Conflicts of interest can undermine good governance and can damage the reputation and integrity of a charity. They can also lead to regulatory and financial issues for charities.
What should a conflict of interest policy cover?
A conflict of interest policy should cover the following:
- The purpose of the policy
- Who the policy applies to
- What a conflict of interest is
- Duty to declare a conflict of interest
- How to report concerns around a conflict of interest
As much as possible, the policy should be tailored to the specific charity, taking into account its size and risk profile. Examples of conflicts of interest specific to the charity can help bring the policy to life.
Who the policy applies to
A conflict of interest policy would usually apply to:
- Trustees
- Any other committees or groups forming part of the governance function of the charity
- Employees (including temporary employees)
- Volunteers
In addition, some charities may decide to ask suppliers or partnership organisations to complete conflicts of interest declarations as a condition of working with the charity. This could help identify potentially undisclosed personal relationships between people working within the two organisations, which could lead to a perception of a conflict of interest, even if there is not any conflict.
What is a conflict of interest?
A conflict of interest usually arises in the two following ways:
- Personal conflicts – whereby a person working for or with a charity has a personal, financial or family interest that could influence their decision making.
- Where duties to another organisation, such as a person’s employer, could conflict with their duties to the charity.
It is important to be alive to the potential for perceived conflicts. A perceived conflict is a situation where it could appear that a person’s judgment could be improperly influenced, even if there is no actual conflict.
Duty to declare conflicts of interest
It is usual to require any person joining the board of trustees (or other governance committee or board) to declare any conflicts of interest, as well as requiring them to confirm at the start of each trustee meeting or, potentially, in connection with a specific topic, that they do not have any conflicts of interest.
Again, it is usual to require any employees to declare conflicts of interest as part of joining the charity. Depending on the seniority and role of the employee, it may also be prudent to require them to make a declaration on an annual basis. It is not always the most senior roles which carry the greatest risk from any conflict of interest. Anyone who is involved in decision-making for the charity, for example in procurement, may warrant a more
rigorous approach.
The policy should make clear that the duty to declare conflicts of interest change, so that individuals are aware that as soon as their circumstances change they should update their declaration, rather than waiting to be asked.
How to report concerns
What is appropriate will depend on the size and nature of the charity. If a charity has a whistleblowing procedure, for example an ability to submit concerns anonymously, then any conflict of interest policy can refer to that.
The policy should clearly set out how to report concerns and should provide for a way for individuals to report concerns to the trustees/board in the event they have concerns about senior management.
Encouraging and empowering employees and volunteers
Similarly to whistleblowing, charities should encourage and empower staff by:
- Explaining the importance of
declaring conflicts of interest - Providing assurance that concerns
reported to the charity will be taken
seriously - Reassuring staff that they will not
suffer any adverse consequences
for reporting concerns, even if those
concerns prove to be unfounded - Encourage staff to err on the side of
caution by declaring any potential
conflicts of interest, even if they turn
out not to be
Investigating and managing conflicts of interest
Charities should make sure that any conflicts of interest which are declared are properly investigated and
considered.
A conflict, or perceived conflict, of interest, does not necessarily mean that an individual cannot, for example, work for the charity. It may be that for
their particular role
Review the policy and remind everyone
The policy should be reviewed from time to time, potentially annually, or otherwise updated as needed. It is important to keep reminding everyone about the policy and why declaring conflicts of interest is so important to the charity.
ACKNOWLEDGEMENT
Nikki Bowker, Partner, Devonshires
DISCLAIMER
Published 2025. © Fraud Advisory Panel and Charity Commission for England and Wales, 2025. Fraud Advisory Panel and Charity Commission for England and Wales and Devonshires Solicitors LLP will not be liable for any reliance you place on the information in this material. You should seek independent advice.
