1. A conflict of interest is any situation in which an individual’s personal interests, or interests which they owe to another body, and those of the BDA arise simultaneously or appear to clash. It is inevitable that conflicts will arise and there is a need to manage any potential to profit from an individual’s position in a governance or advisory committee role within the BDA or for them to be influenced by conflicting loyalties. This also applies to staff where conflicts or potential personal gain may arise from their employment by the BDA (elected committee members, including office holders, and staff are referred to as ‘all those affected by this policy’ in the remainder of this document). In addition all those affected by this policy within the Association are bound by the BDA Code of Conduct, which includes selflessness or the duty to act in the best interests of the organisation and not to benefit from their position.
2. Elected members of the BDA Principal Executive Committee (PEC) are also Trustees of the BDA Trust Fund. As such it is appropriate that there is adherence to guidance issued by the Charity Commission which seeks to help trustees and to manage conflicts of interest.
3. The need to declare (and therefore manage) conflicts of interest applies not just within the not-for-profit sector. The Committee on Standards in Public Life, set up by the Government with the aim of ensuring the highest standards of propriety in public life, acknowledged the need to declare and manage conflicts of interest. The ‘Seven Principles of Public Life’, apply to everyone in public office, and represent best practice across the field, see Annex. The BDA reflects this in its Code of Conduct.
4. Even the appearance of an unmanaged conflict of interest can damage an organisation’s reputation, so conflicts need to be addressed or managed carefully. This policy is based on legislation, regulation and best practice in governance. The policy is intended to protect both office holders and staff themselves from accusations of bias as well as the organisation as a whole.
Examples of conflict of interest
Below are examples of conflicts of interest, although this is not an exhaustive list. The rule of thumb should be – if there is any doubt about perception or fact, declare it.
Direct or indirect financial gain
5. Direct financial gain or benefit of all those affected by this policy is a conflict of interest, such as
- payment for services provided to the organisation, e.g writing for a publication in their BDA elected role, providing training, consultancy
- the award of a contract to another organisation in which the individual has an interest and from which a financial benefit could be gained
- taking part in a decision to create or continue a staff post for which the office holder may wish to apply
- the employment of an office holder in a separate post within the BDA, whilst still in office
- a forum working with a commercial partner from whom a forum committee member receives any payment or sponsorship for their professional work, or indeed other commercial relationships, outside the BDA
- a forum commissioning a member of the committee, past or present, a work colleague, family member or close associate of a committee member to do some paid work.
6. Indirect financial gain, such as employment by the BDA of a spouse, partner or family member of all those affected by this policy, where their finances are interdependent, is a conflict of interest.
Conflicts of loyalty
7. All those affected by this policy should bear in mind that when they are dealing with the business of the BDA, their overriding duty is to act in the best interests of the BDA. Such conflicts of loyalty may occasionally cause a conflict of interest;
- have a loyalty (either directly or through a close friend or family member) to another organisation which influences, or could appear to influence, a decision they make in a committee role
- have a loyalty to a particular stakeholder constituency that influences their decisions unduly in their committee roles
- have a role within another organisation that could imply endorsement of that organisation by the BDA
- hold office in any other UK dental membership organisation or any UK health service trade union.
Service users as office-holders
8. The BDA is a membership organisation. Most office holders are all BDA members and are therefore also users of the BDA’s services. This presents its own challenges, because in this context, defining a personal interest can be difficult.
9. Essentially, the question is whether the decision to be taken by anyone affected by this policy will confer a direct benefit on the decision maker, or a close friend or family member, which is exclusive to him or her, and not shared by all other members. If it is exclusive it would be a conflict of interest. If the benefit is for all members, it would not.
10. By virtue of the BDA being a membership organisation, representing the professional needs of dentists, its members may wish to consider applying for employment with the organisation, where members’ skills and experiences in the family of dentistry, are relevant.
11. The legal definition of a ‘benefit’ extends to the acceptance of an employment position by an office holder within the organisation. The rationale for this is that it may be perceived that the office holder could exert unfair influence in being considered for a position of employment, or in ensuring resources are available to create a new position of employment.
12. Within the BDA there is fair and equal recruitment policy and practice, and all candidates for all positions are judged on their individual merit, against a predetermined job description and person specification and criteria.
13. However, to ensure against the perception of a conflict of interest, the BDA requires that any office holder must declare an interest and withdraw from any discussion or decision about a staff post that s/he may later apply for. In addition a Trustee/Board member must resign all elected office prior to submitting an application for employment or secondment or consultancy within the BDA, whether the offer is for part or full time work. This protects both the organisation and office holders against breach of trust and the perception of influence or wrong-doing.
Gifts and Hospitality
14. Whilst it is recognised that accepting hospitality as a representative of the BDA is unlikely to be perceived as having an actual or potential influence on anyone affected by this policy, it is important that receipt of more substantial gifts or acts of hospitality are viewed as a benefit and should be declared and recorded.
15. However, individuals receiving substantial hospitality or gifts from an individual, organisation or company out-with the BDA could be perceived as having the potential to influence the course of decision making or debate, either then or later. All those affected by this policy need to ensure that they are seen as taking decisions based upon facts and evidence.
Managing conflicts of interest
16. The BDA maintains a Register of Interests and all those affected by this policy are asked to declare any interests received in connection with their BDA role, by completing and submitting the Declaration of Interests form annually. Nil returns should be submitted by those who have nothing to declare.
17. All those affected by this policy must update their declarations of interest prior to the next annual return by reporting them to the Secretary of the relevant committee or, in the case of staff, to the Human Resources Manager. The Secretary or Human Resources Manager will update the entry in the Register of Interests.
18. There will be a regular item on the agenda for each committee meeting providing an opportunity for declarations of interest to be reported, and recorded in the minutes in addition to the Register of Interests.
19. The committee must discuss how a conflict of interest is going to be addressed or managed once it is declared, or arises during a meeting. Once the person with the conflict of interest has made the declaration and explained the nature of the conflict, s/he should withdraw from the meeting to allow the other committee members to discuss the implications. The usual options are for the individual’s interest to be noted each time the item arises or, where there is a material interest, the individual should withdraw from the meeting and take no part in the discussion or decision. The decision on how the conflict will be managed must be recorded in the minutes and entered on the Register of Interests. Declarations of gifts or hospitality should be noted, with a clear record that the declaration has been regarded as producing a conflict (and so a record of how the conflict will be managed) or agreement that the gift or hospitality does not entail a conflict of interest.
20. A culture of challenge is also encouraged. A committee member should question whether a conflict of interest has arisen for another member, and if accepted as a conflict, its management should be considered in accordance with the policy.
Role of the Audit Committee
21. The Register of Interests will be reviewed at each meeting of the Audit Committee.
The Audit Committee is able to investigate and challenge conflict management decisions in any committee, and can direct a committee to adopt alternative actions.
22. If a committee cannot reach a conclusion about the management of a conflict of interest, then the issue can be referred to the Audit Committee for guidance. The Audit Committee will if necessary direct the committee concerned on appropriate actions, and the decisions of the Audit Committee will be final.
23. If the majority view in any governance or advisory committee is that an individual’s conflict of interest is so significant that it should exclude him or her from office within a committee, or from membership of the committee itself, then the matter should be referred to the Audit Committee for resolution. The Audit Committee’s decision will be final.
24. A committee member may refer an issue to the Audit Committee if s/he considers that a conflict of interest is not being managed appropriately in his/her committee, or any other committee of which s/he has knowledge. The Audit Committee will consider if any action is required, and its decisions will be final.
What happens if a conflict of interest is unmanaged?
25. Unmanaged conflicts of interest place pressure on all those affected by this policy. They may feel uncomfortable voting against the interests of a fellow office holder; or feel obliged to vote in favour of the office holder’s interests if they are close friends or colleagues. Finally, unmanaged conflict of interest can affect the reputation of the organisation and those within it. The perception of unmanaged conflict of interest could lead to doubts about the organisation’s probity and transparency, and concerns of poor governance.
26. When considering whether a conflict of interest exists, all those affected by this policy should consider how the issue might be perceived by members or people outside of the organisation.
27. All those affected by this policy should always seek advice from the Chief Executive on any issues they are unclear about, or if they may have received an unauthorised benefit, or they have not declared an interest. In the case of PEC members who are Trustees, the Finance Director will, if necessary, seek clarification and remedy from the Charity Commission.
Register of interests
28. The Register of Interests will be held in electronic form, and will be accessible for amendment by committee secretaries and the Human Resources Manager. The Register, in whole or part, will be accessible by any member of the Association on the website. The Register will be held by the Chief Executive.
29. The Register will contain all declarations of interests whether they relate to an ongoing conflict of interest or an individual instance.
Trustees of the BDA Trust Fund
30. Charity law states that trustees (elected members of the PEC) cannot receive any benefit from his or her charity without explicit authority being given in the governing document. The BDA does not have an explicit authority to permit any payment to trustees for services related to the BDA Trust Fund.
31. If during discussions on BDA Trust business, a trustee materially benefits from a PEC decision, and the normal methods of managing the conflict are not sufficient, guidance will be sought from the Charity Commission and this will be reported in the annual report and accounts in accordance with SORP 2005.
32. If an elected member has received a benefit which is not authorised by the governing document or by the Courts or Charity Commission, they will be acting outside of the terms of the organisation’s governing document and may be in breach of trust. In extreme cases, the remedy for this, depending on the type of interest and benefit gained, could involve paying back to the organisation the value of the benefit, or the transaction being challenged by the Charity Commission. If the office holder is deemed to have deliberately placed their own interests ahead of those of the organisation to gain benefit at the expense of the charity, the Charity Commission will open an inquiry and, if fraud is suspected, could refer the matter to the police.
The Committee on Standards in Public Life
The Seven Principles of Public Life
The Committee has set out ‘Seven Principles of Public Life’ which it believes should apply to all in the public service. These are:
Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends.
Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties
In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Holders of public office should promote and support these principles by leadership and example.