AISV : Governance guidelines : 11. Conflicts of interest

The fiduciary obligations imposed on Board Members encompass a duty to avoid situations where, without the prior consent of the School, a material personal interest of a Board Member conflicts or may conflict with their duty to the School. Conflicts of interest are prohibited per se and any considerations of fairness are irrelevant. The only means by which a conflict of interest will be permissible is with the prior informed consent of the School.

11. Conflicts of interest

As a Board Member, if you have a material personal interest in a matter that relates to the affairs of the School you must:

Disclose your interest to the other Board Members giving details as to the nature and extent of the interest and the relation of that interest to the affairs of the School as soon as practicable after becoming aware of the interest in the matter.
Ensure that details of the disclosure are recorded in the Minutes of the Meeting
Be absent from the Meeting while the matter is being considered and refrain from voting (unless a Board Resolution is passed to the contrary)

A Board Member may give standing notice of the nature and extent of a possible conflicting interest. Standing notice means that the Board Member will not be obliged to bring his or her interest to the attention of the Board every time a potentially conflicting matter arises. Standing notice will expire if a new Board Member is appointed and is not given the notice.

Common examples of material personal interests in a matter that relates to the affairs of the School include:

Where the School employs a company of which a Board Member is involved or has a pecuniary interest or family connection

Where the School is voting on a policy relating to a matter in which a Board Member has a material interest
Where a decision reached by the Board will result in a financial or other specific benefit for a particular Board Member

Board Members should always err on the side of caution if unsure as to whether they have a material personal interest in a matter that relates to the affairs of the School. By disclosing the nature and extent of the Board Member’s interest, the Board Member can obtain the Board’s informed consent and avoid any potential conflict of interest issues.

“I am a Member of the School Board in a provincial city and the School wants to hire my construction company to carry out renovations in the main building. Are there any conflict of interest issues that arise?”

It is imperative that in this situation you disclose all relevant information relating to your interest and any potential financial or other benefits that you will receive if your construction company carries out the job. The Board, without you present, should then discuss the conflict of interests and resolve as to whether or not to allow your company to carry out the renovations.
The Board will need to weigh up the benefits that will be derived from using your company (i.e. cost, supporting a member of the school community, etc.) against the associated risks should something go wrong.

In risky ventures where there is a real potential for dispute, it is preferable to deal with an arms length supplier as the potential for ill will can have a major impact on the school community.