Directors’ Conflicts of Interest Factsheet

Conflicts of Interest

A conflict of interest arises where a director’s personal interests, relationships or competing duties could affect, or be perceived to affect, the performance of their duties to the club.

Conflicts of interest can take several forms, including:

Actual/material conflict of interest: Where a director has a personal interest or competing duty that could affect or be affected by the way the director performs their functions or duties.

Potential conflict of interest: Where a director has a personal interest or competing duty that could, in the future, affect the way the director performs their functions or duties.

 Perceived conflict of interest: Where a reasonable person might conclude that a director has a personal interest, relationship or competing duty that could affect the way the director performs their functions or duties, even if no actual conflict exists.

Legislative Requirements

Corporations Act 2001/ Co-operatives National Law 2012

Under the Corporations Act 2001, directors have a responsibility to disclosure any material personal interests that relate to the affairs of the company. The disclosure must be made as soon as the director becomes aware of the conflict and include sufficient detail about the nature and extent of the interest. Directors of public companies with a material personal interest are prohibited from participating in deliberations or voting on the matter unless they obtain specific company permission.

Under the Co-operatives National Law 2012, if a director holds another position, or has a personal, financial, business, employment, family or property interest that could potentially conflict with their duties as a director of the co-operative, they must disclose that conflict to the board. If a director has made a declaration under the law, they must, unless the board otherwise decides, not be present during the deliberation or vote on the decision.

Registered Clubs Regulation 2025

Clause 9 of the Accountability Code under the Registered Clubs Regulation 2025 requires clubs to maintain a register, in the form approved by the Secretary of the Department, containing details of disclosures of interests made by club directors, top executives and employees. The approved Register of Disclosures of Interest form is available here.

The register must include details of:

• Any material personal interest that the board member has in a matter relating to the affairs of the club
• Any personal or financial interest of the director in a contract relating to the procurement of goods or services or any major capital works of the club
• Any financial interest of the director in a hotel within 40 kilometres of the club’s premises
• Any gift valued at $1000 or more, or any remuneration of an amount of $1000 or more, received by the board member from an affiliated body of the club or from a person or body that has entered a contract with the club.

This disclosure must be made in writing and within 21 days of the individual becoming aware of the conflict.

The Registered Clubs Regulation 2025 also specifies restrictions on who a club can enter into a contract with, including that a club cannot enter into a contract with a director or a company in which a director has a pecuniary interest without board approval.

Managing Conflicts of Interest

A club should have a clear process in place to appropriately manage a conflict of interest.

Once a conflict of interest has been disclosed, the board (excluding the director who has made the disclosure) should determine an appropriate action and can consider the following:

• Whether the conflict needs to be avoided or documented
• Whether the conflict will realistically impair the disclosing person’s capacity to participate in decision-making impartially
• Alternative options to avoid the conflict
• The relevant legislative requirements under the Corporations Act 2001/ Co-operatives National Law 2012 and Registered Clubs Regulation 2025
• The possibility of creating an appearance of improper conduct that might impair confidence in, or the reputation of, the club
• In extreme circumstances, it may be appropriate for the board to consider if the director with the conflict of interest should resign from the board.