The fiduciary obligations imposed on Board Members encompass a duty to avoid situations where, without the prior consent of the Board, a material personal interest of a Board Member conflicts or may conflict with their duty to the School. Conflicts of interest are prohibited per se and any considerations of fairness are irrelevant. The only means by which a conflict of interest will be permissible is with the prior informed consent of the Board.
The declaration of conflicts of interest should be a standing preliminary item on the agenda for school Board meetings so that Board Members may declare any actual or potential conflict of interest before further items on the agenda are discussed.
Board Members must:
declare any conflicts of interest;
not use their membership of the Board for direct or indirect personal gain without informed consent by the Board; and
not use their membership of the Board to gain an advantage for themselves or someone else.If a Board Member has a material personal interest in a matter that relates to the affairs of the School he or she must:
disclose the interest to the other Board Members as soon as practicable after becoming aware of the interest in the matter, giving details as to the nature and extent of the interest and the relation of that interest to the affairs of the School
ensure that details of the disclosure are recorded in the Minutes of the Board meeting
be absent from the Board meeting while the matter is being considered and refrain from voting (unless a Board resolution is passed to the contrary).
A Board Member may give standing notice of the nature and extent of a possible conflicting interest. Standing notice means that the Board Member will not be obliged to bring his or her interest to the attention of the Board every time a potentially conflicting matter arises. A standing notice will expire if a new Board Member is appointed and is not given the notice.
Common examples of material personal interests in a matter that relates to the affairs of the School include:
where the School employs a company/service provider of which a Board Member is involved or has a pecuniary interest or a family connection;
where the School is voting on a policy relating to a matter in which a Board Member has a material personal interest; and
where a decision reached by the Board will result, directly or indirectly, in a financial or other specific benefit for a particular Board Member.Board Members should always err on the side of caution if unsure as to whether they have a material personal interest in a matter that relates to the affairs of the School. By disclosing the nature and extent of the Board Member’s interest, the Board Member can obtain the Board’s informed consent and avoid any potential conflict of interest issues.
Questions and Answers
“I am a Member of the School Board in a provincial city and the School wants to hire my construction company to carry out renovations in the main building. Are there any conflict of interest issues that arise?’
It is imperative that in this situation you disclose all relevant information relating to your interest and any potential financial or other benefits that you will receive if your construction company carries out the job. The Board, without you present, should then discuss the conflict of interests and resolve as to whether or not to allow your company to carry out the renovations. Relevant factors might include stakeholders’ perceptions and whether an open tender for the business is to be/was called.
In risky ventures where there is a real potential for dispute, it is preferable to deal with an arms length supplier as the potential for ill will can have a major impact on the school community.