Conflicts of interest

Directors/trustees are bound to serve the interests of the organisation over their own personal or whanau interests. They must not abuse their position of trust. It is also extremely important that a board is seen to make decisions that are based on fair process.

A conflict of interest arises when you or your whanau stand to gain financially from a decision or discussion in the board room. For example, if the board is considering letting a tree pruning contract and your brother owns a forestry contracting business, you must declare your conflict of interest to the board. You must make sure that the contractor selection process is seen to be open and fair and that you do not gain commercially sensitive information about other contractors you could pass on to your brother. You must not play any role in selecting the contractor or negotiating the contract.

Following good conflict of interest procedure means you and your whanau can seek contracts from the organisation along with other businesses.

Declaration

If matters come up during a meeting that will affect your own or whanau business, you must declare a conflict of interest to the chair. This declaration must be recorded in the minutes of the meeting.

You then decide if you will:

• Stay in the room during discussion but not vote (abstain).
• Leave the room to make sure you do not influence the decision, or so that you do not hear information which could put you in a difficult situation. This applies when the issue being debated might result in a significant gain for the director/trustee.

Common “conflict of interest” situations

• Your company is a possible supplier to the organisation.
• The board's decision could lead to employment for a whanau member.
• The board's decision could lead to a whanau member's business being used to provide goods or services.
• Information provided to the board in confidence might give an advantage to your business, or a whanau member's business if they decided to seek a contract.

Perception

Note that it is also important that perceptions of conflicts of interest are managed. Situations may arise when, although you do not believe there is a conflict of interest, it is nevertheless important to follow conflict of interest procedure so that all processes are seen to be fair and transparent by stakeholders.

More information for Charitable Trusts

Provisions dealing with conflict of interest issues may be provided for in the rules of the charitable trust.

As a general rule trustees are bound to serve the interests of the board over their own personal or whanau interests. They must not abuse their position of trust.

A conflict of interest arises when you or your whanau stand to gain financially from a decision or discussion. For example, if the board is considering tenders for a cleaning contract and your sister owns a cleaning contracting business, you must make sure the contractor selection process is seen to be open and fair and that you do not gain commercially sensitive information about other contractors you could pass on to your sister. You must declare your conflict to the other trustees and withdraw from that part of the meeting.

Following good conflict of interest procedure (and provided profits are not distributed to members) you and your whanau can seek contracts from the trust along with other businesses if not prohibited by the rules of the trust.

More information for Māori Trust Boards

Board members/trustees are bound to serve the interests of the Māori Trust Board over their own personal or whanau interests. They must not abuse their position of trust. It is also extremely important that a board is seen to make decisions that are based on a fair process. Where a conflict of interest arises, a board member/trustee should declare that interest and not participate in the decision or discussion in the boardroom. Notwithstanding this, board members/trustees are not debarred by virtue of their membership from receiving any benefit from the board's funds provided that:

• No money shall be applied by a board, whether by way of grant or loan or in any other manner, for the exclusive benefit of any member, without the prior written approval of the Minister of Māori Affairs.
• No member of a board shall take part in any discussion or vote on any resolution of the board concerning the application of any such money for his or her exclusive benefit.