By its very nature, any charitable trust is a legal body created to serve the public. A public trust does not belong to any particular individual or the group of office bearers (trustees). Being a public trust, all assets and funds are meant for the benefit of the beneficiaries of the trust. Trustees are mere custodians or administrators of the assets and funds, and not the owners. Hence, they are expected to demonstrate the highest form of accountability and commitment to perform their duties with personal integrity. This implies an inherent obligation to conduct all affairs of the trust transparently and above reproach. This is the only way to gain public trust and confidence. Therefore, trustees are to exercise their office with utmost sincerity and care, xo that their only concern is the interest and well-being of the trust and not their personal benefit. The interest and well-being of the trust must be the top priority and all purchases and sales of goods and services must be for the benefit of the trust and its beneficiaries, and not for one’s own benefit.
What is Conflict of Interest?
In the context of the trust, “conflict of interest(s)” is a situation in which a trustee, who has the responsibility for promoting the interest and wellbeing of the trust, is faced with another competing interest (self-interest) benefitting oneself at the same time. The former is called a fiduciary interest and the latter a competing interest. A situation when a trustee is faced with the fiduciary interest as well as the competing interest leads to conflict of interest. A conflict of interest arises when we are required, in our official capacity, to decide on something in which we have a private interest. It could be a situation in which we are in a position to derive personal benefit from actions or decisions made in our official capacity as a trustee or head of an organization. For example, we are on the decision-making board and one of our family members or friends is an applicant for a job there, or one of them is bidding for a big contract. It can also be a situation where we want to buy a property from or sell the trust property to our relative. It can also be a situation when we want to buy supplies from our relative’s shop or company. Thus, we can see that conflict comes when decisions must be taken on issues in which the decision-giver and the decision-seeker are overtly or covertly related or associated. A conflict of interest is not, in and of itself, either unethical or illegal, for we find ourselves in a conflict of interest, not for any action of our own. What matters here is how we handle the situation. Hence, being faced with a conflict situation in itself means nothing. There’s nothing wrong with being in a conflict of interest. What is important and crucial is how we deal with it. It all depends on what choice or decision we make. It’s best to avoid conflicts when we can, disclose them when they occur, and keep ourselves off from the relevant decision if possible.
Fr Alex G. SJ
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