Conflict of Interest Policy – Barrow Cadbury Fund

Conflict of Interest Policy – Barrow Cadbury Fund

 

 

1. Introduction

 

 

1.1          This policy outlines the principles and procedure for managing Conflicts of interests for the Barrow Cadbury Fund for Directors.  A separate policy is in place for managing Conflicts of Interest in relation to the Barrow Cadbury Trust.

 

1.2          A conflict of interest arises when the interest of a member of the Board is in conflict with their interests in another capacity and as such could compromise or appear to comprise their decisions.

 

1.3          Directors have a legal obligation and duty of care to act in the best interest of the Trust and its beneficiaries in accordance with the governing document and to avoid situations where there may be a potential conflict of interest.

 

1.4          Conflicts of interest can arise where an individual’s personal interests or loyalties, or those of a family member, conflict with those of the Fund.  In this context a family member refers to a parent, partner, sibling or child.  Such conflicts can:

 

(a)    Inhibit free discussion.

(b)   Result in decisions that are not in the interest of the Fund.

(c)    Give the impression that the Fund has acted improperly.

 

 

2.            Charity Commission and Company Law Definitions

2.1          The Charity Commission’s, ‘A guide to Conflicts of Interest for Charity Trustees’ ^[1] defines a conflict of interest as ‘any situation in which a Trustee’s personal interests, or interests that they owe to another body, may (or may appear to) influence or affect the Trustee’s decision making’.

 

2.2          The overall principle is that there must be a ‘disinterested quorum’ to make a decision.  If this is not possible, the permission of the Charity Commission should be sought to amend the governing document to deal with the situation.

 

2.3.         Directors cannot receive any benefit from their charity in return for any service they provide to the charity unless they have express legal authority to do so.  The most common situations in which conflicts of interest can occur include:

 

• Direct financial gain or benefit to trustees
• Trustees as directors of a subsidiary trading company
• Sale of land to a trustee
• Use of Trustee’s property by the charity
• Indirect financial gain or benefit to a trustee
• Non-financial gain
• Conflicts of loyalty
• Nominated or representative trustees
• Ex-officio trustees
• Local authorities as trustees

 

2.4          Directors of charitable Trusts are subject to the provisions the Companies Act 2006 in relation to conflicts of interest and are required to declare any interest in contracts or proposed contracts.  The Act also limits or does not allow certain types of conflict of interest, such as sales or property, or loans from the charitable company to directors of that company.  The following sections related to directors’ conflict of interests were implemented on 1 October 2008:

 

• Section 175 – Duty to avoid conflicts of interest
• Section 176 – Duty not to accept benefits from third parties
• Section 177 – Duty to declare interest in proposed transaction or arrangement
• Section 180(1) to (3) and (4)(b) – Consent, approval or authorisation of members
• Section 181(2) and (3) – Modification of certain provisions in relation to charitable companies
• Chapter 3 of Part 10 (ss182 to 187) Declaration of interest in existing transaction or arrangement.

 

 

3.            Process for Managing Conflicts of Interest

3.1          A Conflict of Interest Form is required to be completed by each Director for both the Barrow Cadbury Fund and the Barrow Cadbury Trust at least annually for review by the Chair and resolution by the Board.  Conflicts relating to connected persons (as defined in 1.4) are required to be disclosed.

 

3.2          The Conflicts of Interest Forms will be collated into the Barrow Cadbury Fund Register of Interest to be reviewed by the Chair annually.

 

3.3          The following four levels of response to be used by the Chair to grade identified conflicts are broadly in line with Charity Commission guidance, i.e.:

(i)            Minor conflicts – the Director declares the interest, may contribute to the discussion at the Chair’s discretion, but may not vote;

(ii)            Larger conflicts – the Director leaves the meeting;

(iii)            Serious conflicts – the Director leaves the meeting, doesn’t participate in discussions or see any relevant papers;

(iv)            Major conflicts – the Director resigns.

 

3.4          At the beginning of any Committee/Board meeting, Directors will be asked to declare any conflict of interest in items to be discussed.  Any such conflicts will be minuted and dealt with in accordance with the identified grade of conflicts as above.

 

3.5          A further Board resolution is required if anyone is appointed during the year or if a Director has either to:

 

(a)    Add a new interest that they have acquired or a person connected to them has acquired to the register or;

 

(b)   There is any change in the material nature of the extent or significance of a conflict.  If so, the Chair should consider whether the conflict needs to be regraded.