- Foreword and Introduction
- 1. Introduction
- 2. The Audit Committee’s functions and responsibilities
- 3. Membership of the Audit Committee
- 4. Relationships with key stakeholders
- 5. Conduct of the Audit Committee
- 6. Assessment of the Audit Committee’s performance
- Part 2
- Part 3
PDF of Checklists And Proforma [0.5MB]
5.5. Managing conflicts of interest
To strengthen the Audit Committee’s actual and perceived independence, the committee should develop protocols for dealing with actual or perceived conflicts of interest.
These protocols could include the following arrangements:
- each year, members of the Audit Committee declare potential, perceived or real conflicts of interest they may have in relation to their role, and be required to update them regularly during the financial year. External members should consider past employment, consultancy arrangements and related party issues; and
- at the beginning of each Audit Committee meeting, members should raise any conflict of interest issues and, where required, the member should be excused from the meeting for the relevant agenda item(s).
Where members or observers at Audit Committee meetings are deemed to have a real or perceived conflict of interest it may be appropriate that they are excused from committee deliberations on the issue where a conflict of interest exists. Details of potential or actual conflicts of interest declared by members and action taken should be appropriately minuted.
These protocols should help reinforce the importance of committees identifying and managing, where necessary, actual and potential conflicts of interest.
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