Directors and Academy Representatives have a legal duty to act only in the best interests of their schools. Where a situation arises in which they cannot do this due to a personal interest they have, steps should be taken to identify, prevent and record the conflict. This ensures Directors and Academy Representatives are acting in the best interests of the school.
In the declaration above, you must provide details relating to:
- Your ownership or partnership of a company or organisation which may be used by the MAC/schools to provide goods or services;
- Goods or services you offer which may be used by the MAC/schools;
- Any close relation you have to someone who satisfies either of the above;
- Any close relationship you have to someone who is employed by the MAC/schools.
Declaring your conflicts of interest is a legal requirement within the School Governance (Roles, Procedures and Allowances) (England) Regulations 2013 and for academies, in the Articles of Association and Academies Financial Handbook. However, making an annual declaration does not remove your requirement to make an oral disclosure of the interest and temporarily leave the meeting, where the interest is relevant to something being discussed.
Generally, governors should not participate in any discussions in which they may directly or indirectly benefit from a pecuniary interest, except where the relevant authority has authorised this i.e. legislation for maintained schools or articles of association for academies. A direct benefit refers to any personal financial benefit and an indirect benefit refers to any financial benefit you may have by virtue of a relationship to someone who stands to gain from a decision of the board. Both direct and indirect interests must be declared.
Non-pecuniary interests (Conflicts of loyalty)
There may be a non-pecuniary interest whereby the Director/Academy Representatives does not stand to gain any benefit but a declaration should still be made. For example, this might be where a Director / Academy Representatives has a family member working in the school. While the Director / Academy Representatives might not benefit personally, their judgment could be impaired if something was brought up that would affect the family member.
Handling the conflict
The board must make a decision as to whether or not they should take steps to remove the conflict by:
- Not pursuing the course of action it relates to; or
- Proceeding with it in an alternative way which does not give rise to conflict; or
- Not appointing the governor in question or seeking to secure their resignation.
In the minutes of the meeting, the following should be recorded:
- The nature of the conflict;
- Which Director / Academy Representatives (s) it relates to;
- Whether a declaration was made in advance of the meeting;
- A brief overview of what was discussed;
- Whether the Director / Academy Representatives (s) withdrew from the meeting;
- How the Board made the decision in the best interests of the school.
The Board must keep a register of pecuniary interests for the Directors, Academy Representatives and staff of schools. The register should be reviewed annually by the clerk but any new interest or ceased interest, should be reported to the clerk as and when they occur.