Of all aspects of integrity in the Australian charity sector, “conflicts of interest” might be the most common, but least understood.
For the Australian Charities and Not-for-profits Commission (ACNC), a conflict of interest occurs when a person’s personal interests conflict with their responsibility to act in the best interest of the charity. This can arise in any business relationship but perhaps the highest risk areas are procurement, partnerships and recruitment.
Unmanaged conflicts can corrode reputation, morale and ultimately the mission of the charity. Undeclared conflicts can even be a form of corruption, and in some circumstances, part of fraudulent behaviour.
And yet, particularly in small industries, pre-existing relationships are very common. It is not necessarily a problem to engage a person or company one has worked with before – the key is doing so transparently, so that risks can be managed and trust preserved.
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