Purpose

1. Members of Sparrows' Board have a duty to represent Sparrows' interests in an unbiased, responsible manner. This policy helps the Board effectively identify, disclose and manage any actual, potential or perceived conflict of interest, to protect Sparrows' integrity and manage risk.
2. Conflicts of interest commonly arise, and need not present a problem for Sparrows if they are openly and effectively managed. It is Sparrows' policy, and the Board's responsibility, that ethical, legal, financial or other conflicts of interest be avoided where possible, and that any which do arise are managed so they do not compromise Sparrows' interests.
3. Sparrows' Board aims to ensure that Board members are aware of their obligation to disclose any conflict of interest they may have, and comply with this policy to manage those conflicts effectively as Sparrows' representatives.
4. This conflict-of-interest duty is not a general good-governance aspiration — it gives effect to a specific legal bar. Regulation 84(1)(e) of the Children's Act General Regulations provides that no person with a conflict, or a potential conflict, of interest may be appointed to Sparrows' Board in the first place; this policy is the standing process for a conflict that arises during a member's term, which Regulation 84(1)(e) equally requires Sparrows to have. Board members are also bound by the ordinary fiduciary duty of good faith, proper purpose and care that attaches to any non-profit governing-body member under the Nonprofit Organisations Act and common law, and by the Companies Act's director-eligibility and disqualification standard.

Scope

1. This policy applies to members of the Board, the Executive Director, every other employee of Sparrows, and any volunteer, contractor or representative acting on Sparrows' behalf. The disclosure duty at §6 applies to everyone in scope; how a disclosure is raised and managed differs by who is disclosing (§6, §8), because a Board member's conflict is decided by the rest of the Board while a staff member's, volunteer's or contractor's is handled through the Executive Director in the first instance.
2. A conflict of interest involving a member of staff in a procurement decision is addressed by the Procurement Policy's own code of conduct, not duplicated here.

Definition of a Conflict of Interest

1. A conflict of interest occurs when a person's personal interests conflict with their responsibility to act in Sparrows' best interests. Personal interests include direct interests, and those of family, friends, or another organisation the person is involved with or has an interest in (for example, as a shareholder). It also includes a conflict between a Board member's duty to Sparrows and another duty they owe elsewhere.

Responsibilities

1. Sparrows manages conflicts of interest by requiring Board members to:
   1. Avoid conflicts of interest where possible;
   2. Identify and disclose any conflict of interest;
   3. Carefully manage any conflict of interest; and
   4. Follow this policy, and respond to any breach of it.
2. The Board is responsible for:
   1. Maintaining a system for identifying, disclosing and managing conflicts of interest across Sparrows;
   2. Monitoring compliance with this policy; and
   3. Reviewing this policy annually, to ensure it is operating effectively.

Gifts and Hospitality

1. A gift or hospitality offered to a Board member, the Executive Director, an employee, or a volunteer or contractor acting on Sparrows' behalf, because of their connection with Sparrows, is a conflict of interest in the sense this policy addresses, whether or not it is ever intended to influence a decision.
2. A gift or an instance of hospitality with a value of R500 or more — or a lower-value gift or instance of hospitality repeated from the same source often enough that its cumulative value reaches that figure within a year — is declared in the register of interests (§6) in the same way as any other conflict of interest, stating what was offered, by whom, and whether it was accepted.
3. A gift or hospitality below that threshold need not be declared individually, but is never accepted where accepting it is, or could reasonably appear to be, made conditional on a specific decision Sparrows is being asked to make.
4. Cash, or anything readily convertible to cash, is never accepted as a gift, regardless of value.

Identification and Disclosure

1. Once an actual, potential or perceived conflict of interest is identified, it must be entered in Sparrows' register of interests, and raised with the Board. Where every other Board member shares the same conflict, the Board should seek external advice on how disclosure and decision-making can properly proceed.
2. The register of interests is maintained by the Executive Director, and records the name of the person declaring, the nature and extent of each conflict of interest, and any steps taken to address it.
3. Where the person disclosing is a staff member, volunteer or contractor rather than a Board member, the conflict is reported to the Executive Director in the first instance — consistent with the Human Resource Policy's own conflict-of-interest clause — who enters it in the register of interests (§6.2) and decides how it should be managed under §8.4, or refers it to the Board where it cannot be resolved at that level.
4. In addition to the immediate disclosure duty at §6.1, everyone in scope of this policy — a Board member, an employee, or a volunteer or contractor acting on Sparrows' behalf — completes a Conflict of Interest Declaration Form when they start their service with Sparrows, declaring any conflict of interest that exists at that time, and updates that declaration at least annually thereafter. This proactive declaration does not replace the immediate duty at §6.1 — a conflict arising between annual declarations is still disclosed as soon as it arises, not held over for the next declaration.
5. A completed Declaration Form is entered in the register of interests (§6.2) in the same way as a conflict identified any other way.

Confidentiality of Disclosures

1. The Executive Director and the Board have access to disclosed information, and treat it confidentially. Board members sign a confidentiality agreement to this effect at the start of each term.

Managing a Conflict of Interest

1. Once a Board member's conflict of interest is properly disclosed, the rest of the Board deals with it. Neither that member nor any other conflicted member takes part in that decision. The Board decides which of the following the conflicted member must not do:
   1. Vote on the matter (this is the minimum restriction);
   2. Participate in the debate; or
   3. Be present in the room during the debate and the vote.
2. In exceptional circumstances — where a conflict is especially significant, or is likely to prevent a Board member from regularly participating in Board business — it may be appropriate for the Board to consider whether that member should resign.
3. In deciding what to do, the Board considers:
   1. Whether the conflict needs to be avoided outright, or can simply be documented and managed;
   2. Whether the conflict will realistically impair the disclosing member's ability to participate impartially in the decision;
   3. Any alternative way to avoid the conflict;
   4. Sparrows' objects and resources; and
   5. Whether the situation risks creating an appearance of impropriety that could damage confidence in, or the reputation of, Sparrows.
4. Where the conflicted person is a staff member, volunteer or contractor rather than a Board member, the Executive Director decides — applying the same considerations at §8.3 — whether they may participate in the matter giving rise to the conflict, and refers it to the Board instead where the Executive Director's own impartiality is in question, or the matter is serious enough to warrant the Board deciding it directly.

Compliance

1. Where the Board has reason to believe a person subject to this policy has failed to comply with it, the Board investigates the circumstances.
2. Where a Board member is found to have failed to disclose a conflict of interest, the Board may take action against them, up to and including seeking to end their membership under Constitution Clause 8.1.5 — which requires a right to be heard and a unanimous Board decision — since a Board seat depends on remaining a member of Sparrows.
3. A person who suspects a Board member has failed to disclose a conflict of interest raises it with the Executive Director, who assesses the merit, the evidence available, and the probability of the concern, before deciding whether to raise it with the Board.
4. Where a staff member, volunteer or contractor is found to have failed to disclose a conflict of interest, the Executive Director addresses it under the Human Resource Policy's own disciplinary framework, or under the terms of the volunteer's or contractor's own agreement with Sparrows, as applicable — referred to the Board instead where the person concerned is the Executive Director.