Conflict of Interest Policy

1. Principles

The purpose of this document is to explain the principles behind the University’s policy on Conflict of Interest

1.1 Under the Companies Act 2006, the University is required to take such steps as reasonably practicable to ensure that Conflicts of Interests within the law are secured for the University’s Governing Council, Extended Vice Chancellor’s Executive (EVCE), employees, and external examiners/advisors (externals).

1.2 The purpose of the policy is to protect the directors and the University from possible accusations of impropriety and ensure broad public trust and confidence in the University of Derby. The University recognises that in order to ensure the highest standards in the process of governance, members of the Governing Council, and the members of EVCE, employees and externals1 should have a sound understanding of the policy and that this is applied effectively.

1.3 All individuals have a legal obligation to act in the best interests of the University. Conflicts of interest may arise where an individual’s personal interests or connections to third parties conflict with the interests of the University. Such conflicts can inhibit free and impartial discussion, result in decisions that are not in the best interests of the University and risk the impression that the University has not acted transparently.

1Members of the Governing Council, and the members of EVCE, employees and externals shall be referred to as individual for the purposes of this policy.

2. Definitions

2.1 Declaration of interest

A declaration of interest is defined as the oral or written disclosure that the subject matter under discussion, or shortly to be discussed at a meeting or assessment board, places the individual in a position where there is a risk of a conflict of interest.

(i) The University should conduct an annual review of the declarations of interest of Governing Council* and EVCE and

(ii) The Registry should conduct an annual review of the declarations of interest of External Examiners and University employees with External Examining duties.

*Members of staff who serve as governors and members of the University of Derby Students’ Union are understood to have a standing interest relating to their employed role and do not need to make a further disclosure of this interest.

2.2. Conflict of interest

A conflict of interest is the situation where an individual finds their view on a matter of governance business is compromised as a result of a direct or indirect personal interest in the matter or as a result of a connection to another party involved in the business matter.

Direct financial gain or benefit to the individual from examples of conflict of interest are set out below.

(i) Award of a contract to another organisation in which the individual has an interest and from which they could receive a financial benefit

(ii) Employment in a separate post within the University

(iii) Indirect financial gain, such as employment of a spouse by the University

(iv) Non-financial gain, such as when a user of the University’s services is also a governor

(v) Conflict of loyalties, such as where an individual is appointed by a local authority or by one of the University’s regulatory and funding bodies.

(vi) Any interest or activity which might conflict with University’s policies (e.g. corporate ethics policy) or might otherwise cause conflict (e.g. where two governors are a professional advisor and client respectively).

(vii) Interests in an organisation with which the University has a relationship (e.g. a partner college).

(viii) Non-financial gifts which could be interpreted as inducements, such as hospitality from a supplier tendering for work with the University. In these circumstances, gifts such as entertainment should be disclosed through the Clerk to the Governing Council.

An individual must declare any interest that they may have in the business under discussion in a meeting. If there is a conflict of interest, the individual should discontinue any input to the discussion and withdraw from the meeting.

If a conflict of interests arises for an individual 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 the Articles, an unconflicted individual may authorise such a conflict of interests provided that:

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

(ii) the conflicted individual does not vote on any such matter and is not to be counted when considering whether a quorum of Governors and/or academic staff / externals are present at the meeting and/or assessment board; and

(iii) the unconflicted individual consider it is in the interests of the University to authorise the conflict of interests.

3. Reporting

If an individual declares an interest, the Governing Council, Committee, or Assessment Board has to decide which of the following options are appropriate in compliance with the Companies Act 2006 (implemented October 2008):

(i) To allow the individual concerned to still participate in the discussion.

(ii) To exclude the individual from the meeting or assessment board for the duration of the discussion of that specific item.

(iii) To request the individual to resign.

However, given the nature of University business and its structure and the involvement of public funding, options (ii) and (iii) above are highly unlikely.

3.1 General considerations in making a declaration of interest

(i) Individuals are asked to make a declaration of interest if they believe that an item of business under discussion, or shortly to be discussed at a meeting or assessment board, places the individual in a position where there is a risk of a conflict of interest.

(ii) Normally, individuals will be able to judge from the agenda whether there will be a need to disclose a potential conflict of interest in which case they are in a position to declare the potential conflict of interest ahead of any discussion.

(iii) However, if the individual does not become aware of a potential conflict of interest until the discussion is under way, they should still declare the interest. Individuals are expected to declare an interest in a matter at the earliest possible opportunity.

(iv) If an individual believes that a conflict of interest has occurred then this should be reported to the chair of the committee and/or board as early as possible.

(v) Therefore, unless there is a significant conflict of interest, the Governing Council, committees and assessment boards do not proscribe the participation of individuals with declared interests or conflicts of interest from the discussion of business items. However, individuals who have a conflict of interest must not participate in any related vote.

(vi) Individuals who declare an interest may take part in the discussion of the matter provided that the Governing Council, Committee, or Board have authorised this in advance. However, it is a matter of good practice that they remind the other members of the circumstance during the discussion so that all participants are aware of the theoretical partiality.

3.2 Governors and Extended Vice Chancellor’s Executive

(i) All members of the Governing Council and EVCE are required to disclose any related party transactions, in accordance with the regulations of the Financial Services Authority, in July each year. The related parties are defined as a director’s parents, spouse, children, stepchildren, and a civil partner.

(ii) All new governors are asked to complete a declaration on appointment and all existing governors and members of the EVCE are asked annually in July to review their declared interests, indicate any related party interests, and register any gifts received during the year. Registers recording declared interests, related party transactions and declared gifts are maintained by the Clerk.

(iii) The information provided will be processed in accordance with data protection guidelines as set out in the General Data Protection Regulation 2018. The information provided will not be used for any other purpose than recording the declarations.

(iv) If a governor fails to declare an interest known to the Chair, Clerk or other governor then any of these persons may disclose such interest on the governor’s behalf.

(v) Ultimately, the Chair will decide if a governor has a conflict of interest and if that governor should be permitted to participate in discussions and decisions on any given subject. In the event of the Governing Council having to decide by vote, interested parties may not vote on matters affecting their own interests.

(vi) Governors with a declared conflict of interest are not permitted to authorise contracts or invoices connected with such conflict.

(vii) Where a material conflict of interest exists and has been authorised by the Governing Council and a governor receives a benefit from the action taken, this benefit will be declared in the University Annual Report.

(viii) In the unlikely case of a substantial and persistent conflict of interest which seems likely to damage the interests of the University, the Chair may ask the governor to remove the conflict, if necessary, by resignation from the Governing Council.

Governors of the University are indemnified against actions that they may take providing that:

(i) they have not been negligent in their conduct of their duties; and

(ii) to the extent permitted by sections 232 to 234 of the Companies Act 2006.

3.3. Members of Assessment Boards, Committees, and Externals

(i) All members of Assessment Boards, Committees, and Externals are required to disclose any related party transactions, in accordance with the regulations of the Financial Services Authority, each year. The related parties are defined as parents, spouse, children, stepchildren, and a civil partner.

(ii) All new Externals are asked to complete a declaration on appointment and all existing employees and Externals are asked annually to review their declared interests, indicate any related party interests. Registers recording declared interests are maintained by the Registry.

(iii) The information provided will be processed in accordance with data protection guidelines as set out in the General Data Protection Regulation 2018. The information provided will not be used for any other purpose than recording the declarations.

(iv) If an individual fails to declare an interest known to the Chair, Officer or other member then any of these persons may disclose such interest on the individual’s behalf.

(v) Ultimately, the Chair will decide if an individual has a conflict of interest and if that individual should be permitted to participate in discussions and decisions on any given subject. In the event of the board or committee having to decide by vote, interested individuals may not vote on matters affecting their own interests.

3.4 Minutes

The minutes of any meeting at which a conflict of interest is declared will record:

(i) the nature of the interest

(ii) an outline of the discussion

(iii) the actions taken to manage the conflict

4. Related policies and guidance

Further information can be found in the following locations:

University of Derby Governing Council Ordinances

Gov.uk guidance – Conflicts of interest: a guide for charity trustees (CC29)

Gov.uk guidance – Managing conflicts of interest in a charity

Regulations governing the appointment of External Examiners also ensure that there are no conflicts of interest.

Assessment Boards for Undergraduate Programmes

Assessment Boards for Postgraduate Programmes

Author(s): ARB/MW

Area: Registry, CAEQA

Date of Equality Analysis: N/A

Approval date by Governing Council: 12 April 2019

Implementation date: 12 April 2019

Next review date: April 2021