be clouded (because of potential personal or financial gain) thus affecting their ability to make decisions?
- How might the perceived conflict be viewed by the wider community if it became common knowledge
- What is the reputational risk and might it undermine the school’s values and ethos?
- How might this reflect upon the school and the board’s reputation if it were reported in the local press?
How should boards deal with conflicts of interest?
If there is any doubt, our advice is always:
- acknowledge the interest
- declare it
- for the individual to withdraw from the meeting for the relevant item of business
If there is no consensus (the individual does not perceive a conflict of interest but other board members do), then it should be decided by a vote.
Understanding how conflicts of interests can affect the governing board’s ability to govern effectively, as well as the importance of identifying, and where possible eliminating conflicts, ensures that the governing board are able to be, and seen to be, impartial in decision making.
Therefore, when having discussions, making decisions and considering the membership of panels and committees it is worth considering whether contribution to any of the above could present a conflict of interest, and ensuring that the board has an effective approach in dealing with conflicts as and when they arise.
Although approaches to governance differ, due to individual needs of schools, the governing boards statutory responsibly as well as its duty to comply with legislative governance documents such as articles of association, it is always important to have effective processes in place for identifying, documenting and managing conflicts of interests.
This insight is based on a general scenario – for advice tailored to your governing board’s circumstances and context, please contact the GOLD advice team.
Senior Advice Officer
Adelaide provides advice to NGA GOLD members, alongside writing for the website, magazine and weekly newsletter. She is also an EDI lead. Previously she was a research assistant for an insight and intelligence agency specialising in higher education.