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Managing conflicts of interest
The decision makers for a licensed charitable collector have a responsibility to ensure that public monies raised for charitable purposes are used efficiently and effectively for the benefit of the organisation as opposed to individuals. Managing conflicts of interest is integral to maintaining strong governance practices and demonstrating transparent decision making.
Where a member of the Committee or Board has a potential conflict between their duties and responsibilities to the organisation and their personal interests this interest must be carefully managed.
How to manage a conflict of interest
Most corporate structures have a legislated process for the disclosure and management of financial or material personal interests and decision makers must ensure they are aware of the legal requirements applicable to their organisation.
Broadly the following principles should be followed when dealing with a conflict of interest:
- Disclose the interest
As soon as a person becomes aware that they have an interest in a proposed contract or decision to be made by the committee or board they should disclose their interest and explain its nature.
- Record the disclosure
The disclosure should be accurately recorded in the minutes for the meeting of the organisation.
- Withdraw from discussions and voting
The person with the conflict of interest must not be present while the matter is discussed or take any part in the discussions, deliberations or vote on the decision or contract.
Note: For organisations registered under the Associations Incorporation Act 2015 (WA) please refer to the INC Guide for incorporated associations in WA for information about the requirements to manage material personal interests.
A licence holder may wish to introduce internal controls to help manage potential conflicts of interest. For example:
- Formalise the process for managing a conflict in the rules or constitution.
- Develop a policy that covers financial and other conflicts of interest.
- Maintain a register where all disclosures can be recorded.
- Ensure that all decisions relating to contractual matters are made at a formal meeting of the committee or board.
- Include a note disclosing any benefits received by the committee members in the financial statements to ensure transparency in the reporting of information.
- Use a proper tendering process and obtain quotes from at least three (3) suppliers when purchasing goods or services.
- Make “Conflicts of interest” a routine agenda item at each meeting of the committee.
Conflict of interest policy
If any of an organisation’s Principal Executive Officers are related, the Charitable Collections Advisory Committee will require a copy of its conflict of interest policy as part of the application for a charitable collections licence.
The Australian Charities and Not-for-profit Commission website includes sample policies and templates that may help organisations to develop an appropriate policy.
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