SECTION 1: PURPOSE OF THIS POLICY
1. As charity trustees, the Treasurer and Masters of the Bench (collectively “the Benchers”) of the Honourable Society of the Inner Temple (“the Inn”) have a legal duty to act only in the best interests of the Inn, and must not put themselves in any position where their duties as trustees may conflict with any personal interest they may have. The purpose of this conflict of interest policy (“the Policy”) is to provide guidance on the definition of a conflict of interest; and to explain how the Benchers and others should deal with such a conflict. Although each Bencher has a personal responsibility to comply with this Policy, it shall be the responsibility of the Treasurer to monitor and enforce the Policy. This Policy also applies to members of Inn committees who are not Benchers, as well as to officers of the Inn when discharging responsibilities on behalf of the Inn.
2. This paragraph summarises the structure of the Inn and the conduct of its affairs, to serve as a brief context for the Policy. The Inn is an unincorporated charitable association. The full title of the governing body, which constitutes the "charity trustees" within the meaning of Charities Act 1993 s.97(1), is "The Treasurer and Masters of the Bench of the Honourable Society of the Inner Temple". The affairs of the Inn are conducted by or under the authority of the Masters of the Bench with the assistance of other members of the Inn as provided in Bench Table Orders. Subject to the directions of the Bench, the Executive Committee is responsible for determining the financial and other policies of the Inn. The legal title to the land and investments of the Inn is vested in four Governing Benchers known as the Trustees, under BTO 31. The legal title to the other assets of the Inn which do not require a written instrument for their disposition, such as the library books, silver and pictures, remains vested in the Bench as a whole, and they can be dealt with by a resolution of the Bench Table. The business of the Inn is transacted in Parliament (for certain important matters specified in BTO 14.1) or in Bench Table (BTO15) or in the appropriate committee or sub-committee. Most of the decisions relating to the investment and expenditure of the Inn’s general funds, the letting of chambers and the allocation of scholarships are made by the appropriate committee or sub-committee rather than by the Bench Table as a whole.
SECTION 2: PERSONS AFFECTED BY THIS POLICY
3. Although this Policy is primarily directed to the Benchers, it also affects other members of the Inn who are involved in the governance of the Inn, for example as committee members, and the Inn’s staff. The Benchers should ensure that the Policy is applied in such a way that conflicts of interest that may affect other members of the Inn and its staff are dealt with in accordance with the Policy. Accordingly, where appropriate, references below to “Bencher” should be understood as references to other members of the Inn who are involved in its governance and the Inn’s staff.
SECTION 3: DEFINITION OF A CONFLICT OF INTEREST
4. A conflict of interest is any situation in which a Bencher’s personal interests or loyalties might, viewed objectively, prevent them from making a decision only in the best interests of the Inn.
5. Examples of potential conflicts of interest are:
(a) where a Bencher or a person connected with the Bencher (for example a family member, friend or business acquaintance) has a significant financial or other interest in an organisation with which the Inn proposes to do business;
(b) where a Bencher or a person connected with the Bencher would receive a personal benefit as a result of a transaction into which the Inn proposes to enter;
(c) where a Bencher or a person connected with the Bencher has a conflict of duty or loyalty concerning the Inn.
6. It should be emphasised that these examples are illustrative, and not exhaustive. They should be applied sensibly and reasonably. By way of further example:
(a) If the Inn is proposing to change its telecoms supplier to BT, and one of the Benchers owns 25 shares in BT, that involvement would not be a conflict of interest, because the shareholding is so small that its value would not be affected by the transaction. Conversely, if the Bencher owned 100,000 shares, there might be a conflict.
(b) If the Bencher is a director of BT, the decision to change suppliers to BT would almost certainly involve a conflict of interest. This might also be the case if the Bencher had been a director of BT within (say) the previous 5 years.
SECTION 4: ACTION IN THE EVENT OF A POSSIBLE CONFLICT OF INTEREST
7. It shall be the continuing personal responsibility of the Benchers to scrutinise their transactions and outside business interests and relationships for potential conflicts, and to make any disclosures where their interests might lead to a conflict in any given situation concerning the Inn.
8. Disclosure in such a case must be made to the Treasurer or, if absent, the Reader or the chairman of the appropriate committee. The Treasurer or alternate shall make a ruling as to whether a conflict of interest exists, and if so whether that conflict should be dealt with by:
(a) the disclosing Bencher withdrawing from discussion and approval of the transaction; or
(b) the Benchers adopting another course of action to avoid the conflict arising.
9. It would be good practice for the agenda for any meeting to pose a preliminary question whether any Bencher envisages any conflict of interest arising as a result of any agenda item. This should not substitute for the duty of the Benchers to keep the Policy under scrutiny, but may serve to remind the Benchers of the Policy.
SECTION 5: RECORD KEEPING
10. The Charity Commission recommends that formal records should be kept by charity trustees of any conflicts of interest and how they were handled. Given the limited size and scope of the Inn, it is considered that a proportionate method of dealing with this will be for such matters to be recorded in the minutes of any meeting where a conflict is disclosed. If a conflict is disclosed other than during the course of a minuted meeting, it shall be referred to in the minutes of the next meeting.
SECTION 6: OTHER RELEVANT MATTERS
11. Given the particular circumstances, purposes and size of the Inn, it is not considered that the Benchers are likely to be placed in circumstances where other difficulties are likely to arise. Nevertheless, Benchers are asked to be familiar with the following additional rules, in accordance with Charity Commission guidance.
12. First, Benchers cannot receive a benefit from the Inn (aside from proper out of pocket expenses), whether directly or indirectly, unless they have an adequate legal authority to do so. A relevant example would be where a Bencher receives payment for work at the Inn’s trading company (if one is formed).
13. Secondly, it is recommended by the Charity Commission that trustees establish a register to record all their other interests openly, in order to provide for easier identification of any actual or potential conflicts of interest. This recommendation would be onerous in the circumstances of the Inn, and will not be followed.
14. This Policy is designed to be straightforward and easy to implement. It should be reviewed on a regular basis to assess whether it remains fit for purpose.