Conflict of interest and the board

Directors of health services board need to be aware of possible conflicts of interest, and boards need a practical procedure for resolving situations where a conflict of interest arises.

Definition of a conflict of interest

A conflict of interest involves a conflict between a person's public duty as a director on the board of a health service and their private interests, which could improperly influence the performance of their duties and responsibilities as a director.

Conflict of interest is primarily a principle of conduct and transparency that a director:

• acts with honesty and integrity
• exercises his or her responsibilities impartially in the interest of the health service
• does not seek to improperly confer an advantage or disadvantage on any person.

Health service board directors’ responsibility

Directors on the board of a public healthcare service are public officials under s. 4 of the Public Administration Act 2004.

It is the director's responsibility to identify and disclose any conflicts of interest. Concerns about the result of a board decision should not influence a director's decision about whether to disclose a conflict of interest. A director's personal responsibility to disclose a conflict of interest overrides any other obligation they have as a decision-maker on the board.

Board responsibility for dealing with conflict of interests

S. 81(1)(f) of the Public Administration Act 2004 states the board of a public entity (health service) must implement a process to deal with conflicts of interest for financial and non-financial interests.

The Victorian Public Sector Commission has published Managing conflicts of interest to help boards develop their conflict of interest policies.