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In a recent ‘Ask the Expert’ question, Strata Operations Manager Matthew Savage provided some insights on conflicts of interest within a body corporate.
The question raised concerns about the need for committee members and owners to document conflicts of interest, ensuring transparency in financial decisions and contractor appointments.
Let’s explore the best practices surrounding conflicts of interest in a body corporate.
Read more on Clarifying conflict of Interest in an article by the Commissioner for Body Corporate and Community Management here.
Recording conflicts of interest in meeting minutes is not mandatory but is recommended as a best practice.
The only legal requirement is that a conflicted committee member abstain from a vote about the topic. The member does not need to explain the detail of the conflict.
Our advice however is that the committee should include a brief comment about the member’s conflict and their abstention from the discussion and vote. This does not change the outcome, but allows owners to be informed about the potential conflict in a transparent way.
The goal is to promote transparency and ensure that conflicts of interest are appropriately addressed within the body corporate.
Recognising when a decision calls for expert advice is part of making sound, well-informed decisions on behalf of the community.
When a conflict of interest occurs, the committee member is required to disclose the interest before any vote is taken. But disclosure is only the first step. Once a conflict has been declared, the committee must also manage it correctly.