Background

Directors, staff and volunteers of Plan International Australia (PIA) should seek to avoid putting themselves in a position where their duty to act (legally or otherwise) in the best interests of PIA conflicts with their personal, professional and business interests.

Actual, perceived or potential conflicts of interest can arise because Directors, staff or volunteers will have outside personal and professional relationships, interests and experience (which can bring benefits to the work of PIA).

When a conflict arises the issue is not usually one of integrity, but of the management of any actual, perceived or potential profit from a person’s position, or any conflicting loyalties. Even the appearance of a conflict has the potential to damage PIA’s reputation and so any interests, duties or obligations which give rise to any unavoidable conflict of interest must be recognised, disclosed appropriately and dealt with carefully in accordance with this Policy.

Clause 22.1 of PIA’s Constitution imposes a duty for Directors to declare an interest and the Corporations Act 2001 Section 181 contains fiduciary duties for Directors to act in good faith and for a proper purpose.

Staff and volunteers agree to adhere to the Plan International Code of Conduct, which states that they should be free of outside interests and activities which might impair their judgement in carrying out their duties, and act solely in the best interests of PIA.

Purpose

The purpose of this Policy is to:

  • assist Directors, staff and volunteers to identify actual, perceived and potential conflicts of interest;
  • explain the process for disclosing conflicts or potential conflicts;
  • provide guidance to those responsible for dealing with conflicts; and
  • assist in the management of conflicts to protect the integrity of the decision-making processes and reputation of PIA, its Directors, staff and volunteers.

This document also sets out the policy for Gifts and Hospitality received by PIA Directors, staff or volunteers and what should be done if a Gift/Hospitality is received.

This policy is not meant to supplement good judgment and Directors, staff and senior management should act in accordance with its spirit as well as its wording.

Scope

This Policy applies to all Directors, staff and volunteers of PIA and its subsidiaries.

Policy statement/s

What is a Conflict of interest?

Good governance requires effective processes to be established to navigate situations where Directors, staff or volunteers either are or may appear to be caught between the interests of PIA, themselves or another party.

Conflicts of Interest should be seen as ethical problems that can have legal ramifications as opposed to being seen through a strictly legal lens only.

With the special status that PIA holds as a registered Deductible Gift Recipient, PIA stakeholders and the community at large view PIA in an ethical context that goes beyond the bare minimum legal requirements and PIA should seek to be an exemplar of best practice.

A conflict of interest is any situation in which Directors, staff or volunteers’ personal interests or loyalties, either could or could be seen to, prevent them from making a decision only in the best interests of PIA. Conflicts of interest can be actual, perceived or potential:

  • Real (actual): where there is genuine conflict between the interests of PIA and the individual or other body.
  • Apparent (perceived): where it looks like there might be a conflict, even if there isn’t one.
  • Potential: where an actual or perceived conflict might develop in the future, even though one doesn’t currently exist.

Directors have a particular duty to PIA in a fiduciary sense. Section 181 (1) of the Corporations Act 2001 requires directors to exercise their powers and discharge their duties:

  • In good faith in the best interests of the corporation; and
  • For a proper purpose.

In determining personal interest, it is subject to an objective test, which is: how would a disinterested observer see the interest as likely to affect decision making?

For PIA the guiding principle to be applied by Directors, staff and volunteers to both conflicts of interest and gifts and hospitality is “if in doubt, report”.

Declaring Conflicts of interest

For Directors there are five occasions when conflicts of interest should be declared:

  1. pre-selection: any prospective Director should be asked to complete a Declaration of Interests form prior to confirmation of appointment.
  2. on arrival: every new Director should review and update the Declaration of Interests form at the time of appointment.
  3. annually: the Directors should review, update as necessary and confirm their Declaration of Interests each year.
  4. As and when: new interests should be declared by Directors as they arise.
  5. At any meeting where a conflict may arise: Conflicts of interest will be a standard agenda item at the beginning of each Board meeting and the Directors present should declare any newinterests and any matters that could give rise to a conflict in respect of any of the agenda items for that meeting. If in doubt a potential conflict should be declared and clarification sought. All such declarations must be minuted.

Directors may seek the advice of the Chair of the Board to clarify any responsibility to declare and where the Chair has a conflict, that advice may be sought from the Chair of the Finance and Audit Committee.

For staff and volunteers, it is the responsibility of each individual to declare any matters to their immediate supervisors which they feel may present actual or potential conflicts, or the perception of such conflicts. Staff and volunteers may seek advice from their line manager and/or a member of the Executive Team noting that the general approach is that if in doubt it is always better to make a declaration.

What must be declared?

This policy requires that the nature and scope of any conflict must be declared. The declaration must include sufficient information to enable appropriate decisions to be taken as to the seriousness of the conflict and its management. This is likely to include: the type of conflict, a description of all parties involved and their relationship, and the potential financial or non-financial interests or benefits, or other duties or obligations.

Managing conflicts of interest

Directors

Once a conflict has been declared to the Board it must be removed or managed so that any potential effect on decision-making is eliminated. Until the conflict has been resolved in either of these ways, the relevant Director should take no part in the matter(s) relating to that interest.

The Board must deliberate on the conflict in the best interests of PIA and pursuant to the specific requirements set out in PIA’s Constitution which deal with how conflicts of interest must be handled.

The Board may resolve to delegate elements of the conflict of interest management, normally to the Chair.

Having evaluated the level of conflict and obtained any further details, the Board may:

  1. decide that the interest is not significant and does not create a real danger of bias or conflict (Category A);
  2. creates a significant but not substantial danger of bias or conflict of duty, or might reasonably cause others to think it could influence a decision (Category B);
  3. creates a substantial danger of bias or conflict of duty (Category C); or
  4. creates a severe or substantial and recurring danger of bias or conflict of duty (Category D).

Once a decision is reached on the severity of the conflict the Board must resolve how it is to be managed.

Generally the following will be appropriate:

  1. Category A: the Director must declare the interest and may contribute information to the meeting and remain in the meeting but not vote or be counted in the quorum.
  2. Category B: it shall be at the discretion of the Chair or other Directors (who do not themselves have an interest in the matter) whether the Director may contribute information to the meeting, but the Director must not participate in the discussion, or vote on the matter and will not be counted in the quorum for that issue.
  3. Category C: the Director must leave the meeting, not participate in the discussion or vote on the matter. Steps will need to be taken to ensure sensitive information is not available to the Director.
  4. Category D: other steps will need to be taken to manage the conflict. An example of such a step could include:
    a. The Director agreeing to obtain consent from the other party creating the conflict, for example, his client or employer, that the Director be relieved of their obligation to disclose relevant information to that other party where the information was obtained from or relates to PIA.
    b. Withholding all other papers that relate to the conflict from that Director.
    c. PIA ceases to undertake the activity giving rise to the conflict.
    d. The Director resigns.

In each case the Board may consider that other steps are necessary.

Where a conflict is so acute or extensive that following these procedures will not allow the Director to demonstrate that they have acted in the best interests of PIA, they may need to seek the authority of the Board to continue to serve.

The decision making should be recorded in the minutes of Board meetings and noted in the register.

The minutes should record:

  • the nature of the conflict;
  • which Directors were affected;
  • whether any conflicts of interest were declared in advance;
  • an outline of the discussion;
  • whether anyone withdrew from the discussion; and
  • how the Board took the decision in the best interests of PIA

Where any minutes or other documents relating to the item presenting a conflict or potential conflict are being provided to the Director facing the conflict, special care must be taken to ensure that the minutes or other documents are appropriately redacted before being provided. A balance needs to be made to ensure that the person still receives sufficient information about the activities of PIA generally without disclosing information which it would be inappropriate for the person to receive.

Staff and volunteers

As stated in the Code of Conduct, PIA respects each staff member’s and volunteer’s right to privacy in the conduct of their personal affairs, yet they should be free of outside interests and activities which might impair the exercise of their independent judgment in carrying out their duties as a staff member or volunteer in the best interests of PIA.

The following are among the arrangements barred by this policy:

  • a staff member or volunteer may not be, directly or indirectly through a family member or other person acting on his/her behalf, an employee or serve as proprietor, partner, officer or Director of any supplier if the staff member or volunteer has any role in the selection of suppliers;
  • a staff member or volunteer may not own capital stock or have other investment in any enterprise which is a supplier to PIA, if such investment would be significant enough to interfere or conflict with the staff member’s or volunteer’s obligation and responsibilities to PIA;
  • a staff member or volunteer may not be a consultant, employee or representative of another firm if such service would: interfere with the employee's obligation to PIA because of the demands of time or interest; utilise PIA proprietary information gained primarily through PIA employment; or identify PIA with an activity or cause with which it does not want to be identified.
  • Where a staff member or volunteer or their family has an outside interest in or activities with any supplier of goods or services to Plan, such interest or activities with such supplier must be disclosed by the staff member or volunteer in writing to their immediate supervisor, who will be responsible for informing the company secretary, who in turn will refer to the Executive Team for appropriate management decisions to be made.

Once a conflict has been declared to the company secretary it must be managed forthwith through the Executive Team so that any potential effect on decision-making is eliminated in a timely fashion. Until the conflict has been resolved, the relevant staff member or volunteer should take no part in the matter(s) relating to that interest.

The Executive Team must deliberate on the conflict in the best interests of PIA. The decision making should be recorded in the minutes of Executive Team meetings and noted in the register.

Gifts and Hospitality

As part of a zero-tolerance approach to any form of fraud and corruption, PIA Directors, staff and volunteers should not offer or accept gifts or hospitality that are, or are perceived to be, anything other than minor in nature and in keeping with general business practices.  These gifts and hospitality should not be anything that could be reasonably viewed as an improper inducement.

Minor is defined as inexpensive and occasional gifts, invitations to charity events and invitations to coffee/meals by third parties. As such determining minor is a judgement call but it is to be exercised within an “if in doubt, report” approach.

Any gifts or hospitality that is not minor should be declared and added to a register.  Whilst they should not be accepted, they should still be recorded as offered as PIA wants to avoid any appearance or concern that gifts or hospitality are being used for undue influence or to influence decision making. A Gifts and Hospitality declaration form must be completed and sent to the Company secretary for recording on a register.

Distribution

This Policy will be available to Directors, staff and volunteers.