Question

I am looking for information on worker directors - Are there guidelines for dealing with worker directors and conflicts of interest when tendering for work etc.? Many thanks

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elizabeth2013's picture

If you have a CHY number, you

If you have a CHY number, you are not normally allowed to have paid staff on the governing body, although staff may report at meetings of the governing body if appropriate. It is generally not considered good practice to have a member of staff sitting on a governing body, unless in the capacity as a staff representative.  In some cases, the Revenue Commissioners have allowed organisations to have a staff member as a director, and if you wish to have a staff director you must make a case for this (before you take any action) to the Revenue Commissioners. Where this has been allowed, the Revenue Commissioners have required the following clause to be put in the governing document after the standard clause dealing with payments of expenses to directors:

"Provided however that nothing contained herein shall prevent the payment to one staff representative on the Board for executive services to the company provided that his/ her salary is commensurate with comparable positions in other similar organisations and provided that s/he is not present at the meetings of the Board when his/her salary is discussed and voted upon."

Another grey area is that of external representatives on the governing body, for example, from other community or voluntary organisations, from the private sector, or from statutory agencies such as local authorities, government departments, and so on. There is great potential for conflicts of interest in these situations. It should be made clear from the outset whether they are attending meetings as observers or if they are there as governors of your organisation, with all the rights and responsibilities that go hand in hand with that. The members of the governing body should always act in the best interests of the organisation not in the best interests of any other organisations. If individual members of the governing body have a conflict of interest they should declare it and abstain from the discussion and any vote. If a person is attending as an observer they should maintain their independence and do what is best for the organisation (although the governing body might ask for that person's views on a particular matter.)

As detailed above, this area of conflict of interest is an accepted grey area, hence a registered charity must get permission from the revenue commissioners if an organisation wishes to have a worker director.  However, the new charities act has specified that trustees can be paid for work done for their organisations once it is open and transparent.  

Click here for  more information on the Charities Act