Definitions
“Conflict of Interest”, under the Conflict of Interest Act and within this Code, means when a Director exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further any other person’s private interests.
“Real” means that the Conflict of Interest exists at the present time.
“Apparent” means that the Conflict of Interest is perceived by a reasonable observer to exist, whether or not it is the case.
“Potential” means that the Conflict of Interest can be reasonably foreseen to exist in the future.
Standard of Conduct
Directors shall avoid and disclose any Real, Apparent or Potential Conflict of Interest. [COIA s. 4-5 and FAA, s. 116]
COIA Requirements
As Public Office Holders, Directors shall also comply with the Conflict of Interest requirements of the Conflict of Interest Act. These requirements are summarized at Schedule 1 (Conflict of Interest Act – Summary of Rules).
Timing and Manner of Disclosure
Disclosures must be made:
- at the earliest opportunity
- in writing, to the extent practicable, and
- to the Board Chairperson, or
- when the Board Chairperson is making the disclosure, to the Chairperson of the Audit Committee.
Where it is not practicable to make a disclosure as indicated above, disclosures may be made at Committee or Board meetings to either the Committee Chairperson or the Board Chairperson.
Avoiding Conflicts of Interest
The following table outlines a list of actions that may be taken to remedy or avoid a Conflict of Interest should one arise under this Code and/or the Conflict of Interest Act. This is not an exhaustive list and not every action will be sufficient to respond to a Conflict of Interest.
| Action | Description |
|---|---|
| Recusal | Recusal means that a Director does not participate in deliberations or debates, make recommendations, give advice, consider findings, or in any other way assume responsibility for or participate in the work or decision making relating to the matter where there is a Conflict of Interest (s.21 COIA/ s.116(5) FAA). |
| Resignation of office or activity | Where a Conflict of Interest exists concerning a Director’s appointment, office, position or activity with another organization, the Conflict of Interest may be removed if the Director resigns from the other office or activity or from the Board. |
| Divestiture | Where a Director owns, or has a substantial interest in real or personal assets and ownership of those assets presents a Conflict of Interest, the Conflict of Interest may be removed by divesting the assets, or selling them to a third party. Divestiture is most appropriate before holding a position or becoming involved with a business activity where a Conflict of Interest may be created. Divestiture as a remedy will be inappropriate if, for example, a gain, profit, reward, change in value or benefit has already been realized and, in such instances, other remedies such as a blind trust need to be considered. |
| Blind Trust | Where a Director has significant assets that are likely to place him or her in a Conflict of Interest, the Director may consider entrusting those assets to an independent trustee for management. A blind trust created for this purpose must comply with the requirements for blind trusts under s. 27 of the COIA. |
| Conflict of Interest Screen | A conflict of interest screen is a preventative measure that will help Directors identify areas where it is likely that a conflict of interest will arise. Arrangements are then made to ensure that the Director is not involved in decision-making processes or discussions in respect of matters that could give rise to an identified conflict of interest. |
| Return | S. 11 of the COIA prohibits the acceptance by a public office holder and their family of any gift or other advantage that might reasonably be seen to have been given to influence the public office holder in the exercise of an official power, duty or function. The Information Notice for Public Office Holders – Gifts or Other Advantages published by the Office of the Conflict of Interest and Ethics Commissioner provides some guidance as to whether a gift is improper. An improper gift or advantage should either not be accepted or be returned to the person offering it as soon as practicable. If there is no opportunity to return an improper gift or benefit or where the return may be perceived as offensive for cultural or other reasons, the gift or benefit must immediately be disclosed and turned over to the Board Chairperson or the Corporate Secretary who will make a suitable disposition of the item. |