The guidance follows a public consultation and has been designed to improve general levels of understanding among trustees about this issue and to be clearer about what is expected of charities and their trustees, regardless of the size of the charity and the extent of the risks posed.
The guidance has a new emphasis on the seriousness of the issue and the consequences that can follow from mishandling conflicts of interest.
For the first time the Commission’s guidance expressly explains that potential conflicts of interest may need to be considered as a ‘pre-appointment’ issue, placing the emphasis on preventing conflicts from arising. There is also an increased emphasis on the responsibility of individual trustees to identify and declare any conflicts of interest.
Other key features of the new guidance include:
- a simple three step approach to dealing with conflicts of interest
- a revised working definition of conflicts of interest
- a number of practical examples to illustrate the principles in the guidance.
Sam Younger, Chief Executive of the Charity Commission, said: “This guidance is about making sure trustees get this basics of good governance right. It’s unacceptable that improperly handled conflicts of interest are so pervasive in our compliance work and all too often we are seeing serious weaknesses in charities’ knowledge and ability to handle the issue. That’s why this guidance is clearer about what’s expected of trustees – the simple three step approach has been designed with this in mind.
“I urge all trustees to adopt a conflicts of interest policy and for those that already have one to consider whether it’s good enough in light of the revised guidance.”
The guidance, which consists of a high level summary and detailed guidance, can be accessed on the Charity Commission website.
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