Conflicts of interest policy/2012 redraft

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Comment These Rules were adopted by the Board on 1 September 2009 under Article 28. This page is a revision of those rules, to be approved.

These rules have been drafted after having considered the Charity Commission guidance

Background

A conflict of interest is any situation in which a trustee's personal interests, or interests that they owe to another body, may (or may appear to) influence or affect the trustee's decision making. It is inevitable that conflicts of interest occur. The issue is not the integrity of the trustee concerned, but the management of any potential to profit from a person’s position as trustee, or for a trustee to be influenced by conflicting loyalties. Even the appearance of a conflict of interest can damage the charity’s reputation, so conflicts need to be managed carefully.

The Articles of Association set out the over-arching rules on conflicts of interest in clauses M5.5-7.

M5.7 If a conflict of interests arises for a director because of a duty of loyalty owed to another organisation or person and the conflict is not authorised by virtue of any other provision in this Memorandum or the Articles, the unconflicted directors may authorise such a conflict of interests where the following conditions apply:

(a) the conflicted Director is absent from the part of the meeting at which there is discussion of any arrangement or transaction affecting that other organisation or person;

(b) the conflicted Director does not vote on any such matter and is not to be counted when considering whether a quorum of Directors is present at the meeting;

(c) the unconflicted Directors consider it is in the interests of the charity to authorise the conflict of interest in the circumstances applying.

A requirement in those articles cannot be overridden by anything in these Rules. They provide that:

No board member may:

  • Buy from
  • Sell to
  • Be employed by, or
  • Receive financial benefit from the chapter unless:
    • The amount is deemed by the Chief Executive to be cheaper or equivalent to the cost of an outside supplier or is of such a specialist nature that the service could not easily be found elsewhere;
    • The transaction is of a type allowed under clause M5.5 of the Articles; and
    • A majority of trustees do not receive a benefit.

The restriction also applies to close family members and, in respect of remuneration, to companies which employ the trustee.

Likely situations

A conflict of interest may occur even where a trustee does not have a personal financial interest in a third party, but has a historical connection or loyalty to them. This includes loyalty derived from being a volunteer committee member.

The following are examples of where trustees may face a conflict of interest:

  • Claiming and authorising reimbursement of expenses
  • Purchasing goods and services from a connected organisation, such as hiring a room from your university
  • Partnership agreements for initiatives with a connected organisation, such as providing a Workplace Learning seminar at your place of work
  • Agreements with the Wikimedia Foundation or other chapters where a board member has previously served on one of their committees, including the English Wikipedia MedCom and ArbCom, unless they have been representing Wikimedia UK on the committee .

Activities as an ordinary Wikimedia project editor, including trusted editors like Administrators, are not considered to create a conflict of interest.

Disclosure

Given the likelihood of conflicts arising with regard to agreements with the Wikimedia Foundation, all members are required to list on the Register of Interests all positions held or formerly held with the Foundation or on Foundation projects or current interests that might create potential conflicts of interest and to conclude whether a potential conflict exists. After each board election, trustees will be required to declare that they have registered all such positions.

Where we are discussing a relationship with a third party, any trustee's prior relationship which may create a potential conflict of interest must be discussed with the Chief Executive or the full board before any decision is made. Where a decision is being made by an budget holder, the trustee is expected to raise the issue with them, and they must discuss the matter with the Company Secretary or the full board. The Secretary must note the matter in the Register of Interests.

The board must consider the privacy rights of individual trustees when discussing conflicts of interest. Appropriate use must be made of in camera board meetings and private discussions with board officers.

When considering whether to authorise a conflict of interest, the Board must take due regard to the Charity Commission guidance, in particular "A Guide To Conflicts of Interest For Charity Trustees".

If, after discussion, it is concluded that a trustee has a conflict of interest in a proposed transaction, the decision must be considered by the Board. The conflicted trustee must excuse themselves from any vote on the transaction and will not be counted as part of the quorum. They may take part in an initial discussion, but the final decision must be made by the remaining unconflicted board members following a final in-camera discussion. If a transaction is approved, the Board must ensure that appropriate controls are in place.

Expenses

We seek to have a board that reflects the diversity of Wikimedia project users and recognise that not all potential board members are able to pay for their own out of pocket expenses. We will therefore normally reimburse expenses that are properly incurred for the benefit of the chapter. Advance payment of expenses will be considered where cost may be an obstacle to any trustee carrying out their duties.

Expenses will only be reimbursed if they are approved in principle prior to the expense, are reasonable, have been properly filed, are supported by receipts as appropriate and are properly authorised. Trustees are expected to keep the expenses they incur to the lowest reasonable level.

Travel by private motor vehicle or bicycle will be reimbursed at the standard HMRC rates. Travel by train or aeroplane will be reimbursed for standard class only unless First Class is cheaper.

Expense claims must be accurate. Submitting a false or misleading claim, even if not paid, may damage public confidence in the chapter and will be considered a serious disciplinary matter.

Authorisers must only pay claims where they have been properly completed.

When considering whether to submit or authorise an expense payment, due regard must be paid to the Charity Commission guidance, in particular "CC11 - Trustee expenses and payments".

Benefits

Trustees may not accept non-trivial gifts in connection with Wikimedia UK activities.

If, for example, a partner organisation offers to pay for a lunch to discuss joint activities then this may be acceptable, but a judgement should always be made as to whether the gift is appropriate. Where it could be perceived as impairing the ability of the trustee to make independent decisions, at the time or in the future, in the interests of the chapter, then the gift must be declined. Trustees will not be eligible to receive any prizes in connection with chapter initiatives.

Sanctions

When trustees nominate themselves as candidates for election, they are informed of their duties as trustees, including their duty to avoid conflicts of interest.

If a trustee does not comply with these Rules with no reasonable excuse, the Board will consider disciplinary action against the board member. Trustee will normally be required to pay back any amounts which have been improperly received.

In extreme cases, sanctions may include removal of membership and hence directorship under Article 4.