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Conflicts of Interest A conflict occurs when the interests of one role/ position/ relationship are not aligned with another. actual, perceived, potential material, immaterial

Conflicts of Interest A conflict of interest exists where there are circumstances which do, or have the appearance of: compromising an Employee's independence or judgment, or affecting their ability to make impartial decisions in the best interests of their company; indicating favouritism or prejudice towards a particular person or entity, or group of people or entities as part of an Employee's work; resulting in an Employee's personal interests conflicting with their work.

Conflicts of Interest Company policy -available -understandable -clear -communicated - supported by behaviours Persons available to advise

Conflicts of interest Most conflicts can be successfully handled through careful and consistent processes: –disclosure –managing the conflict

Disclosure TO –recruiter –chair –other directors –company –shareholders/members /others WHEN –initially and at any change thereafter

Disclosure HOW –Register of Interests kept by Company Secretary updated at any change - Standard agenda item at every meeting standing conflicts noted any relating to business of meeting

Management Who decides ? Board as a whole - independent of director (or other) concerned. Usually taking advice from Company Secretary or legal.

Management HOW MANAGED –disclosure only –abstain from discussion –leave room for discussion –excluded form receiving relevant papers Process noted in minutes Resignation if cannot be adequately managed

Conflicts of Interest Executives / senior leaders / others Same principles - company policy –notification of Interests –reporting processes Communication and education

Conflict of Interest Examples –appointments to other organisations –employees on committees, taskforces –investments –relationships –gifts, benefits

Conflicts of Interest Successful implementation depends on –understanding of concepts –integrity of individuals –integrity of board as a whole –clear advice and documentation by Company Secretary –consistent and continuous implementation

CONFLICTS of INTEREST EXAMPLES of CONFLICTS DISCUSSION of MANAGEMENT

EXAMPLE 1 You are a senior manager in a major business line of a large corporate. You have been asked to participate on a working group to select a new IT system. Prior to the first meeting, a list of potential suppliers is circulated to the working group. Your partner is a senior member of the sales team for one of the suppliers. What do you do?

EXAMPLE 2 You are a Director of a large MUTUAL organisation which successfully sells white labelled Life and Income Protection insurance - only to its members. You are invited to join the board of a large insurance company which has amongst its product lines, Life and Income Protection – selling and advertising widely on the open market. Your Mutual’s white labelling arrangement is with a different Insurance company. Of course you disclose this relationship and the details. What does the Company Secretary of the large insurance company recommend regarding the possible conflict.

EXAMPLE 3 You retired from the Chief Executive Position (Vice Chancellor) of a large University 12 months ago and after a break of 6 months, have been consulting to various players in the industry. You are invited to join a Ministerial Committee to advise on Infrastructure Grants across the sector. Obviously you must declare your past position but are you conflicted.

EXAMPLE 4 You are a director on the board of a large Independent school in the city – an honorary role. Your daughter- in-law tells you she is applying for a Senior Executive position in the school with reporting responsibilities to the Principal. How do you respond.

EXAMPLE 5 You are a senior manager in the HR department in a medium sized business. Which of the following situations would you report to your senior officer. You are aware your colleague Mark has used his position to influence the recruitment process to ensure his friend Paul receives preferential treatment over other qualified candidates Your colleague Mark has heard you discussing a vacancy and says he thinks his friend may be suitable and will encourage him to apply Your colleague Mark has advised his friend Paul of an employment opportunity available in your company.

EXAMPLE 6 You are a member of the Executive team responsible for product development in a large corporate. You are offered free attendance with your partner at a conference on new technologies at a luxury resort island from a company which has previously been an IT contractor to your company. The invitation comes by and you wonder; is this a PD opportunity; is this a gift I need to declare: is this an inducement which I should disclose and/or refuse. What do you do?