Being the trustee of an academy trust carries the responsibility to act in others’ best interests. This includes responding in the right way to conflicts of interest.
What is a conflict of interest?
A conflict of interest arises where a trustee’s personal, professional, or family interests could influence their decision-making in relation to the trust. This deliberately broad definition includes actual, potential, or perceived conflicts, and financial or non-financial interests.
A trustee who fails to identify or manage a conflict of interest properly may:
- Breach charity law and company director duties
- Undermine the validity of board decisions
- Contribute to audit or regulatory findings
- Expose themselves and the trust to reputational risk
Managing conflicts correctly is therefore a core governance responsibility, not a procedural formality.
Read on for our step-by-step guide, from identifying the conflict to keeping it under review.
1. Recognise that a conflict exists or may exist
When unsure, trustees should err on the side of disclosure rather than omission.
2. Declare the conflict promptly and fully
This involves:
- Declaring the interest to the Chair and the board of trustees
- Ensuring the interest is recorded in the register of interests
- Making a specific declaration at the relevant meeting, even if the interest is already on the register
Declarations should be clear and specific, explaining the nature of the interest, who or what it relates to, and how it connects to the matter being discussed.
3. Withdraw from discussion and decision-making
Where a conflict exists, the trustee must:
- Not participate in any discussion of the matter
- Not influence other trustees formally or informally
- Not vote on the decision
In most cases, the trustee should also physically or virtually leave the meeting for that agenda item. This protects the integrity of the decision and protects the trustee personally by demonstrating proper conduct.
4. Ensure the conflict is properly minuted
The board must ensure that:
- The declaration of interest is recorded in the minutes
- The trustee’s withdrawal from discussion and decision-making is clearly noted
- The decision is shown to have been taken only by non-conflicted trustees
Minutes should demonstrate that the board recognised the conflict, actively managed it, and reached the decision independently.
5. Allow the board to assess and manage the conflict
After the trustee steps aside, the remaining trustees must decide how to proceed.
This usually includes:
- Considering whether the transaction or decision is in the trust’s best interests, necessary, and represents value for money
- Considering alternatives (e.g. other suppliers or options)
- Applying additional scrutiny where public funds are involved
The conflicted trustee must not be involved in this assessment.
6. Follow additional requirements for related party transactions (if applicable)
If the conflict relates to a related party transaction (for example, a contract with a trustee-connected company), trustees must also ensure that:
- The transaction is at cost (no profit)
- Reporting and approval requirements from the DfE (Department for Education) are met in advance
- The transaction is fully disclosed in the annual accounts
Failure to manage conflicts properly in this context can lead to regularity breaches, regulatory intervention and reputational damage.
7. Keep the conflict under review
Conflicts are not always one-off events. Trustees should:
- Update their declaration if circumstances change
- Redeclare the conflict if the issue arises again
- Ensure the register of interests remains accurate and up to date
Summary: the trustee’s golden rules
When a conflict of interest is identified, a trustee should:
- Declare it early
- Record it clearly
- Step away completely
- Let independent trustees decide
- Ensure transparency throughout
Handled properly, conflicts do not prevent trustees from serving effectively; failing to manage them does.
