Most council members of tertiary education institutions (TEIs) have personal and professional interests and roles that, from time to time, may overlap with the interests of the TEI. Situations of overlapping interests or roles may create a conflict of interest when an individual’s duties or responsibilities to the TEI could be affected by some other interest or duty – whether in a personal capacity or as a member of another organisation.
TEI council members should ask themselves:
Does my other interest create an incentive for me to act in a way that may not be in the best interests of the TEI?
If the answer is “yes”, a conflict of interest exists or may be perceived to exist – irrespective of whether the member would actually act on that incentive.
A conflict may arise from: directorships or employment with another organisation; involvement in another business; professional or legal obligations; holding another office; membership of another organisation; investments and property ownership; beneficial interests in trusts; gifts and hospitality; family or close personal relationships; strong political or personal beliefs.
A conflict of interest may be financial (pecuniary) or non-financial and it may be direct or indirect.
In general terms, a council member may have a financial or pecuniary interest that creates a conflict:
A non-financial interest can arise when a council member:
Non-financial interests may be more difficult to identify than pecuniary interests, especially where a council member has an established position on a policy issue. Usually, council members are free to express their views, but sometimes a degree of sensitivity may be required if the council is considering issues that have the potential to affect the interests of third parties.
A TEI council must have internal practices to ensure all members declare their interests so that conflicts of interest can be appropriately managed. A summary of these practices is provided below.
|Key internal mechanisms for managing conflicts of interest|
|Discussion with the Chair |
If a council member is uncertain whether the potential for a conflict of interest exists, he or she should discuss it with the council Chair.
|Policy and procedures |
A declaration of interest policy, including procedures to deal with conflict of interest matters (or potential conflicts), should be developed and recorded and made available to all council members.
Councils should establish and maintain a register of members’ interests that is updated regularly.
|Meeting agenda item |
Declarations of interest should be the subject of a regular agenda item at council meetings to establish before the meeting begins whether any council member has a potential conflict of interest on any agenda item.
|Council minutes |
Any declaration of interest and potential conflict of interest should be clearly recorded in the council minutes along with the process by which the conflict is managed.
While the primary responsibility for conflicts of interest rests with each member, the council must also ensure it has robust processes to help members to identify conflicts and declare their interests, and to ensure that interests are recorded and conflicts appropriately managed.
In addition to recording council members’ interests, the council needs to be assured by the Chief Executive that the TEI is operating robust internal policies and practices to record staff interests where a conflict or potential conflict may arise.
A code of conduct is a set of principles to guide the behaviour of council members in carrying out their governance roles, which enables the council to set a “tone from the top” for the TEI. The table below summarises the key principles of a code of conduct.
|Honesty, integrity and transparency|| |
|Act in the best interests of the TEI|| |
|Act fairly and impartially|| |
|Use council information and council position appropriately|| |
|Exercise due care and diligence|| |