Conflict of interest policy, Saltbush Reading Foundation

Conflict of interest policy template for a not for profit board

A conflict of interest policy has to help directors recognise a conflict, declare it early and know what happens next, so decisions stay in the organisation's interest and funders can see that they do. This four page policy for a literacy charity board does that with six worked examples, five declaration rules, five management options and a register of interests.

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Saltbush Reading Foundation
15 March 2027

Conflict of interest policy

For directors, committee members and senior staff.

Prepared by
Board of directors
Date
15 March 2027
Conflict of interest policy, Saltbush Reading FoundationPage 2 of 4
Conflict of interest policy, Saltbush Reading FoundationPage 3 of 4
Conflict of interest policy, Saltbush Reading FoundationPage 4 of 4
1
Purpose and scope
Saltbush Reading Foundation runs adult literacy programs in 11 towns, funded by grants and donations of about $2.4 million a year. Donors and funders give on the understanding that every decision is made in the foundation's interest alone. This policy applies to the nine directors, members of the finance and audit committee and the program committee, the chief executive and the four senior managers.
2
What a conflict is
A conflict of interest arises when a person's private interest, or a duty they owe someone else, could influence, or could reasonably appear to influence, a decision they make for the foundation. It can be actual (it exists now), potential (it could arise) or perceived (a fair minded observer could think it exists). It can involve money, family, friendship or another board seat. Having a conflict is not wrong; hiding it is.
3
Examples and how they are handled
These are the situations the board sees most often, and the usual way each is managed:
Situation
Kind
Usual management
A director's printing firm quotes for the annual report
Actual, financial
Declare, leave the room, no vote
A director's son applies for a coordinator role
Actual, family
Declare, no part in shortlisting or hiring
A director also sits on another charity applying for the same grant
Actual, duty
Declare, withdraw from the grant discussion
The treasurer works for the foundation's bank
Potential
Declare and record; leave any banking tender
A director is paid to speak by a major donor
Perceived
Declare; board decides if action is needed
The chief executive's partner is a volunteer tutor
Perceived, low
Record in the register only
4
Declaring an interest
Interests are declared early, in writing, and again whenever they become relevant:
1.
On joining, complete the standing declaration of interests within 30 days, listing employment, other board seats, significant shareholdings and close family links to the foundation.
2.
Update the standing declaration within 14 days of any change, and confirm it each July.
3.
Declare a specific conflict as soon as you become aware of it, in writing to the chair, or to the deputy chair when the chair is conflicted.
4.
At every board and committee meeting, declare conflicts at the standing agenda item that opens the meeting, before any business.
5.
If unsure whether something is a conflict, declare it and let the board decide.
1.
On joining, complete the standing declaration of interests within 30 days, listing employment, other board seats, significant shareholdings and close family links to the foundation.
2.
Update the standing declaration within 14 days of any change, and confirm it each July.
3.
Declare a specific conflict as soon as you become aware of it, in writing to the chair, or to the deputy chair when the chair is conflicted.
4.
At every board and committee meeting, declare conflicts at the standing agenda item that opens the meeting, before any business.
5.
If unsure whether something is a conflict, declare it and let the board decide.
1.
On joining, complete the standing declaration of interests within 30 days, listing employment, other board seats, significant shareholdings and close family links to the foundation.
2.
Update the standing declaration within 14 days of any change, and confirm it each July.
3.
Declare a specific conflict as soon as you become aware of it, in writing to the chair, or to the deputy chair when the chair is conflicted.
4.
At every board and committee meeting, declare conflicts at the standing agenda item that opens the meeting, before any business.
5.
If unsure whether something is a conflict, declare it and let the board decide.
5
Management options
The other directors decide how a declared conflict is managed, without the conflicted person present for that decision. They choose the lightest option that protects the foundation:
1
Record only
The interest is noted in the register and the person takes part as normal. Used for remote or low interests.
2
Abstain from the vote
The person may contribute knowledge to the discussion but does not vote.
3
Leave the room
The person leaves for the discussion and the vote, and the minutes record when they left and returned.
4
Withhold board papers
The person does not receive papers on the matter, so they cannot be seen to influence it outside the meeting.
5
Remove the conflict
For a lasting conflict, the person gives up the other interest or steps down from the role.
6
The register of interests
The company secretary keeps the register, which holds every standing declaration and every specific conflict with the action taken. The board reviews it each July and the auditor may inspect it. Specific entries look like this:
Meeting
Person
Interest and matter
Action
9 Nov 2026
Director 4
Owns printing firm; annual report quote
Left the room; quote from another firm accepted
14 Dec 2026
Director 7
Board seat at another charity; state grant round
Withdrew from the item
8 Feb 2027
Treasurer
Employed by the bank; transaction account review
Abstained from the vote
7
Transactions with directors
Directors are not paid for board work. The foundation buys goods or services from a director, or a business they or their family control, only when the board, without that director, approves it in advance, two other quotes have been obtained, and the price is at or below the market rate. Every such transaction is reported in the annual financial statements.
8
Gifts, hospitality and donors
A gift or hospitality worth more than $100 from a supplier, grant applicant or donor is declared to the company secretary within 7 days and entered in the register, because it can create a perceived conflict later. Directors who introduce a major donor may stay involved in that relationship, but take no part in decisions about how a restricted gift from that donor is spent.
9
Former directors and staff
For 12 months after leaving, a former director or senior manager may not be engaged as a paid consultant or supplier without board approval given under clause 7, and may not use confidential information about grant applications or program partners for another organisation.
10
Breaches and review
Failing to declare a conflict, or taking part in a decision against the board's direction, is a breach of this policy and of a director's duties. The chair raises it with the person, and the board may ask a director to resign or, for staff, start the disciplinary process. A decision made while an undeclared conflict was present is reconsidered. The board reviews this policy every year at its July meeting.

Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Cover
Spine cover with the foundation, title and who the policy covers.
1 and 2. Scope and definition
Who is covered and the three kinds of conflict.
3. Examples table
Six situations with the kind of conflict and the usual handling.
4. Declaring an interest
Five rules from joining to the meeting agenda item.
5. Management options
Five numbered responses from recording to removing the conflict.
6. Register of interests
Who keeps it and three sample entries.
7 to 10. Transactions, gifts, former directors, breaches
Two quotes and market price, a $100 gift line, a 12 month rule and review.

How to adapt this document

First, rewrite the examples table from your own minutes; the cases your board has actually faced teach new directors more than invented ones. Second, if you have no committees or senior managers, narrow clause 1 to the board and the chief executive and keep everything else. Third, check what your charity regulator and your constitution say about paying directors or their businesses, and make clause 7 match the stricter of the two before the board adopts it.

What makes this document work

Examples do the teaching

Six rows cover the cases a charity board actually meets: a director's printing firm quoting for the annual report, a director's son applying for a job, a shared board seat at a rival grant applicant, a treasurer who works for the bank. Each row pairs the kind of conflict with the usual handling.

The lightest option that works

Clause 5 lists five responses in rising order, from recording the interest to removing the conflict, and has the other directors choose without the conflicted person present. Boards that only know one response, leaving the room, either overreact to small interests or ignore them.

Declarations have dates

A standing declaration within 30 days of joining, updates within 14 days of a change, a yearly confirmation each July and a standing agenda item at the start of every meeting. A register entry from 9 November 2026 shows the result: the director left, and another firm's quote won.

Questions people ask

What is the difference between an actual and a perceived conflict?

An actual conflict exists now: a director's firm is quoting for work. A perceived conflict is one a fair minded observer could reasonably think exists, even if the person is not influenced, such as a director paid to speak by a major donor. Both are declared, because donors and regulators judge appearance as well as fact.

Who decides how a conflict is managed?

The other directors, without the conflicted person present for that decision. The chair usually leads, and the deputy chair steps in when the chair has the conflict. The decision and the reason go in the minutes and the register, so an auditor can see the board considered it rather than waving it through.

Can a charity buy services from one of its directors?

Often yes, with safeguards. This policy needs advance approval by the board without that director, two other quotes and a price at or below market, and reports every such transaction in the financial statements. Charity regulators in several countries publish guidance on paying trustees or their businesses that should be checked first.

Should a conflicted director leave the room or just not vote?

It depends on the conflict. Abstaining suits cases where the director's knowledge helps the discussion and the interest is modest. Leaving for both discussion and vote suits a direct financial or family interest, because even contributing to the debate can sway colleagues. The minutes record the times they left and returned.

How often should board members update their declarations?

Within a set time of any change, here 14 days, and once a year as a confirmation, here each July when the board also reviews the register and the policy. Add a standing agenda item at every meeting so new conflicts are caught on the day, not at the next yearly review.

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