Conflict of Interest Policy

What is a Conflict of Interest Policy?

A conflict of interest policy is a document used by an employer to describe the situations in which its employees may be faced with a conflict of interest. Usually, these documents also describe how employees can report a potential conflict of interest. Conflict of interest involves situations where the employee may be motivated by something other than his or her work for the employer, such as a financial gain.

What is the difference between a Conflict of Interest Policy and a Not-for-Profit Conflict of Interest Policy?

A conflict of interest policy is a document that applies to an employer's organization that operates with a view to profit. On the other hand, a not-for-profit conflict of interest policy applies to the unique needs of non-profit organizations. These unique needs include a vision that aligns with the non-profit's objectives without financial gain. Both documents seek to ensure that personal interests do not conflict with the interests of the organization, which generally applies to executive members such as the board of directors or senior officers.

What should a Conflict of Interest Policy contain?

A conflict of interest policy should contain information on the organization, the definition of a conflict and how such may arise, disclosure and reporting requirements of potential conflicts, the management of conflicts, and how non-compliance will be addressed.

What has to be done after a Conflict of Interest Policy is ready?

Once the conflict of interest policy is ready, employees should sign, either electronically or physically, the acknowledgement at the end of the document confirming they read and understand the Conflict of Interest Policy. The employer should then add a copy of the signed Policy to each employee's file.

The employer will then need to continue monitoring situations that give rise to conflicts and appropriately address them.

Which laws are applicable to a Conflict of Interest Policy?

Conflict of Interest Policies are subject to corporate law, which requires that the board of directors or officers disclose, in writing, that a conflict may exist and the extent to which the director or officer may be in conflict. The following pieces of legislation apply to incorporated organizations:

• Ontario: Business Corporations Act, R.S.O. 1990, c. B.16
• Manitoba: The Corporations Act, CCSM c C225
• Alberta: Business Corporations Act, RSA 2000, c B-9
• Saskatchewan: The Business Corporations Act, RSS 1978, c B-10
• British Columbia: Business Corporations Act, SBC 2002, c 57
• New Brunswick: Business Corporations Act, SNB 1981, c B-9.1
• Nova Scotia: Companies Act, RSNS 1989, c 81
• Prince Edward Island: Business Corporations Act, RSPEI 1988, c B-6.01
• Quebec: Business Corporations Act, CQLR c S-31.1
• Yukon: Business Corporations Act, RSY 2002, c 20
• Northwest Territories: Business Corporations Act, SNWT 1996, c 19
• Nunavut: Business Corporations Act, SNWT (Nu) 1996, c 19
• Newfoundland and Labrador: Corporations Act, RSNL 1990, c C-36
• Canada: Canada Business Corporations Act (R.S.C., 1985, c. C-44)

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