Conflicts of interest for charities (trustee guide) ~ Sailfin

This is intended as a practical guide for trustees to understand and manage conflicts of interest for charities. It covers a simple process you can apply at every meeting, plus a checklist and a register-of-interests template and you can use it as a standing agenda prompt. For full, official guidance, please see the Charity Commission website.

Conflicts of interest for charities

Conflicts of interest come up in charities of every size. They are not always a sign that anything improper is happening. They are a normal consequence of trustees having lives, relationships, and roles outside the charity.

The risk is not that a conflict exists. The risk is that it is not recognised, not handled properly, or not recorded. That is when decisions become vulnerable, trust is damaged, and trustees can expose the charity, and sometimes themselves, to serious consequences.

This guide sets out a practical approach trustees can use at every meeting, plus simple templates you can adapt.

For the Charity Commission’s recent perspective, see: Let’s talk about conflicts of interest in charities and the Commission’s conflicts of interest guidance (CC29).

Quick checklist for every meeting

[ ] Ask for declarations of interest against the agenda.
[ ] Decide how each conflict will be handled (including whether the trustee leaves the room).
[ ] Confirm quorum for conflicted items.
[ ] Record: the conflict, what you did about it, and the rationale.

What are conflicts of interest for charities?

A conflict of interest is any situation where a trustee’s personal interests, or loyalty to someone or something outside the charity, could influence a decision they are making on the charity’s behalf.

Conflicts are not only financial. They can include:

Financial conflicts: a trustee, family member, or connected person may benefit from a payment, contract, or purchase.
Loyalty conflicts: a trustee is also involved with another organisation the charity is working with, competing with, or funding.
Personal relationships: friendships, family relationships, or close professional ties that could affect impartial judgement.
Competing duties: a trustee’s role elsewhere creates a duty that could clash with the charity’s best interests.

A useful test is: Would a reasonable person think this trustee might find it hard to be completely impartial here? If yes, treat it as a conflict and handle it transparently.

Why conflicts of interest matter for charities

Unmanaged conflicts can create four big problems.

1. Weak decisions

If the people in the room are not independent, it becomes harder to test options properly. Trustees may avoid challenge, accept a “good enough” deal, or miss risks.

2. Decisions that can be challenged

If a decision is influenced by an unmanaged conflict, it may be open to challenge. That can lead to wasted time, legal costs, and the decision having to be revisited.

3. Reputational damage

Even the appearance of a conflict can harm confidence among donors, funders, staff, partners, and the public. Trust is hard to earn and easy to lose.

4. Personal and organisational risk

In serious cases, unmanaged conflicts can be evidence of misconduct or mismanagement. Trustees can also be personally liable if the charity suffers a loss because trustees did not meet their duties.

A simple trustee process: identify, declare, remove, manage, record

If your governing document sets out a conflicts process, follow it. If it does not, this practical approach is a strong default.

Step 1: Identify the conflicts of interest

Build the habit of asking early, not only when something feels uncomfortable.

At the start of a meeting, ask:

Does anyone have any interests relating to today’s agenda items?
Has anyone’s situation changed since the last meeting?
Is there anything that could be seen as influencing judgement, even if the charity is getting a good deal?

Remember that “we trust them” is not a control. Good governance is about protecting the charity and protecting trustees.

Step 2: Declare conflicts of interest clearly and early

The conflicted trustee should declare the conflict before discussion starts, not only at the point of decision.

Declarations should be specific enough to be meaningful, for example:

“My partner works for the supplier being considered.”
“I am a trustee of the organisation we are proposing to partner with.”
“I am bidding for the contract we are discussing.”

Step 3: Remove the conflicted trustee from the decision

In many cases, the safest approach is:

The conflicted trustee leaves the room for the relevant discussion and decision.
They do not vote.
They are not counted towards the quorum for that item.

Sometimes trustees ask whether the conflicted person can stay “to answer questions”. If that happens, keep it tightly controlled, and make sure the trustee is not present for deliberation or decision-making.

Step 4: Manage conflicts of interest properly

Management is the board’s job, not the conflicted trustee’s. Depending on the situation, management actions might include:

getting multiple quotes or benchmarking to evidence value for money
using an independent panel or adviser for a sensitive decision
setting clear criteria before reviewing options
documenting why the decision is in the charity’s best interests
checking you have the legal authority for any trustee benefit or connected person payment

If the conflict involves a payment or contract, check the relevant powers in your governing document and the legal requirements that apply. If in doubt, take advice.

Step 5: Record what happened

Recording is not admin. It is evidence that trustees did the right thing. Minutes should record:

what the conflict was and who it affected
when it was declared
what the board decided to do about it
whether the trustee left the room and was excluded from quorum and voting
what evidence the board used (for example quotes, benchmarking, advice)
the decision made and the rationale

Good records make it much easier to show that trustees acted properly, even when a conflict existed.

Meeting checklist to make this routine

Use this as a standing agenda item and a quick process prompt.

Before the meeting

[ ] Circulate the agenda early, with clear decision points highlighted.
[ ] Ask trustees to review their interests against the agenda.
[ ] Ensure the register of interests is available and up to date.

At the start of the meeting

[ ] Ask for declarations of interest, linked to agenda items.
[ ] Confirm how conflicts will be handled for each relevant item.
[ ] Note expected exits from the room and quorum implications.

During conflicted items

[ ] Pause to confirm the conflict has been declared.
[ ] Ensure the trustee leaves for discussion and decision, where appropriate.
[ ] Confirm the meeting is still quorate for that item.
[ ] Use agreed controls (quotes, independent input, clear criteria).

After the decision

[ ] Ensure the minutes capture the conflict, actions taken, and rationale.
[ ] Update the register of interests if needed.
[ ] Review whether a policy update or training is required.

Register of interests template (simple version)

A register of interests does not need to be complex. It’s a simple way to help recognise, acknowledge and manage conflicts of interest properly, in order to protect your charity. It needs to be complete, current, and easy to use.

Copy and adapt the structure below:

Trustee name
Role on the board (including committee roles)
Employment and professional roles
Trusteeships and other governance roles
Significant volunteering roles
Business interests (directorships, ownership, partnerships)
Close connections relevant to the charity (where appropriate)
Other interests that might reasonably be perceived as influencing decisions
Date last updated
Trustee confirmation (for example, signed or confirmed by email)

Common grey areas trustees should watch for

Some conflicts of interest are obvious for charities. Others are common, but easy to miss.

“It’s a great deal for the charity”

A good deal can still involve a conflict. The control is transparency and proper decision-making, not assumptions about motive.

“They are the only person with the expertise”

Expertise is valuable, but it does not remove the need to manage the conflict. Consider independent advice or structured criteria to reduce reliance on one person’s view.

“It’s a small charity, we all know each other”

Small charities often have more interconnected relationships. That makes good processes even more important, not less.

“We have declared it, so we’re fine”

Declaration is only one step. The board still needs to decide how to handle the conflict and record what it did.

Getting advice around conflicts of interest for charities

Consider seeking additional governance and assurance support and advice when:

there is a proposed payment or financial benefit to a trustee or a connected person
the decision is high value or high risk
the charity is under scrutiny or dealing with a complaint
trustees are unsure what the governing document allows
the conflict is repeated and hard to manage cleanly

A strong approach to conflicts of interest protects charities, and protects trustees. If you want a simple starting point, make conflicts a standing agenda item, keep a usable register of interests, and minute decisions clearly, including who stepped out, what evidence was used, and why the decision was in the charity’s best interests.

For more detail, read the Charity Commission’s conflicts of interest guidance (CC29) and the Commission’s blog post: Let’s talk about conflicts of interest in charities.