A Conflict of Interest Policy That Actually Works

Almost every UK charity has a conflict of interest policy. Most were drafted from a template, signed once at trustee induction, and never read again. The register, if there is one, lives in a folder, is updated when somebody remembers, and is treated as an administrative chore rather than a working governance tool.

A conflict of interest policy that earns its place looks different. The policy is short and specific. The register is current. The meeting protocol is automatic. The result is faster, calmer, more defensible decisions, and significantly reduced regulatory risk. The article below is the working version I install with charity boards.

What the policy itself should contain

A clear definition of conflict types

Four categories, each with examples:

• Direct financial: trustee or close family receives money or benefit from a decision.
• Indirect financial: trustee’s employer or business partner is affected.
• Personal: family relationship, close friendship or other personal connection with someone affected.
• Conflict of loyalties: trustee holds another role (governance, employment, volunteering) that pulls in a different direction.

Conflicts of loyalty are the most commonly missed category. A trustee who is also on the board of a partner organisation has a conflict of loyalty whenever the two organisations interact, even if no financial interest is involved.

A clear declaration process

Three points at which trustees must declare:

1. On joining the board (full register declaration).
1. At the start of every board or committee meeting (any conflicts with items on the agenda).
1. Whenever a new interest arises (within 14 days of becoming aware).

A clear handling protocol

What happens when a conflict is declared. Default: the trustee withdraws from discussion and decision. Exceptions (where the conflict is judged immaterial after consideration by the chair) are recorded with reasoning in the minutes.

A clear register practice

Where the register is kept, who maintains it, when it is updated, and who has access. Most charities benefit from publishing a summary register on the website; it builds confidence and reduces friction.

The register that actually works

What it contains

For each trustee:

• Other charity trusteeships and directorships.
• Employment and material self-employment.
• Material shareholdings and beneficial interests.
• Close family relationships with staff, trustees, or significant stakeholders.
• Other roles or connections that could foreseeably create a conflict.

How it is maintained

Owned by the company secretary, governance lead, or (in smaller charities) the chair of trustees. Updated within 14 days of any notified change. Reviewed in full annually with every trustee signing.

How it is used

Cross-referenced against the agenda before every board meeting. Conflicts are flagged in the meeting pack, so the declaration at the start of the meeting confirms rather than discovers them.

The meeting protocol that prevents drift

Standing first agenda item

"Declarations of interest" as the first substantive item on every board and committee agenda, before approval of minutes. Two minutes, brief, named.

Item-by-item check on sensitive decisions

For any decision involving a contract, a grant award, a significant partnership, or a senior appointment: a specific check at the top of the item asking whether any trustee has an interest, however minor. The discipline catches the conflict that the standing item did not.

Minute discipline

Every declaration recorded. Every withdrawal recorded. Every decision to continue notwithstanding a declared minor interest recorded with reasoning. Minutes that omit declarations are weak evidence in a regulatory review.

What the Charity Commission expects

A documented policy that is followed

The Commission's CC29 guidance sets out clearly what is expected. The most common failure point is not the absence of a policy but the gap between the policy and the practice. Boards that ensure the practice matches the policy rarely have a regulatory difficulty.

A register that is current

An out-of-date register found during a regulatory review is treated more seriously than a missing register; it suggests the trustees believed they were compliant when they were not.

Transparent handling of related-party transactions

Where transactions involve trustees, family members or connected organisations, the Commission expects clear documentation, demonstrable independent decision-making, and disclosure in the trustees' annual report. The bar is higher than for ordinary transactions, by design.

Common conflicts-policy failures

• A policy that exists on paper but is never referenced in meetings.
• A register that was complete at induction but has not been refreshed since.
• Declarations made in passing without minute discipline.
• Conflicted trustees remaining in the room and the discussion "in case their experience helps".
• Related-party transactions executed without the documentation the Commission expects.
• Conflicts of loyalty treated as too minor to declare, then becoming visible in a difficult situation.

A conflict of interest policy is the cheapest piece of governance armour a charity owns. Wearing it consistently costs almost nothing. Not wearing it costs a great deal at the wrong moment.

The 30-day overhaul

1. Days 1 to 7: Review the current policy, register and meeting practice against the structure above.
1. Days 8 to 14: Draft revised policy. Refresh register with every trustee within seven days of receipt.
1. Days 15 to 21: Update meeting templates so declarations are a standing first item. Brief the chair and company secretary on minute discipline.
1. Days 22 to 30: Present to full board. Approve. Publish summary register on the website. Schedule the annual full refresh in the governance calendar.

Thirty days. A policy that actually works. A board that makes faster, calmer, more defensible decisions because the conflicts question is settled at the start of every meeting rather than discovered in the middle of one.

Further reading

A Risk Register for the Modern Charity | Impact Reports That Funders Actually Read | A Hybrid Working Policy for Charities That Actually Works