When a conflict of interest is disclosed, the board must promptly assess the situation to determine whether the disclosed conflict poses a genuine risk to the integrity of decision-making, fairness, or organisational outcomes. The process for managing conflicts of interest includes the following steps:
1. Evaluation of the Conflict
- Disclosure: The individual must fully disclose the nature of the conflict, providing any relevant details that could help the board assess the situation. This disclosure must be made in writing to ensure transparency and clarity.
- Initial Review: The Board of Directors, with guidance from the Governance or Ethics Committee (if applicable), will assess the potential impact of the conflict on the organisation’s activities, governance, and decision-making.
- Impact Analysis: If necessary, an independent third party may be appointed to provide an objective analysis of the situation to determine the potential risks to the organisation's operations, credibility, and legal standing.
2. Possible Actions
Based on the evaluation, the following actions may be considered:
- Recusal from Decision-Making: The individual with the conflict may be asked to step aside from discussions or decision-making related to the conflict. This can apply to voting, policy decisions, project allocations, or any matter directly tied to the conflict.
- Resignation from Board or Employment: In cases where the conflict is deemed severe and cannot be adequately resolved through recusal or other measures, the individual may be required to resign from their position, either on the Board of Directors or as an employee, to eliminate the conflict.
- Independent Review and Mediation: In particularly complex cases, the board may choose to bring in an independent third party, such as a legal advisor or mediator, to assess the situation and advise on the most appropriate course of action. This step ensures impartiality and upholds the integrity of the process.
3. Periodic Conflict of Interest Review
To prevent future conflicts and ensure ongoing adherence to ethical standards, the Board will periodically review and update the conflict of interest policy, particularly during the annual organisational meetings or when new board members or staff are appointed.