Charity Conflict of Interest Policy UK Guide

What this document is

A trustee conflict of interest policy is an internal governance document that sets out how the board of a charity will handle situations where a trustee has a competing personal, financial, or loyalty-based interest in a matter being discussed. It is not a piece of legislation in itself, but it reflects the duties that trustees already owe under charity law and company law where the charity is incorporated.

The policy usually defines what counts as a conflict, describes how trustees should declare interests at the start of meetings and when new matters arise, and explains what should happen next, for example withdrawing from a discussion or abstaining from a vote. It also covers record-keeping, so that the charity can demonstrate to regulators, funders, beneficiaries, and the public that decisions were made properly.

Charities registered in England and Wales are expected to follow the Charity Commission's guidance on this area, and most grant-making bodies will ask to see a policy before releasing funds.

How to use this document

1. Spotting a potential conflict. Trustees should consider, before each meeting and as new items arise, whether they or anyone closely connected to them stands to gain or lose from a decision, or whether another role they hold could pull them in a different direction. Early identification is far easier than unpicking a decision later.
2. Declaring the interest openly. Once a trustee notices a conflict, they should tell the chair or the full board promptly and in plain terms. The declaration should cover what the interest is, who else it affects, and whether it is financial or based on loyalty to another organisation or individual.
3. Deciding how to manage it. The remaining trustees then decide the right response. In many cases the conflicted trustee will leave the room, not take part in the discussion, and not vote. For more significant matters the board may need to take further steps to protect the decision-making process.
4. Recording what happened. The minutes should capture the declaration, the decision about how to handle it, who took part in the discussion, and the reasoning behind the outcome. A register of interests maintained alongside the minutes helps keep the picture current between meetings.
5. Reviewing the policy periodically. Boards should revisit the policy every so often to check it still reflects how the charity operates, any changes in Charity Commission guidance, and lessons learned from real situations that have come up. A policy left untouched for years tends to drift out of step with practice.

Common questions