It is expected that our directors and any employees (“Representatives”) make decisions in the best interests of Chester Community Energy Limited (CCE) including CCE’s members, and not based on their personal interests. Each Representative must inform the directors of any possible personal or business interest that may potentially conflict or give the appearance of conflicting with the execution of their duties. Such interest may be familial, financial or arise from some other connection. CCE may also be conflicted in the performance of its operations.
A conflict of interest arises when a Representative or organization (CCE) is involved in more than one interest, one of which could possibly corrupt the motivation for an act in the other. It is a set of circumstances that creates a risk that professional judgments or actions regarding one interest will be unduly influenced by another interest. Conflicting interests may be financial, personal or business.
Conflicts of Interest
Conflicts of interest may be actual, potential or perceived. Perception is critical to client and public confidence.
A conflict of interest is:
- a circumstance or relationship
- whether intentional or accidental
- that does now or might in the future
- actually, potentially or be perceived to
- influence a person to pursue or promote
- interests that are not aligned with those of CCE (and/or those of CCE’s members or of its community benefits)
Put simply, it is when two different interests overlap.
A conflict of interest in itself is not wrong provided that the conflict is identified, notified to the relevant parties and managed.
CCE or personal conflict?
Each Representative has responsibility to identify potential conflicts of interest.
These can be:
- personal conflict – where the personal interests of a Representative, or that of a close family relationship, create a conflict;
- CCE’s conflict – where CCE may be conflicted as a result of activities it is doing or has previously undertaken.
Remember, identifying conflict is an ongoing obligation.
Representatives of CCE have an ongoing obligation to declare potential and actual conflicts of interests. This means that they need to continuously self-check and declare any interest they (or a related party) have in any party with whom CCE may do business, compete with for business or who may benefit from our work. Each meeting of directors should begin with an agenda item about conflicts of interest.
Considering personal relationships requires careful judgement. It will depend on the closeness of the relationship and the degree to which the Representative’s or CCEs action could affect them. Conflict could arise in the following circumstances:
- a Representative or a close family member have an interest or influence in a business that has (or could have) a commercial relationship with CCE or would otherwise benefit from our work. This includes material ownership in a business, or a director or officer or an employee in a position of influence in a business, that is a landlord or a supplier to CCE; or
- a close family member is an elected official, or is a government official in a position of influence relevant to CCE’s work.
Identify Manage Declare
Once you have identified a conflict or possible conflict then you need to put in place strategies to manage the conflict and to declare the conflict. Personal conflicts should be discussed with the directors, or if you are a director with the other directors, and together you can resolve how to remove you from the conflict or implement a procedure so that there is no risk of the conflict causing harm.
When CCE is conflicted or may be conflicted you should consider appropriate project controls and disclosure.
Does CCE have some interest which means it will be difficult to work objectively on a project? A good test is the newspaper headline test – could someone make a story out of this no matter how fanciful it might be?