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5.6 Selflessness, Integrity, Objectivity and Honesty

Board members must be (and must be seen to be) completely selfless and objective as well as adhering to the highest standards of personal integrity.

Specifically, Board members must:

• demonstrate selflessness by taking decisions solely in terms of the public interest. You must not act in order to gain financial or other material benefit for yourself, family or friends;
• demonstrate integrity by not placing yourself under any financial by not placing yourself under any financial or other obligation to any individual or organisation that might reasonably be thought to influence you in the performance of your duties;
• be objective - decisions should be taken solely on merit when carrying out public business; and
• act with honesty at all times. You must declare any private at all times. You must declare any private interests relating to your public duties and take steps to resolve any conflicts arising in a way that protects the public interest.

Conflict of Interest

The key principles of the Model Code, especially those in relation to integrity, honesty and openness, are given further practical effect by the requirement for you to declare certain interests in the proceedings of your public body. Together with the rules on registration of interests, this ensures transparency of your interests which might influence, or be thought to influence, your actions. You should note that the appearance of a conflict of interest in terms of public perception can be every bit as damaging as an actual conflict - both should be avoided.

Registration of Interests

All devolved public bodies have a duty to set up, maintain and make available for public inspection a register of Board member interests. The Code is very specific about the interests that you, as a Board member, must register and these include:

• Remuneration from employment, self employment or directorships;
• Related undertakings;
• Contracts with the public body;
• Houses, land and buildings that you own or have an interest in which are of significance or relevance to, or bear upon the work and operation of, the public body;
• Shares and securities - holdings in a company or organisation which are of significance or relevance to, or bear upon the work and operation of, the public body; and
• Non-financial interests including membership or holding office in other public bodies, clubs, societies and organisations such as Trade Unions and voluntary organisations.

Your Code of Conduct will contain definitions of what is required under each of these categories and if you are in any doubt as to what you should or should not be registering, you should discuss this with the Standards Officer, the Chair and/or the Standards Commission.

The Register should also be available for inspection by the public (electronic and paper version). Public bodies should prepare a page for this purpose on their website and ensure that it is operational. The electronic version of the Register does not need to include any personal information that would compromise personal security although the full details would be made available for public inspection in hard copy.

Board members are required to keep their entries in the Register of Interests up-to-date and this involves notifying the Standards Officer of any new interest or change to an existing interest within one month of the change.

Handling Conflicts of Interest

Public confidence in your public body and its Board members depends on it being clearly understood that decisions are taken in the public interest and not for any other reason. In deciding whether to declare an interest, the key test is whether "a member of the public, acting reasonably, might think that a particular interest could influence you" (Section 5.3 of the Model Code of Conduct for Board Members).

Interests may be financial or non-financial and they may or may not be interests that are registerable under the Code. For example, the Code requires only that your personal interests should be registered but it would clearly be appropriate to declare any relevant financial or non-financial interests of your spouse, relatives or close friends.

If you have a financial interest, you must declare your interest at Board meetings and withdraw thereby avoiding any participation in either the discussion or the voting process. If you have a non-financial interest, you must consider whether the conflict is material in the context of the issue under consideration and also, in terms of public perception, whether "a member of the public, acting reasonably, would consider that you might be influenced by the interest in your role as a member of a public body and that it would therefore be wrong to take part in any discussion or decision-making".

If your non-financial interest would be deemed to be prejudicial under this test, you should declare your interest and leave until the discussion and voting in relation to that item are completed. If you believe that your presence would not fall foul of this objective test, then you should declare your interest and participate in the discussion and voting. In circumstances where you are unsure as to whether or not a prejudicial conflict of interest exists, you should discuss the matter with the Standards Officer and/or the Chair prior to the meeting. If still in doubt, you should err on the side of caution, declare the interest and leave the room during consideration of and voting on the relevant item.

Some examples of potentially prejudicial conflicts of interest are:

• You are a director of a building supplies firm and the Board is entering into a procurement exercise for building materials;
• The Board is meeting to discuss the possible closure of a facility where a member of your family is employed; and
• You are a manager in a voluntary body that has submitted a grant
• application to the organisation and it is due to be considered by the Board.

The fundamental principle is that no-one should use, or give the appearance of using, their public position to further their private interests. This is an area of particular importance as it receives considerable media attention and even an innocent action can be misinterpreted. A declaration of interest must be made as early as possible and certainly well before the particular item on the agenda is discussed. Ideally, the declaration should be made at the beginning of the meeting and provide enough information to allow those present to understand the nature of your interest. You do not need to provide a detailed description of the interest.

In the event of a particularly contentious or difficult matter, there may be a need to hold a pre-meeting to discuss how a particular conflict of interest should be handled. If an issue is identified at a sufficiently early stage, advice may be sought from the Commission.

Dispensations

The Commission does have the power to issue a dispensation (where it is deemed to be in the public interest to do so) to allow Board members to participate in a discussion and vote, despite the fact that they have financial or non-financial interests which would normally prevent them from participating in discussion and voting. The Standards Commission has issued two general dispensations for Board members in the following areas:

• Planning decisions in the Cairngorms National Park Area to address a conflict between the founding legislation of the Cairngorms National Park Authority and the effect of the Ethical Standards Act; and
• Membership of outside bodies to assist joined-up working.

In addition to these general dispensations, individual applications for dispensations in exceptional circumstances can be made to the Standards Commission and may be granted where it is in the public interest to do so. However, Board members must not take part in any discussion or vote on a matter (in which they are conflicted) unless and until they have actually received a dispensation.

Where a prejudicial conflict of interest exists and a Board member does not declare their interest and withdraw, the Chair should take appropriate action to ensure that the Board (and the Board member concerned) is not compromised. In the event that a Board member refuses to leave the room when asked by the Chair to do so, the Chair should suspend the meeting and reconvene without the Board member concerned being present. Board members should bear in mind that any such action on their part may lead to an investigation by the Standards Commission and imposition of sanction in the event that a breach of the Code of Conduct is proven to have taken place.

In certain situations, handling a conflict of interest properly may require much more than simply leaving the room while the matter is being discussed and voted upon. In particular, Board members who have a prejudicial interest in respect of a grant, licence or a planning application or a tender should not:

• get involved in the setting of criteria for the assessment of the grant, tender etc.;
• get involved in the actual preparation of the grant, tender, licence application (or subsequent presentations, interviews etc.) if at all possible;
• receive any relevant papers relating to their application in advance of the meeting;
• be present for the discussion or voting or receive any minutes relating to that part of the meeting;
• use their position as a Board member to try and improperly influence a decision by lobbying any other Board member(s) or by contacting another Board member to represent your interests at the meeting.

It is extremely important that there should be a level playing field with no advantage (real or perceived) given to Board members or to individuals or organisations with Board connections or representation.

Gifts, Hospitality and Entertainment

As a Board member, you should ensure that the reputation of your public body is not damaged through the receipt (or provision) of inappropriate levels of gifts and hospitality. The Code of Conduct sets out four key principles in relation to the acceptance of gifts or hospitality:

• You (or anyone in your organisation) should not canvass or actively seek gifts or hospitality;
• You must not accept any offer of a gift or hospitality from any individual or organisation that (1) stands to gain from a decision that your public body may be involved in determining or (2) is seeking to do business with your organisation:
  • It therefore follows that there is a different standard applicable when a gift is offered from a company or individual with which you do business and a similar gift from a community group or an individual who does not stand to gain or benefit from a decision that your public body may be involved in determining;
  • It is also specifically stated in the Code, that if you or your colleagues are making a visit to inspect equipment, vehicles, land etc., your public body should meet the costs of these visits and not be subsidised by someone with a vested interest.
• You must not accept repeated hospitality from the same source. For example, in the case of an annual invitation to a golf tournament, it may be appropriate to go once for networking purposes (assuming that the offer meets the previous criterion) but not on a regular basis;
• You should usually refuse offers of gifts and/or hospitality except in the following cases:
  • Lunch, or other reasonable hospitality, taken by Board members after, during, or as a result of a business related meeting
  • Acceptance of gifts of a trivial nature or inexpensive seasonal gifts such as diaries or calendars or simple items of office equipment
  • Gifts that are received on behalf of the public body and not an individual. However, it is important that these gifts should not be excessive or give the impression of an inappropriately close relationship with a particular supplier.

There should be guidance available within your organisation in relation to the receipt of gifts and hospitality. This should provide you with information on, for example, the level of gifts and hospitality that are acceptable (eg a maximum threshold of £25 or similar amount), when approval is needed, registration requirements etc. As a Board member, you should ensure that there is practical up-to-date guidance in place in your organisation and you should familiarise yourself with the content of this guidance.

In circumstances where you are unsure whether or not to accept a gift or hospitality, even after consulting the organisation's guidelines, you should discuss the matter with the Standards Officer and/or Chair. It may also be useful to look at the organisation's Hospitality Register to get a feel for the types of gifts and hospitality that have been deemed acceptable in the past. But, ultimately, the best advice is - if in doubt, decline.

Where a gift or hospitality is accepted, and exceeds a specifi ed minimum level, it should be recorded in the Hospitality Register.

In situations where public bodies are providing hospitality, it is important to remember that your organisation is spending public money. As the guardian of the public body's reputation, the Board should ensure that the organisation does not have (or appear to have) a cavalier attitude to the use of public money and, in particular, that lavish or excessive expenditure is avoided at all times.

Relationships with Suppliers

Board members have a duty to maintain the reputation of the organization through fair, open and consistent dealing with suppliers. Anyone involved in the procurement process is expected to display high standards of competence and integrity.

Suppliers should be selected on the basis of quality, suitability and value for money. Board members and staff should take care to avoid becoming, or appearing to become, obliged to individual suppliers through the acceptance of hospitality, gifts, entertainment or sponsorship. When dealing with suppliers, it is essential to ensure that:

• all relevant legislation is complied with, e.g. public procurement legislation ( UK and EU);
• the body's own internal rules and procedures are followed; and
• any agreed payment terms are met.

Boards should be aware that all public bodies are encouraged to use collaborative procurement where it is suitable to do so and to use e-Procurement Scotland (which exploits technology to the benefi ts of both buyers and suppliers) as the common platform for public sector procurement.

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