Conflict of Interest Pack | ACNC Governance Standard 5

A conflict of interest and related party transactions pack is a set of governance documents that lets a charity identify, record, and manage the personal interests of its responsible people before those interests taint a decision. In Australian charity practice the pack usually has three moving parts. The first is a declaration form, signed on appointment and refreshed annually, where each committee member or director sets out their outside directorships, business ownership, employment, family connections, and any dealings with the charity. The second is a standing register, maintained by the secretary or public officer, that captures every declared interest and every transaction with a connected party as it arises. The third is a meeting abstention procedure, a short protocol the chair applies so that a conflicted person discloses, leaves the discussion where required, and does not vote.

People often confuse a conflict of interest with a related party transaction, and the distinction matters. A conflict of interest is a state: your duty to the charity sits in tension with a private interest. A related party transaction is an event: the charity gives or receives resources, services, or obligations to or from someone connected to it, whether or not money changes hands. A transaction can be reportable even when there is no payment at all, which is why a register that only tracks invoices misses half the picture. The pack is built to catch both the state and the event, because the ACNC and your funders scrutinise them separately. If your charity is also drafting its founding documents, the pack sits naturally alongside an incorporated association constitution aligned with the state Associations Incorporation Acts.

The controlling instrument is Governance Standard 5, one of the six standards in the Australian Charities and Not-for-profits Commission Regulations 2013 made under the Australian Charities and Not-for-profits Commission Act 2012 (Cth). Standard 5 requires a charity to take reasonable steps to ensure its responsible people are subject to, and comply with, a set of legal duties: to act with reasonable care and diligence, to act honestly and fairly in the best interests of the charity and its charitable purposes, not to misuse their position or information, to disclose perceived or actual conflicts, to ensure the charity's finances are managed responsibly, and not to allow the charity to trade while insolvent. The ACNC's own guidance is explicit that a conflicted responsible person should disclose the conflict and should not discuss or vote on the matter, and where every responsible person is conflicted, the disclosure moves up to the members. Your pack operationalises exactly that expectation, which is why the ACNC lists a documented conflicts process among the reasonable steps a charity is expected to take.

Sitting beside Standard 5 is the related party reporting obligation. Since the 2023 Annual Information Statement, every charity except a basic religious charity must report its related party transactions to the ACNC. The definition scales with size: for a small charity (annual revenue under $500,000), a related party is a person or organisation connected to the charity with significant influence over it; medium and large charities apply the Australian Accounting Standards definition in AASB 124. A "transaction" is defined broadly as a transfer of resources, services, or obligations, and captures fees paid to a related party, loans in either direction, salary paid to a related party's relative, transfers of charity property, discounted goods or services, and significant use of charity property. Records for this reporting must be kept from the start of the relevant reporting period, not reconstructed at year end. For company-limited-by-guarantee charities, the Corporations Act 2001 (Cth) duties around material personal interests run in parallel. The ACNC's official guidance on managing conflicts of interest for registered charities sets out the regulator's baseline expectation and is worth reading before you adapt the templates. Charities that also employ staff should read this alongside their Fair Work Act obligations for not-for-profit employers.

The most common trigger is an incoming funder. Grant-makers, philanthropic trusts, and government departments increasingly attach due diligence conditions that ask, in writing, whether the charity has a conflict of interest policy and a register, and whether the board has approved them. A committee that cannot produce the documents on the day the acquittal is due loses time it does not have, and sometimes loses the grant. The second trigger is a related party dealing that is about to happen: a director's company tendering for work, a committee member's spouse being paid for services, the charity leasing premises from a member. Each of these must be declared and recorded before the decision is taken, not explained afterwards.

A third scenario is the annual reporting cycle itself. Preparing the Annual Information Statement forces the question of whether any reportable related party transactions occurred, and a charity without a live register ends up combing through twelve months of bank statements and minutes to answer a question the pack would have answered automatically. Then there is the reactive case: a complaint, a resignation, or an ACNC review that puts the spotlight on how a past decision was made. Boards that abstained properly and minuted it have a clean audit trail; boards that did not are exposed. One edge case worth flagging is the wholly conflicted board, common in small family-founded charities, where every responsible person has the same interest. Standard 5 practice requires that disclosure be escalated to the members, and the abstention procedure in a well-drafted pack tells the chair exactly how to do that rather than leaving the meeting to improvise.

• The annual and one-off declaration form asks each responsible person to set out current and past employment, directorships, trusteeships, business ownership, and family or business relationships that touch the charity. It is drafted to be signed on appointment and refreshed every year, because interests change and a declaration from three years ago proves nothing about today.
• The register of interests and related party transactions is structured so the secretary can log a declared interest and a discrete transaction in the same instrument, with columns for the nature of the interest, the related party, the value or resource transferred, and how the conflict was managed. It is built to feed straight into the Annual Information Statement question rather than sit in a drawer.
• The meeting abstention procedure gives the chair a step-by-step protocol: the conflicted person declares, the declaration is minuted, the person withdraws from discussion where the constitution or Standard 5 requires it, and the vote proceeds without them. It includes model minute wording so the record shows a real decision, not a bare "noted".
• The materiality and reporting guidance note helps medium and large charities apply the AASB 124 concept of a material transaction, and helps small charities apply the simplified significant-influence test, so the right transactions reach the register in the first place.
• The whole-board conflict escalation clause covers the situation where every responsible person shares an interest, routing the disclosure to the members in line with ACNC guidance so a common conflict does not quietly go unrecorded.

Although the ACNC regime is Commonwealth law and applies to registered charities in every state and territory, the underlying incorporation statute adds a second layer of duty that varies by jurisdiction, and your pack should be read against it.

New South Wales charities incorporated as associations sit under the Associations Incorporation Act 2009 (NSW), which imposes its own duty on committee members to disclose material personal interests and to refrain from voting on matters in which they are interested. The Act's disclosure mechanics are close to the ACNC expectation but not identical, so a NSW association should align its register and abstention wording to both. A charity revisiting its rules can pair the pack with an AGM minutes and special resolutions pack for Australian non-profits to capture approvals cleanly.

Victoria associations are governed by the Associations Incorporation Reform Act 2012 (Vic), which requires a committee member with a material personal interest in a matter to disclose the nature and extent of that interest and generally to abstain from the relevant vote. The model rules made under that Act contain default conflict provisions, and a Victorian charity should check whether its constitution has displaced or supplemented them before relying on the template.

Queensland associations fall under the Associations Incorporation Act 1981 (Qld), which likewise obliges management committee members to disclose interests. Queensland's regime places particular emphasis on the accuracy of the association's records, so the standing register is doing double duty: satisfying both the state record-keeping expectation and the ACNC reporting line. Charities operating across borders should treat the strictest applicable rule as the floor, and where staff are involved, review the pack next to a volunteer agreement and handbook drafted to the Fair Work Act so paid and unpaid roles stay clearly separated.

You start by identifying your charity's structure and ACNC size band, because that decision sets which related party definition applies and how much detail the register needs to carry. From there, the declaration form is circulated to every responsible person, who completes it on appointment and re-signs it at the first meeting of each financial year. The secretary then transfers every declared interest into the standing register, and thereafter logs each related party transaction as it occurs rather than in a year-end scramble. When a conflicted matter reaches a meeting, the chair runs the abstention procedure, the declaration and the outcome are minuted using the model wording, and the register is updated the same day. At reporting time, the register becomes the source document for the related party question in the Annual Information Statement, so the answer is already assembled. A charity building out its full governance suite can slot this into a broader ACNC governance pack drafted to the Charities Act 2013 rather than treating conflicts as an afterthought.

The recurring failure is treating disclosure as a one-off. A director declares an interest when they join, the form goes in a folder, and nobody refreshes it, so by the time a conflicted decision arrives the register is silent. The fix is the annual re-sign built into the pack. A close relative of this mistake is minuting a conflict as merely "noted", which tells an ACNC reviewer nothing about whether the person actually withdrew and abstained. The minute has to show the real sequence: declared, withdrew where required, did not vote, decision carried by the remaining members. Boards also routinely underestimate what counts as a transaction, assuming that because no invoice was raised there is nothing to report. Since the definition captures any transfer of resources, services, or obligations, a free loan, a discounted service, or significant use of the charity's premises by a related party all belong in the register.

The other frequent error is scope. Committee members disclose their own directorships but forget that the ACNC's related party concept reaches the interests of their relatives and the organisations those relatives control, so a spouse's company doing paid work for the charity slips through undeclared. And small charities often assume the reporting obligation does not apply to them, when in fact every charity except a basic religious charity has reported related party transactions since the 2023 Annual Information Statement. When conflicts touch commercial dealings, it is worth reviewing the arrangement against a proper independent contractor agreement compliant with the Fair Work Act so the terms are documented at arm's length.