Conflicts of interest: a 2025 refresher for UK boards and trustees

If you work with boards long enough, you learn two truths: (1) conflicts of interest are everywhere, and (2) managing them well is a sign of a healthy organisation. Handled badly, they corrode trust, decision-making and, ultimately, impact.

A recent, real-world example

In November 2024 the Charity Commission published the outcome of its statutory inquiry into The Captain Tom Foundation. The regulator found “serious and repeated” misconduct/mismanagement, including failure to properly identify and manage conflicts; it also confirmed the disqualification of the former CEO and a trustee (10 and 8 years respectively).

Issues included private benefit, use of the charity’s name to further a planning application at family property, and confusion around commercial IP and fees linked to the family’s companies.

Why mention it? Because the failings weren’t exotic — they were classic conflict-of-interest problems: blurred roles, related-party payments, weak oversight and inadequate separation between personal, commercial and charitable interests.

The lesson: conflicts are normal; unmanaged conflicts are risky. This affects both business and charities so let’s see some specific requirements and get the boring bits over!

The rules of the game (charities)

  • Identify, record, manage, and — where necessary — remove the conflict. The Commission’s CC29 guidance and its “5-minute guide” make this crystal clear.
  • Trustee payments/benefits and related-party transactions must be authorised in your governing document or by the Commission, demonstrably in the charity’s best interests, and managed without the conflicted trustee’s involvement in decisions. The Captain Tom report is a recent reminder.
  • Investments: since Butler-Sloss and the 2023 update to CC14, trustees have clearer discretion to take ethical factors into account — but you must document your reasoning and have the charity’s objects in mind not just your personal viewpoint.

The rules of the game (business)

  • Companies Act 2006
    • Section 175: avoid situations where a director has (or may have) a conflict.
    • Section 177: declare interests in proposed transactions/arrangements.
    • Section 180: sets out how board authorisation can legitimise certain conflicts.
  • UK Corporate Governance Code (2024 update): applies for financial years beginning on/after 1 January 2025; boards should identify and manage conflicts, including those from significant shareholdings, and protect independent judgement.

Where conflicts crop up

You would be surprised how easily conflicts arise. Here are just a few examples:

  • Dual roles (e.g., CEO also a trustee/director of a related entity)
  • Related-party suppliers or “friendly” advisors (“my mate can do it for a grand”)
  • Trading subsidiaries and IP/licensing arrangements
  • Sponsorships, grants and “strategic partnerships” that come with conditions
  • Gifts, hospitality, side letters, success fees and performance bonuses
  • Family employment (holiday jobs included), loans and property deals

Good practice that works for both charities and companies

  1. Be upfront with any conflicts(real or perceived)
    • Annual declarations from trustees/directors and key staff; refresh at each meeting.
    • Register of interests (standing board paper).
    • Standing agenda item at the start of every meeting; chair confirms recusals.
  2. Make decisions defensible
    • Document the rationale: why the conflicted option was still the best option, not merely the cheapest. Note who has recused themselves and (if relevant) who remained quorate.
    • Market test: seek tenders/quotes or benchmark fees; if there’s only one viable supplier, say why.
  3. Keep structures clean
    • Trading subsidiaries: appoint at least one independent NED; set service-level agreements; manage IP licensing on arm’s-length terms with board-approved pricing.
    • Clear role separation: avoid executives wearing too many hats across group entities.
  4. Nail the policies
    • Conflicts of Interest Policy aligned to CC29 / Companies Act duties
    • Related-party transactions (RPT) policy with thresholds, approval routes and disclosure requirements.
    • Gifts & Hospitality register with sensible limits.
    • Procurement policy (e.g., ≥£5k three quotes; ≥£25k competitive tender — adapt to scale).
  5. Strengthen oversight
    • Audit & Risk Committee (or a Finance & Audit Committee for charities) with authority to review RPTs and exceptions.
    • Chair & SID (business) / Senior Independent Trustee (charity) as escalation routes.
    • Whistleblowing channels that bypass management when needed.
  6. Train people
    • Short annual refresher for trustees/directors and budget-holders: what a conflict looks like, how to declare it, and what happens next.
    • Use the Commission’s quick guides for trustees as pre-reads

Final thought

Conflicts aren’t a sign of bad faith; they’re a sign that people are active in the world. What matters is process: spot them early, record them clearly, manage them consistently - and if in doubt, step out and let the rest of the board decide.

Handy references