Conflicts of interest

Most council members of tertiary education institutions (TEIs) have personal and professional interests and roles that, from time to time, may overlap with the interests of the TEI. Situations of overlapping interests or roles may create a conflict of interest when an individual’s duties or responsibilities to the TEI could be affected by some other interest or duty – whether in a personal capacity or as a member of another organisation.

On this page you can find out more about:


What is a conflict of interest?

A conflict of interest will arise if you have an interest that conflicts (or might conflict, or might be perceived to conflict) with an interest of the council.

In essence, you should ask yourself:

  • Does my other interest create an incentive for me to act in a way that may not be in the best interests of the TEI?

If the answer is “yes”, a conflict of interest exists or may be perceived to exist, irrespective of whether you would actually act on that incentive.


Types of conflict of interest

Conflicts of interest can arise in a number of forms. For example, a conflict of interest may be financial or non-financial, direct or indirect, or professional or family-related.

Conflicts of interest can also arise from:

  • directorships or employment with another organisation
  • interests or involvement in other business enterprises or professional practices
  • professional or legal obligations

  • holding another office

  • membership of professional associations or relationships with other organisations’ investments, and shares or property ownership

  • beneficial interests in trusts

  • gifts and hospitality

  • existing professional or personal associations with the TEI concerned or with other tertiary education providers

  • family or close personal associations with other groups or organisations

  • strong political or personal beliefs.

In general terms, a council member may have a financial or pecuniary interest that creates a conflict:

  • directly, because the council member is a party to a contract with the TEI
  • indirectly, if the contract with the TEI is with a third party, but the council member has a personal connection with that third party or could benefit financially from the contract. 

A non-financial interest can arise when a council member:

  • has a close relationship with an individual or organisation involved with the matter under consideration
  • acts in a way that indicates predetermination of a matter before hearing all the relevant information. 

Non-financial interests may be more difficult to identify than pecuniary interests, especially where a council member has an established position on a policy issue. Usually, council members are free to express their views, but sometimes a degree of sensitivity may be required if the council is considering issues that have the potential to affect the interests of third parties.


Examples of conflicts of interest

Two hypothetical examples of conflicts of interest are discussed below. Note that other types of conflicts of interest may also arise. You should seek legal advice if you are unsure whether an interest raises a conflict.

  • A council member holds shares in a private training establishment (PTE) that is in direct competition with the TEI for certain funding. The council member has a direct financial interest in the competing PTE. Poor performance on the part of the TEI may translate into greater profits for the competing PTE and its investors (including the council member). The council member has an incentive to put his or her own financial interest ahead of the interests of the council.
  • A council member is the spouse of the TEI's Chief Financial Officer. The council must be able to critically appraise the performance of the institution, which includes the performance of the Chief Executive and other employees of the TEI. A close family relationship between a council member and a senior manager is very likely to inhibit or prevent that critical appraisal. 


Managing conflicts of interest

While the primary responsibility for conflicts of interest rests with each member, the council must also ensure it has robust processes to help members to identify conflicts and declare their interests, and to ensure that interests are recorded and conflicts appropriately managed.

Legislative requirements 

The Education Act 1989 imposes obligations on council members in relation to specific interests.

If you have an interest in a matter that is being or about to be considered by the council, you must, as soon as possible after the relevant facts have come to your knowledge, disclose the nature of the interest at a meeting of the council or of a committee of the council (section 175).

This obligation arises if either:

  • the matter relates to your conditions of service as the Chief Executive or as a member of the staff of the institution concerned, or
  • you have any other direct or indirect pecuniary interest in the matter.

The interest must be recorded in the minutes of the meeting of the council or committee. Further, if you have an interest under this section of the Act, you must not, unless the council decides otherwise:

  • be present during any deliberation of the council or committee with respect to that matter, or
  • take part in any decision of the council or committee with respect to that matter. 

Good practice

In addition to meeting the requirements of the Education Act, it is important that you help the council manage any conflicts of interest, perceived or real. Therefore, you should:

  • discuss potential conflicts with the council Chair or the university Chancellor
  • comply with the council’s conflict of interest policy (if the council has one)
  • include relevant information in the council's interest register and update that information as soon as practicable after any changes to the interests that you or your partner may have. For example, details on the register should include your name, the name of your partner (if applicable), a description of any businesses that you and your partner engage in (if applicable), and any business or personal involvement you have with the TEI or other TEIs and
  • raise potential conflicts of interest related to specific agenda items at the start of council meetings.

The general rule is: if in doubt, disclose the interest. Even if you are not sure whether the interest is relevant or significant, disclose it. The other council members can then decide if there is a relevant or significant interest.

If a manageable conflict of interest arises, you may use one or more of the following mechanisms to avoid or minimise any risk to the decision.

  • Divest yourself of the interest that is creating the conflict (for example, by selling shares).
  • Agree that, in addition to declaring the interest, you will not participate in any vote on related issues; the abstention should be noted on each occasion in the minutes.
  • Agree that, in addition to declaring the interest and abstaining from voting when related issues arise for discussion and/or decision at council meetings, you will withdraw from the meeting for the duration of the item; the withdrawal should be noted on each occasion in the minutes.
  • Agree that, in addition to declaring an interest and withdrawing from the discussion and the vote, you should not be given any information (for example, council papers, written or oral briefings) relating to the interest by the council.
  • Agree not to participate in any other council action concerning the interest (for example, not signing documents that relate to the interest on behalf of the council).
  • Agree to leave an employment position or an organisation that gives rise to the conflict.

Examples of appropriate actions and mechanisms

The factual examples below illustrate the appropriate mechanisms for avoiding or managing conflicts of interest in a range of different circumstances.

  • A council member holds shares in a private training establishment that is in direct competition with the TEI for certain funding. The appropriate action will depend on the value of the shares held and, possibly, on the member's own circumstances (for example, the relative importance of the shares to the member's financial situation). If the value of the shares is very low and there is no risk of a negative public perception, the conflict may be immaterial. If the value of the shares is more significant, it will probably be necessary to sell them or place them in a blind trust. Declarations of interest are not suitable because the conflict of interest concerns the performance and success of the council as a whole, rather than one specific area of its operation.
  • A council member is the spouse of the TEI’s Chief Financial Officer. Because of the closeness of the family relationship, combined with the ongoing and pervasive nature of the conflict, the appointee is probably unsuitable for appointment or, if the situation arises mid-term, should resign.
  • A council member was in the past employed by a lobby group in the education sector although the association has now ceased. Whether the perception of a conflict is manageable or not will depend on a number of factors: the political sensitivity of the appointment, the passage of time between the council member's involvement with the lobby group and the date of the appointment, the public profile of the council member and/or the body, and the likelihood of the council member resuming contact with the lobby group after the expiration of their term on the council. Even though the conflict of interest may be more perceived than real, the appointment may not be tenable if it would seriously compromise the integrity and standing of the council in public opinion.


  • Last changed: 15 September 2015
  • Last verified: 15 September 2015