Trustees’ Week 2025 Day 5 - Managing conflicts of interest

On the last day of Trustees’ Week 2025, we are looking at conflicts that may arise during your time as trustee and how they can be managed. You will likely face conflicts of interest as a trustee and ensuring that these are properly managed is key to good governance.

Conflicts of Interest

As a trustee you must make decisions based only on what’s best for your charity. A conflict of interest is any situation in which a trustee’s personal interests or loyalties could, or could be seen to, prevent the trustee from making a decision only in the best interests of the charity.

Trustees have a collective duty to identify conflicts of interest as they arise and there are two main types to be aware of. The first is financial, where a trustee or connected person could receive a tangible benefit from a decision made by a charity, such as a decision to remunerate the trustee. The second is a conflict of loyalty, in which a trustee’s responsibility to the charity conflicts with their loyalties elsewhere. This could relate to a situation or decision involving the trustee’s employer, family member or business associate.

Once a conflict has been identified, it must be declared as soon as you become aware of it. Even if a trustee is unsure that a conflict of interest has arisen, it should be declared, nonetheless. Remember to follow any relevant provisions in your governing document and/or conflict of interest policy.

The next steps is to manage the conflict of interest so that it does not have any influence on the outcome of the charity’s decision. In the first instance, consider whether the conflict can be removed. If not, we strongly advise that the conflicted trustee is recused from the relevant discussions, does not take part in any related decision or vote, and is not counted in the quorum. Ensure that the unconflicted trustees can still form a quorum.

Lastly, and most importantly, make sure all discussions and decisions relating to the conflict of interest are recorded in writing. This is so you are able to demonstrate that it has been properly managed and that the decision was made only in the best interests of the charity.

Closing thoughts – Celebrating the power of good governance

As we approach the end of Trustees’ Week 2025, we sincerely hope it’s been a positive one for you. Most importantly, we hope you as trustees have taken the time to celebrate your achievements and the key role you play in the charity sector.

This week, we have reviewed how important the power of good governance is to a charity’s success and resilience. Good governance is perpetuated by the aim of continuous improvement. There is always more to learn, and trustees should continue to consult Charity Commission guidance and training, and support each other throughout their trusteeship. As a reminder, you can check out https://trusteesweek.org/ to learn more and access support.

Charities continue to face pressures: rising demand on their services, increased costs versus the risk of declining donations and all this against the backdrop of a complex regulatory landscape. At Geldards, we believe that trustees and charity staff are society’s biggest unsung heroes.

If you would like to discuss any of this week’s insights, please contact the Charities Team.