INTRODUCTION/GUIDANCE

The Charity Governance Code, Principle 3, recommends that a charity’s board understands how real and perceived conflicts of interest and conflicts of loyalty can affect both the charity’s performance and reputation and that trustees establish a regularly reviewed Conflicts of Interest Policy.

The Code also highlights the need for trustees to be aware of the importance of the public’s trust and confidence in charities and that they, and those representing the charity, undertake their duties accordingly, being seen to act with integrity.

Trustees have a duty to act in the best interests of the charity they serve. Trustees generally should not benefit from the charity and should not be influenced by their wider interests when making decisions affecting the charity.

As company directors, trustees also have a legal duty to avoid conflicts of interest under the Companies Act 2006.

The purposes of this Policy & Procedure are to:

• demonstrate the importance to trustees of high standards of integrity;
• protect both IWA and the individuals involved from any appearance of impropriety;
• provide guidance as to when a conflict may arise and how It should be managed;
• enable others to challenge where a conflict exists or is perceived to exist.

Conflicts of interest and loyalty

A conflict of interest can be defined as any situation in which the personal interests of a trustee, or of those ‘connected’ to them, or responsibilities they owe to another body, may, or appear to, influence the trustee’s decision making. The most common types of conflict include:

• Direct financial interest e.g. the award of a contract or purchase of assets;
• Indirect financial interest e.g. making a grant to a person or organisation connected to the trustee;
• Employment;
• Non-financial or personal conflicts e.g. where trustees receive no financial benefit, but are influenced by external factors e.g. influencing board decisions to their own advantage, to gain some intangible benefit or kudos, awarding contracts to friends;
• Role with another organisation e.g. committee member;
• Conflict of loyalties e.g. trustees may have competing loyalties between the charity to which they owe their primary duty, and some other person e.g. a ‘connected’ person or organisation. Examples include:
  • Previous employment or roles
  • Friendships
  • Membership of a special interest group or other organisation

In the case of IWA, conflicts also may arise or appear to arise by virtue of different roles which a trustee may have e.g. as Chair of a Branch or Region or member of a Restoration Society or close friendships.

Conflicts may create problems that:

• inhibit free discussions e.g. where a trustee is known to have an interest in a decision, the other trustees may feel under pressure not to speak against it and to decide in the interest of the conflicted trustee or resent the interest and vote against it;
• cause loss of trust;
• result in decisions or actions that are not in the best interests of IWA, but the interests of a trustee;
• risk the impression that IWA and the individual has acted improperly, so causing reputational damage. IWA would then need to invest time and energy in addressing the situation.

POLICY

General principles: (from the IWA Code of Conduct – revised September 2025)

Paragraph 8

‘Trustees must not place themselves under any  financial or other obligation to outside individual organisations that might influence them in their performance of their duties as trustees.

Paragraph 9

Trustees should conduct themselves in  a  manner which does not damage or undermine the reputation of the Association, or its employees or volunteers, individually or collectively, and  should not take part in any activity which is in conflict with the objects or which might damage the reputation of the Association.

Paragraph 17

Trustees should bring a fair and open-minded view to all discussions of the Board of Trustees and should endeavour to ensure that all decisions are made in the charity’s best interests.

Paragraph 18 

Trustees must aim to foresee and avoid conflicts of  interest.

Appearance of a conflict

While trustees may well be acting with integrity, the mere appearance of a conflict can be damaging to the trustee and to IWA, so such a situation needs to be managed effectively. When considering how such a situation may be perceived, the test is to consider how it would be viewed by members, other stakeholders and how could it be portrayed in the media or perceived by regulators?

PROCEDURE

Information

Where trustees receive confidential information, it must not be used to the advantage of themselves or another person or entity. The Annual Declaration of Interests includes further provisions regarding confidential information.

Declarations of interests

Trustees must declare their interests and any gifts or hospitality of a value over £25 offered and/or received in connection with their role in IWA. The declaration shall be made using the proforma and submitted to the Administration Manager.

A declaration of interests in the form provided must be updated annually and whenever material changes occur. In the case of uncertainty, a trustee must err on the side of caution and make a declaration.

The information will be processed in accordance with the principles of the Data Protection Act 2018.

Interests will be published on IWA’s website with the Trustees’ biographies (excluding sensitive personal information).

Timing of Declaration

A trustee must declare, at the earliest opportunity, the nature and extent of any real or perceived interest, direct or indirect, or conflict of loyalty which they have.

If an individual fails to declare an interest, the Chair, another trustee or Company Secretary may declare the interest and require that the procedure is followed.

Meeting agendas and Minutes

It must be a standing item at the start of any meeting of the trustees that any interest relating to any item covered on the agenda be declared.

The Minutes of the meeting must record the interest and the steps taken.

Conflict of interests [Clause 8 and 42(3) Articles]

A trustee must absent themselves from any discussions of the trustees in which it is possible that a conflict will arise between their duty to act solely in the interest of the charity and any personal interest (including but not limited to any personal financial interest) or conflict of loyalty.

A trustee shall not be counted in the quorum present when any decision is made about a matter upon which that trustee is not entitled to vote.

Conflict of loyalty [Clause 9 Articles]

• If a conflict of interest arises for a trustee 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, the unconflicted trustees may authorise such a conflict of interests where the following conditions apply:
  • the conflicted trustee is absent from the part of the meeting at which there is discussion of any arrangement or transaction affecting that other organisation or person;
  • the conflicted trustee does not vote on any such matter and is not to be counted when considering whether a quorum of trustees is present at the meeting;
  • the unconflicted trustees consider it is in the interests of the charity to authorise the conflict of interests in the circumstances applying.
• In this article a conflict of interests arising because of a duty of loyalty owed to another organisation or person only refers to such a conflict which does not involve a direct or indirect or indirect benefit of any nature to a trustee or connected person.

Determination of a conflict or whether a matter should be declared

In the case of uncertainty, a trustee should seek advice from the Company Secretary and that a final decision as to whether a conflict exists would be made by a majority of the unconflicted trustees/Chair based on information provided in advance of the meeting.

An individual may participate in discussions from which they may indirectly benefit where the benefit is common to all users or where their benefit is minimal, e.g. to all users of the waterways.

BREACH OF THE POLICY

If a breach of this policy is suspected, the matter will be referred to be dealt with under the Disciplinary Process.

Breach of legal responsibilities

This will occur if a trustee knowingly accepts a benefit without proper authority. If the transaction is challenged e.g. by the Charity Commission or other interested party, and found to be invalid, the trustee could be required to pay back any benefit received or become liable for any loss to IWA.

If a trustee breaches their obligations under the Companies Act 2006, there are also consequences. For example, if a director fails to declare an interest in a proposed transaction, they may be subject to a fine. The directors/trustees involved in the transaction, including those who authorised it, may be required to return any gains to IWA or to make good IWA’s losses.

DEFINITION OF ‘CONNECTED PERSON’

This term is defined in various places e.g. the Companies Act 2006 and the Charities Act 2011. The definition in this Policy includes these and additional relationships specific to IWA.

• Members of a trustee’s direct family:
  • spouse or civil partner;
  • any person with whom the trustee has an enduring personal relationship (whether co-habiting or not);
  • a child, step-child or grandchild of the trustee or trustee’s partner (as set out in the previous 2 definitions) and their partners;
  • the trustee’s parents and grandparents;
  • the trustee’s siblings;
  • the trustee’s parents’ siblings and their children.
• Business partners of the trustee and/or their direct family.
• Connected institutions e.g. restoration societies where the trustee has or has very recently held another role, and bodies corporate in which the trustee and/or persons connected to them hold substantial interests (5% of the equity or voting rights exercisable at a general meeting).
• Any other case where the substance of the relationship and not just its legal form is such that a person has a significant influence over a charity’s decision-making or if a charity acts on those instructions.

The policy was updated and approved by trustees on 18th September 2025.